Job offers - how to negotiate higher salary due to higher costs of living at the new location

Question

I am a junior software developer, working remotely in Germany with an annual salary of around 40.000 EUR.

Bit of a backstory: Since I am working remote, I can live close to my family in the countryside. Cost of living is really low around here. However, I am open for offers from other companies for mostly one reason: I am the only developer in my department actually "developing" (coding). I have a few excellent developers on my team. However, they are mostly around 50 to 60, and none of them is "really coding" any more. They are all pretty much using different types of graphical middleware for their tasks. So I am doing most of my tasks on my own, and I am the only one writing actual code and using python. I have learned a lot during my last 1,5 years, and my solutions do work, however, I feel like I am missing out on some essential things like actually working together with experienced python developers on a shared code base.

The actual question: I am getting quite a few job offerings on professional networks—most of them from companies in major cities like Berlin, Hamburg, Munich. However, most of the time, those companies are not willing and/or even a bit "shocked" when I tell them my salary expectations are around 55.000 EUR. I always tell them that I have already lived in Munich for five years and know the costs of living and especially rent first hand. I expect my cost of living to increase by at least 15.000 EUR per year; therefore, I need to add those costs to my salary expectations.

Usually, companies will then make some counter offer of around 45.000 to 50.000 EUR. At this point I usually explain that the job offer is very interesting in terms of its content, however, since the company is located in a very expensive city, I would lose money at the end of the month. Sometimes the HR then tries to argue that the cities are not as expensive as I assume. They usually tell me that there is inexpensive accommodation available. However, the accommodation is either very far outside of the city limits (expected commuting time each day 2+hrs and of course additional costs) or representing the cost of a single room apartment, in essence, trying to convince me to substantially lower my standards of living.

After quite a few of these talks, I am a bit baffled that so many companies based in major cities just act clueless about the costs of living at their location and respond so (in lack of a better word) ignorant to a candidate who carefully explains his (how I assume) realistic calculation.

Is there a better way to address this topic?

Answer 1

They aren't ignorant, that's what the local market rate is

As you have seen in multiple attempts already, the market rate for junior developers in those cities apparently is not 55.000 EUR, it is what it is. It does not mean that they're ignorant about what quality of life the lower pay implies, they are asserting (as you have seen and described here) that this quality of life, though lower than what you have, is considered normal and expected for junior developers, and presumably they have been or will be able to find local junior developers who will take that position for that price. The fact that you currently have a better quality of life and want to keep it is not a reason to pay you more, it's a reason to not hire you as your expectations are too high, higher than your competitors.

Market rates are not perfectly matched to cost of living - especially when remote work is taken in consideration. In some locations the market rate for a particular position will allow a better quality of life than others, that's normal (though there's a corrective push through migration). It may well be that your particular situation (i.e. countryside with remote work) is the local optimum or close to it for the ratio pay to cost-of-life, and most people (at least in these major cities) have a worse pay/cost-of-live ratio, and so will you if you choose to move to that market.

So perhaps don't? Keep the same arrangement, get a similar new arrangement (this may be hard - but if it's hard, then it's a sign that you are lucky, and have better-than-average conditions than you can't expect to sustain forever), or move to a different market in another country? If you do want a higher salary in that specific market, you may have to qualify for a better, higher-paying position; the same companies quite likely are paying the salary you want for more senior developers, the gap between your expectations and their offers isn't much, it's probably the equivalent of just a single "promotion step".

Answer 2

After quite a few of these talks, I am a bit baffled that so many companies based in major > cities just act clueless about the costs of living

They aren't clueless, instead they have and proceed with candidates who are willing to work for the 45-50k range. Many people house-share and do much longer commutes than 2h a day total. For those a studio apartment with short commute would be a step up.

Is there a better way do address this topic?

Ultimately 'why' doesn't matter, move on to someone who is willing to pay what you ask for.

You can argue living expenses until the cows come home but that's the wrong argument and you shouldn't even bother to bring it up. Instead state that for Berlin the very minimum you are willing to accept is 55k and you are not considering offers below that mark, save yourself and everyone else the time of trying to talk you down to a range you will never accept.

Answer 3

A company could not care less about why you need the money. If your rich aunt had a flat right next to their company and lend it to you rentfree, would you work there for 30k ?

