Why setting realistic salary expectations is important
On OfferZen, we’ve found that qualified candidates can get rejected solely on the basis of their salary expectations, which companies might deem out of their anticipated range.
For developers, two things are critical in the tech hiring market:
Benchmarking your salary expectations against the market situation
Having a clear idea of what other benefits you care about in a compensation package
Considerations to keep in mind when benchmarking
What are the current tech hiring trends?
Tech hiring doesn’t exist in a bubble. It’s affected by world events, global trends, and economic policy. It’s therefore important to understand the state of the tech industry when you’re benchmarking your salary.
For example, after the tech boom during the COVID-19 pandemic, many tech companies scaled rapidly, and it was reasonable for developers to ask for higher salaries as demand for their skills was at an all-time high.
Post-pandemic, the tech industry experienced a cool down due to increased interest rates and worsening trade wars between world powers. Increasing interest rates led to companies drawing back on capital expenditure, and, consequently, adjusting their hiring strategies. Developers had to be more conservative with their salary expectations in order to remain competitive.
In setting higher than market-related salary expectations, you may be blocking yourself off from multiple opportunities as companies are just not able to offer these larger figures. Particularly in times where companies are tightening their belts, you may have to make a trade-off on your salary expectation in order to secure an opportunity where you can grow your compensation in the long term.
Conditions to consider when benchmarking:
The overall state of the global and local tech industry
The current interest rate
How saturated or in-demand your skill set might be
The size of the industry you’re in
The size of the company you’re applying to
The nature of the work you would be doing
Your current salary and the kinds of increases employers consider standard
Check out our list of resources below for a good starting point in assessing the state of tech hiring.
There’s more than salary when it comes to remuneration
When setting your salary expectations, it’s important to remember that there’s more to remuneration than salary alone – things like equity, benefits, and other perks can add more than just monetary value to an offer.
Consider what you would want from a job beyond a competitive salary. For example, here are just a few kinds of benefits that companies might offer:
Equity in the company
Contributions to a retirement plan
Medical aid coverage
Annual bonuses
Competitive parental leave policies
Access to a financial advisor
Unlimited annual leave
A budget for further education and training
Make sure you’re getting the full picture of job offers, and that they match up with what you value in your career.
Benchmarking your salary increase expectations
Most companies consider a 10-15% increase from your previous job as the norm. That said, in times where companies might be hiring less, they tend to limit the increases they offer to fall more within the 6-10% range.
If you’re asking for a rise in salary far above 15%, keep in mind that this falls beyond what most companies consider easily achievable.
If you’d like to ask for these salary ranges in any case, know that your pool of options will be smaller and make sure you have your reasoning well prepared for your conversations with the hiring team.
There are some exceptions to this rule of thumb:
If you’ve been underpaid in the past: In this case, asking for more than 15% might be fully justified, if you can back up your points with solid research. Be sure to bring this point across clearly in your conversations with the hiring manager.
If you’re moving countries between vastly different economies: For example, if you’re moving from Greece to the Netherlands, it’s more common to ask for a high salary increase since you’ll need to be paid a better salary for the cost of living in the Netherlands. Just make it clear that relocation is your intention
If you’re relocating with a family: The cost of relocation increases significantly if you have a partner or family relocating with you. It’s reasonable to request higher compensation to account for this. When discussing relocation, be sure to mention any family or dependents you would expect to bring with you.
If your seniority and skills justify it: If you are at a very senior level, have an extremely scarce skill set in very high demand right now, or are performing at an exceptional level, companies would be more willing to compromise on their salary budgets. In this case, it’s crucial to showcase these skills in the technical interview process.
Steps for setting your salary expectations
Consider the workplace policy: If you’re looking for exclusively remote jobs, your costs will likely be lower than if you had to commute to the office every day or even a few times a week. Keep this in mind when you’re setting your salary expectations.
Check visa requirements: If you are looking to relocate and will require a visa to do so, check the visa requirements. Some visas require that you be paid a minimum salary, and this can differ according to your age. Your salary expectation should ideally cover this.
Use a cost-of-living calculator: This will help you settle on a reasonable salary for the region in which you want to work. Examples of these calculators include Numbeo.
Rely on good sources of data: Benchmark your salary against reputable, objective sources like data reports. Don’t rely exclusively on subjective data like salaries that friends report, for example. While useful information, this might be an outlier to your own job search and difficult to rely on in conversations with employers.
Adding your salary expectations to your OfferZen profile
When you are creating your OfferZen profile, you will be asked to enter your current salary and your preferred salary.
It is optional to include your current monthly salary in your profile. This will be used to give you expert salary advice, and will not be shared with any companies. You will also be prompted for a preferred salary in either ZAR or EUR, or both, depending on the remote policy and locations they want to work in.
If you’re struggling to decide on an amount for your preferred salary, don’t worry. Your Talent Advisor can help you update it later on if you’re unsure.
Resources to help you benchmark your salary
OfferZen’s Salary Hub: This is a consistently updated directory of all of the articles we publish about salary trends in South Africa and Europe
2023 South Africa Report: The State of the Software Developer Nation: Based on the results of a survey of 4500+ developers, this report is filled with data-backed insights on what developers are earnling, learning, and looking for in their jobs in 2023.
2022 Netherlands Report: The State of the Software Developer Nation: This annual report explores what it’s like to be a software developer in the Netherlands, including career growth and salaries.
How to Benchmark Your Salary Expectations as a Developer in 2023: A look at the current economic climate and how you should approach your salary benchmarking accordingly
4 Steps to Get the Full Picture of Your Developer Job Offer: Steps to help you get all the facts you need to make an informed choice on your offer.
How to Approach Your Developer Job Search in 2023's Hiring Climate in the Netherlands & Germany: A guide for navigating the difficulties of the current hiring climate.
How to Negotiate a Job Offer that’s More than Money: How to negotiate a salary offer, and navigate the conversation like a pro.
Salary, equity, or crypto: Analysing different types of remuneration in a job offer: How you can analyse different types of remuneration in a job offer to make the best, timeous decision for your next career move
Salary Vocabulary
There are a lot of different terms used to describe remuneration, both on and off OfferZen. Here’s a breakdown of what they mean, should you encounter them:
Cost to Company (CTC): the amount that a company spends – directly or indirectly – in hiring and sustaining the service of an employee. In other words, CTC is a term for the total salary package of an employee. It indicates the cumulative amount of expenses an employer spends on an employee during one year.
Gross Salary: An employee’s pay before deductions. One’s gross pay may consist of tips, bonuses, commissions, overtime, wages, and so on.
Net Salary: An employee’s earnings after all deductions are taken out. Examples include PAYE and UIF in South Africa, or Social Security and Unemployment taxes in countries like the Netherlands. Other deductions come in the form of benefits, which may be optional. Medical aid or a retirement fund may be offered through an employer, in which case these costs are deducted from the employee’s gross salary.
Super Gross Salary: The employee’s Gross Salary plus the Social Security and Healthcare costs (among others) that are paid for by the employer as part of their taxes. This is a term that is commonly used in the EU, but less so in South Africa, where CTC is more common.