Bagging a startup job is a dream for many jobseekers. As of 2016, 65% of the Singaporean workforce are employed in small and medium-sized enterprises (SMEs). The startup life is an alluring prospect for jobseekers regardless of experience. Who wouldn’t want to work in a casual workplace where co-workers are friendly and company progress is heartily felt on all levels?
As fulfilling as it may be, longevity and enjoyment at a startup require a lot of patience and effort. Let’s face it: you still have to put food on your table at the end of the day. Let’s say you finally got that job in a startup you’ve been eyeing since day one. What now?
Much like any other job, ensuring your longevity starts even before you accept the offer—negotiating your salary and compensation. But unlike other jobs, employment at a startup works differently. How you negotiate your contract here may be different from how you do it with a multinational company.
Here are a few quick tips before you ink your very own startup deal.
Do your homework
The biggest mistake you can make while negotiating any job is to know nothing about how the company operates. The same holds especially true for startups versus bigger companies.
While they can certainly carry the bravado of a multinational company, startups can’t realistically give you a six-figure salary right off the bat. You might even need to do some heavy bargaining to get a hefty compensation package. Demanding an exorbitant salary from the get-go can turn them off from further dealings with you.
Learn where the startup economy is currently at, and how your potential employers figure themselves in that economy. Knowing where the country’s startup community is at can give you an idea of how much you can negotiate with. At most, startups are usually at par with the current salary average.
Researching a startup’s business model will help you gauge how much they’re willing to give their employees and how much growth they’re expecting in the near future.
Some employers may be willing to give more than the current average. Some may even ask you to “invest” in the future, rather than give you an amazing salary right away. For example, if they’re projecting a rapid growth rate in the next two years, you might consider settling for that small paycheck while you wait for that growth to come in.
While this information can easily be Googled, don’t be afraid to ask your employers as well. Remember that they want you to succeed as well. If they can’t divulge that information, it’s still worth a try.
An option that employees often forget is the equity. The beauty of working for a startup lies in the equity options and grants available to the team. You’re working with a team, not for them. Unlike bigger companies where you’re just considered an employee, startups (especially small ones) may consider its hires as founders.
In lieu of a high salary, startups may choose to give you equity or stocks within the company. This includes stock grants (in which you already own stocks upon employment) or stock options (in which you can purchase stocks at a set price). The amount of discussion this may entail depends on if the startup has already issued its IPO. Post-IPO startups are usually easier to negotiate with.
In simpler terms, the startup is allowing you to invest in a future that you can actually help achieve. Because of its size, a startup is one of the few business models where an individual employee’s performance can affect how stocks go up or down.
Negotiating a startup salary isn’t just about settling for whatever they offer you. If you know that you’re worth more than their starting salary, state your case. The worst feeling you can have as an employee is undervaluation. If you’re not paid for what you believe you’re worth, it can hamper your performance in the company. Firmly negotiate but be polite. Confidence sparks interest, but no one likes arrogance.
This also includes other factors besides monetary salary. There’s nothing wrong with asking for benefits when you receive your job offer. Benefits are part and parcel of a suitable job offer and an employer’s repertoire. In fact, 79% of companies believe that benefits are essential to keeping employees on board. While teams that are just starting up may not have that option, a reputable company will provide that for its employees.
Additionally, time and place is an option you can negotiate for. Companies today are embracing flexible working hours and workplaces. If you have other obligations apart from work (such as kids at home), be sure to make it known, especially if you’re sure that flexible working conditions can help your work productivity.
Confidence is key
Knowing the nitty gritty about the company and about yourself is the first step to negotiating a contract that works for everyone. A startup team wants you to succeed as much as they want to themselves. At the end of the day, the best way to know if this is the right job for you is to ask yourself, “Is this the right place for me?”
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