They have a budget for the position you apply for and they will stick to this budget, unless you can prove you will bring value in a way they did not think about when they opened the position. But I hardly think it is feasible during an interview process.

Your previous salary is irrelevant, do not share it to them. Just state what your salary goals are, and move on if they are not interested.

They either:

• Do not have that money
• Do not think you are worth that money.
• Think they can find someone as or more valuable than you for less money.

Answer 4

Problem is you're trying to justify yourself.

You tell them what your salary expectations are (always say it's a little higher than it actually is), that's it. End of.

There isn't really anything to say if your expected salary is beyond what a company has budget for... only apply for positions that offer your expected salary.

If you try to justify yourself, recruiters will just use that to give you unsolicited advise to push you into accepting lower offers.

I once told a recruiter I didn't want to work in a specific town because the commute was about 3 hours each day. I told him my last company was located there and the traffic was really bad all year round... He then tried to argue that it was only a 1 hour commute, and that I could take public transport... which I told him takes 40 minutes longer but he wouldn't have it.

Also, you shouldn't share your current salary or what percentage increase you want. These things usually work against you, unless you're asking for the same salary or a smaller percentage increase.

Answer 5

The issue you are probably having is that these places are expensive to for an individual. If you had a partner who was also earning 45-50k Euro you would be fine living there.

I get this a lot in the UK too, places offering lowball amounts to live in London or some other expensive place, on the assumption that you have two wages.

All you can do is explain to them the situation and that for you it's a requirement you can't ignore. In fact it may be beneficial to ask for slightly more, maybe 60k Euro, and pitch yourself at a higher level, e.g. senior engineer/team leader. Sometimes they can't budget enough for a mid level person but for a senior they can.

Answer 6

This is a problem of relativity. Your experience is not the same as theirs. Your opinion on an acceptable work/life balance and the compensation to justify it is not the same as theirs.

I don't know German wages well enough to comment on the objective numbers. Though I am in a neighboring country, and €40k for a junior developer position is quite an impressive paycheck.
I know several fresh junior developers who work for around €25k or less a year, and that is including on-site work and commuting. For reference, the cost of living here is over all even higher than it is in Germany.

Ignoring the specific salaries, since I don't have perfect knowledge on Germany's salaries to confirm my suspicions of you having an above average wage already, there are several things you need to consider based on the interactions you've had with the employer, regardless of the specific numbers involved.

1. The company may simply have a capped budget.

They wouldn't want to admit that cap, so they're more likely to just argue that the amount offered is the correct amount.

It also doesn't make sense for them to show that there is a cap. If an interviewee doesn't like the amount, they'll leave anyway. The only interviewees who stick around are the ones the company has a shot of hiring.

2. What makes you stand out?

You describe yourself as a junior python dev who works by themselves (coding-wise). But how many of those are walking around? Because if there are many other applicants, the company has no reason to pick the one guy who's asking for more than the others are.

The company is always going to hire the person who fits the bill who asks for the lowest wage. That's just pure logic. So to get a job, you have to make sure that you either ask for the lowest wage or make sure you are the best (and relatively unique) fit for the job.
If you're a dime a dozen, you have to lower your wage expectations. If you want a high wage, you have to be uniquely capable for the position.

On top of that, I think you're fighting an uphill battle because of your current position. Thinking like an interviewer, you being a junior working as the sole developer raises some real concern about the quality and readability of your work.

You may be able to refute those concerns, but maybe you're just good at debating. As an interviewer, I don't know that. All I know is that your position as a solo dev is different (pro: independent / con: lack of team-oriented experience) than a junior dev who already worked in close team connections.

Whether an employer values independency or team-oriented experience more, depends on the employer.

3. The company may have a different "normal".

Due to working remote, you have a better work/life balance. But at the company, everyone lives in/near that city, everyone commutes, and no one is considering asking for a raise to compensate the commute time, because they'd be commuting regardless of which company they'd work at.

In other words, if all companies in that city offer the same wage and suffer the same commute time, then employees in that city are going to see these offers as (local) market competitive, regardless of what you, outside of the city, in a remote job, earn.

