Switching to remote jobs has many perks you’re probably already aware of, but aside from challenges of diving into new contract types, what salary you should ask for is often the toughest question to answer for many remote workers. Including software developers and engineers. Let’s dive in to solve this conundrum.
- How companies set salaries for remote jobs
- Due diligence
- Salary Calculator
- How to negotiate a salary
Before we begin, remember that companies employing remote workers will know the local pay rates in your region, but that they also know the value of an excellent experienced worker. And you should know it, too.
How companies set salaries for remote jobs
As with anything else, salaries for remote workers have by now developed into widely used models.
Local salary model
A local salary pays people based on a calculation of local cost of living and the local labour market competition.
Global salary model
A global salary that pays everyone the same fixed amount for the role and experience level, wherever they are.
And of course, the unique:
Transparent salary formula from Buffer
In a nutshell, they combine a two-part base salary with a cost-of-living multiplier, experience multiplier, and a seniority-level multiplier. The biggest change is that they do not factor in location-specific parameters anymore. Instead, they use a cost-of-living multiplier that is added to an employee’s base salary. The employee’s location determines whether they live in a high, average, or low cost-of-living area. For expensive areas, the multiplier is 1x, so Buffer pays 100% of the San Francisco rate at the 50th percentile. It then drops to an average, which is 85% of the San Francisco rate. And then a low rate of 75% of the original San Francisco salary.
Keep in mind that most companies would not be able or willing to do something like this (for now). Nevertheless, we are still in the dawn of the big remote shift and the market is yet to adjust.
Due diligence on your part
Research market rates for your area, the company’s area, and then combine the two to see what you could end up negotiating
Research your needs - Numbeo, for example, offers cost of living stats for virtually every country in the world, down to the city. Use it to estimate your needs and understand what salary would be able to cover them. Bonus points: You can compare different locations to one another, too! So if you’re thinking of moving at some point during your time with the company, you can anticipate what salary would be sufficient in your next location.
Remote work will also require at least a computer, headset, and decent internet connection, so make sure you can cover that or ask your employer if they offer stipends, reimbursement, or similar.
Remote jobs will often come with one novelty - the type of contract. Unless your employer has a legal entity in the country of your residence, you’ll most likely end up signing a B2B contract or going through a payroll/contract management company. In both cases, both employer and employee taxes and deductions will almost certainly fall on you. Discuss this in depth with the company so there are no surprises.
“What should I be paid” Calculator
Glassdoor has a salary calculator you can use to get a salary estimate based on the current job market. To go a step further, check if the company has a Glassdoor presence where people may have mentioned their salaries alongside their role and location to get a deeper understanding of how the company pays its employees. Often, the country of your residence and the country where the company is domiciled may also provide official statistics alongside calculators to estimate the market rates based on your role and experience.
How to negotiate the salary
If you already know exactly what you’re getting and you’re fine with it, great. No need to negotiate. But this implies you also know about the full package which goes beyond the cash - retirement options, health insurance, time off, sick leave, professional development, etc. On top of it, you should know how raises are considered and given in your new workplace.
The research and, ultimately, the negotiations come before, during, and after the offer. The former is something you should most definitely do before, using the tips listed above, and the negotiation, while it comes later on, should be something you also prepare for in advance.
After you’ve completed your research regarding the needs, as well as settled on your wants, it’s time to align those during the recruitment process. If you don’t know what the employer will be offering but asks you for your salary expectations, best practice is to give a range rather than a single number. Go a step further and give really specific numbers - it will show you’ve done thorough research and know what you’re worth and what you truly expect. Instead of saying [currency] 70,000-75,000, you could say you’re looking at [currency] 72,500-75,400.
If you’re truly out of the range of what the employer can offer, this might lead to splitting ways as they don’t want to waste their time or yours, so be careful when stating your expectations. However, if the employer can afford it and may be willing, but may have different numbers in mind, you should definitely negotiate.
But how do you do that? Preparation is key.
Prepare strong arguments based on your research
Prepare arguments based on your background - and be ready to answer the implied why
Practice with a friend or family member
Decide in advance if you would be more flexible on cash or equity, benefits, and the like - sometime it’s easier for an employer to give you more time off than give an additional [currency] 2,000/year
Stay positive and respectful, but confident and convincing
Don’t negotiate for too long - at some point, both sides will become frustrated
If everything fails, show understanding and move on - don’t burn bridges unnecessarily
Ready to take on your next big salary negotiation?
If you’d like more insider information on remote salaries specific to software developers and engineers in Europe, don’t hesitate to send us an email at email@example.com to schedule a free coaching session with our seasoned tech recruiters!
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