Breaking down pay bands: SWE’s guide to good salary research
Most software engineers miss the mark on salary research, here’s how to do it right.
This post is written by Marques Hill, a proud Spartan from San Jose State who has nearly a decade of experience in the people, talent, and sales space, working with industry giants like Meta and Cisco. While he’s held several recruiting roles, his expertise truly lies in people operations. Marques has helped major organizations, such as Lyft, adopt and configure applicant tracking systems and tools like Greenhouse, Lever, and Workday, ensuring operational efficiency in recruiting.
He also specializes in helping companies process and leverage hiring data for smarter decision-making. An expert in sourcing, recruiting, career coaching, and negotiating, Marques shares his knowledge of top-tier hiring practices with job seekers. In the last two years with Formation, he’s hosted nearly 500 sessions, helping 125 fellows secure roles at companies like FAANG, Pinterest, Reddit, Roblox, and more.
The job market has shifted significantly over the past few years, especially since the pandemic. With so many talented professionals re-entering the workforce at once, there’s been a larger pool of candidates competing for fewer roles. In this environment, companies are often more conservative with their offers, and many candidates accept the first offer they receive, even when it doesn’t reflect their actual market value.
For underrepresented groups like women and people of color, the impact can be even greater. Many don't negotiate as aggressively as others, and as a result, they end up underpaid compared to peers with similar skills. Understanding the nuances of pay levels, compensation bands, and how these factors differ across companies gives you leverage. Knowing what you’re worth and having the data to back it up helps you avoid this trap and ensures that you’re negotiating from a position of strength.
Here’s how to do appropriate research and set yourself up for success.
How to get started with salary research
When it comes to negotiating salary, most people don’t dig deep enough. They focus on a single number instead of understanding all the factors that go into pay. Doing thorough research means looking beyond just the salary number. You have to understand how different pieces of information, like your experience, location, and company size, all affect what you should be earning.
Here’s what you need to know to do it right:
- Your current role: Where do your skills and experience stand in your industry?
- The job you're applying for: Is it a step up, sideways, or down—and how does that change what you should be paid?
- Pay bands and location: How does geography impact the salary ranges for this role?
- Company size: Are you negotiating with a startup or a big corporation, and how does that affect pay and benefits?
Understanding leveling
The first step in salary research is understanding your level in your current or previous role. Each company has its own way of classifying roles—some use titles like "senior" or "staff," while others use a number-based leveling system. Knowing your exact level helps you make accurate comparisons when looking at salary data from other companies. If you’re not sure what your current level is, ask your manager or the HR department. They should be able to give you an accurate assessment of your current seniority.
Once you clearly understand your level, research how salaries are structured for your level in the market. Look for data that breaks down compensation by role, location, and company size. While websites can give you broad figures, it’s important to adjust those numbers for factors like where the company is located or if it offers equity as part of your compensation package. You’ll also want to understand the full compensation package, including bonuses, stock options, and other benefits, not just the base salary.
There are several platforms specifically designed to help software engineers understand salary expectations based on levels:
A quick note: While Glassdoor has salary data, it's not always as reliable as other platforms.
How to interpret pay bands across companies
Once you’ve gathered your salary data, take the time to understand the pay bands associated with that level. A pay band represents a salary range for a specific level within an organization, typically based on factors like experience, location, and role. Understanding where you fit within these bands is key to navigating a company’s compensation structure.
Location plays a significant role in compensation. Salaries for the same position can vary widely based on geography. For example, software engineers in San Francisco or New York often earn significantly more than those in smaller or lower-cost cities. Companies adjust salaries to reflect the local cost of living, meaning you’re likely to see a higher base pay in major tech hubs compared to more affordable cities like Austin.
For remote roles, companies may adjust pay based on your location, while others may offer a flat rate regardless of where you live. Researching salary ranges for both your location and the company's headquarters is crucial. It empowers you during negotiations, ensuring you aren't undervalued due to geographical differences.
By understanding pay bands and the impact of location, you’ll have a clearer sense of what fair compensation looks like, giving you the confidence to negotiate based on a comprehensive view of your market value.
How to factor in company size
Company size is another factor that can have a big impact on your overall compensation package. Large tech companies like Google, Meta, and Amazon typically offer higher base salaries, along with substantial bonuses and stock options (often in the form of Restricted Stock Units or RSUs). These companies have established pay structures and more financial resources, which allows them to compensate at the higher end of the market.
On the other hand, startups—especially early-stage ones—may be unable to match those base salaries. Instead, they often offer equity as a larger part of the compensation package. While this equity has the potential for significant upside if the company succeeds, it also carries more risk.
The trade-offs between a large company and a startup come down to what you value most. A larger company can offer stability and immediate higher pay, while a startup might give you more opportunities for growth and a potentially larger future payout if the equity appreciates.
When and how to use salary research in your interviews
You should use salary research strategically during interviews, but avoid discussing specific numbers early on. Here’s how:
- Before the interview: Thoroughly research salary ranges for your role, level, and location. This will help you set realistic expectations.
- During initial interviews: If asked about salary expectations early on, remain vague. Say something like, “I’d prefer to understand the role and responsibilities before discussing compensation.” This ensures the company evaluates you based on your skills, not your salary history.
- Later in the process: Once the company clarifies your level and the role’s expectations, you can introduce your salary research. Use the data to back up your salary request, showing you’ve done the homework and know the market range for your position.
- Final negotiations: Present your researched salary expectations confidently, considering not only the base pay but also other aspects of compensation like bonuses, equity, and benefits.
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