4. The company may be naive about remote working benefits

If the company significantly underestimates the benefits of remote work, they're also going to undervalue them.

If the company doesn't even do remote work to begin with, and they're not in a sector where that is impossible (e.g. hospitality), then it's highly likely that the company doesn't particularly think it's an effective strategy, and likely doesn't see its value.

If they undervalue the benefits of working remote, they're going to offer a smaller wage bump to offset the loss of your remote working benefits.

5. You may have been taking your current wage and benefits for granted.

When you moved from working on-site to remote, did you take a pay cut to enable yourself to do so? Is this pay cut you took about equal to the pay raise you're now expecting?

Because you can't have it both ways. If you did not take a pay cut (or a smaller one than the raise you now ask) when you moved to working remote, you effectively gained added value, from having a better work/life balance, while retaining a proportionately higher wage than jobs with significantly worse work/life balances (due to commuting).

Simply put, shit jobs need a higher wage for people to want to do it. Conversely, fantastic jobs have less competitive wage pressure as the job itself is already desirable.

Similarly, just because you got a sweet deal on your last job offer doesn't somehow entitle you to getting an even sweeter deal for your next offer. For the sake of example, suppose you worked for an average wage, and then switched jobs to a company that pays above average for the same work.

If you now seek to leave that company in favor of a new employer, those prospective employers are not in any way required to offer you above average wages that match or exceed your current employer's wage. They will offer you what they're willing to offer you, and it's up to you to decide if that's good enough for you or not.

Them not offering you what you want them to offer you is a baseless complaint. You can't force them to offer something they don't want to offer.

6. If you can't find anything better, then clearly what you've got is very good.

If you cannot find any employers willing to offer you the same employment value (either in raised wage or work/life balance); then maybe you should count your lucky stars for the great position you're in now.

The odds of all of these employers making unfair offers is massively less likely than you having a skewed perspective of what a job in your current position should earn you.

Looking for a job entails looking for something you like (again, whether that's due to high wages, a fantastic job, a great work/life balance, ...).

If you don't find anything you like, then don't move jobs.

however I feel like I am missing out on some very important things like actually working together with experienced python developers on a shared code base

If you feel like working on-site is the way forward here, that means you have to evaluate your position differently. In such a case, working on-site would become the benefit, and working remote would be a negative.

But the ability to work on-site is entwined with commute times, and living in a geographically nearby area. That's a package deal. Either you like it, or you don't.

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You have to make up your mind on what it is you want. Then you go look for the opportunities that fit your plan. Then you find the best offers on those opportunities. And then you decide whether any of these offers is good enough to take them up on.

It seems like you're stuck on the finding stage. This is an indication of there simply not being any jobs that suit your requirements. If that is because your expectations are too high, and if a job that fits your needs is going to pop up in the future, is nigh impossible to conclusively answer.

Answer 7

Option 1

Take the 50k job (10k increase), work 1 year, look for the next job with another 10k increase.

Option 2

Apply only to jobs where you can demonstrate your value, either by networking and having their employees vouch for you, or by presenting at conferences, or by researching target companies well and being able to confidently claim you're a prefect fit to their tech stack, company values, etc.

Option 3

Have a backup, consider which is easier for the recruiter to sell to company management:

1. 55k ask, compared to current income of 40k
2. 55k ask, compared to another offer of 50k

Impractical tips

Applying to many more companies, refusing to disclose past pay, negotiating hard, etc.: already mentioned in other answers, and generally correct advice, however it depends on business culture (unlikely, but can backfire) and can always be used in conjunction to the above.

Answer 8

I'd say 55k isn't completely unreasonable, but the 15k increase in cost of living is, and that comes across as a bit weird -- basically the only way this would be accurate is if you lived rent-free with your parents right now.

My negotiation strategy would include a bit of an increase in "base" salary, as you are more experienced than when you started your first job, but you are not applying for a job with a different title, and a bit of an increase for higher cost of living due to the move.

I disagree with the notion that cost of living is not the company's business -- it is a result of their choice where to place their headquarters, and they are aware of that (and so they have a clear idea of how much more expensive their location is than others, which is why the 15k raises eyebrows).

Arguing with cost of living alone can backfire in another way: your argument goes out of the window as soon as remote work is an option.