Project Management

How to Negotiate the Best Project Manager Salary

Written byJohn Terra
|
Updated onJune 20, 2024

Money is one of those topics that only some people actually enjoy talking about. On the contrary, it’s a discussion that makes many people feel awkward and uncomfortable. However, the harsh truth is that you may be taken advantage of if you don’t try to negotiate reasonable compensation.

So, this article shows how a project manager can negotiate a fair salary most effectively. We will explore some figures showing a typical project manager salary, compensation components, and common pitfalls to avoid in negotiations. We’ll also share a project manager bootcamp professionals can take to boost their skills and become more marketable.

But before we get into project manager tips for better pay, let’s look at the salary landscape.

Average Project Manager Salary

If you type in a search term such as “project manager salary” or “pmp certification salary,” you will get different results depending on which salary website you visit. For example, in a quick look at some of the most popular job sites, Indeed.com reports that the average annual project manager salary is $88,474, while Glassdoor.com shows $99,286, and Salary.com clocks in at a whopping $143,003!

Of course, salary figures fluctuate depending on the area of the country, manager experience level, individual skill sets, different industries, individual companies, demand, and the overall economy. The above figures count only the actual salary, not additional perks. We will discuss this in greater detail in the next section.

Also Read: What is Change Management in Project Management?

Components of a Project Manager Salary

Compensation is more than your base pay. Here are the various elements of the standard project manager salary.

Base salary. Let’s begin with the most basic component: the base salary. As we’ve noted earlier, this number is affected by many factors. A newly hired, entry-level project manager will fetch less than a project manager with 20 years of experience. Also, it’s a fair bet that Microsoft’s project manager earns more than a similar position at Joe’s Discount Phone Apps and Bait Shop.
Sign-on bonus. Sign-on bonuses are standard for many positions in many industries. Start-ups, eager to recruit well-seasoned help to get their organization off the ground, are particularly likely to offer sign-on bonuses, often paying half at the start and the remainder a year later. More established companies pay sign-on bonuses in one lump sum, usually within a month of starting the job. You can attempt to negotiate sign-on bonus elements such as payout terms and conditions, amount, and timing. Of course, if the organization doesn’t do these bonuses, it’s a non-starter.
Performance bonuses. Many project manager jobs provide an annual performance bonus determined as a percentage of their base salary. The actual percentage typically depends on the company and the manager’s performance, meaning your bonus could go up or down depending on the targets you or your company hit. Unfortunately, these bonuses are usually non-negotiable since the percentages and goals are typically established company-wide and baked in as official policy.
Equity packages. Equity is a highly desired compensation component in these roles and is typically negotiable. Project managers may receive a starting equity grant as stock options or RSUs (restricted stock units or restricted stock awards). This perk typically includes shares or options that will vest over a defined timeframe outlined in a vesting schedule. Although project manager equity can make a huge difference in a project manager’s total compensation package, the equity value fluctuates based on the hiring company’s market value. For example, if you land a project manager position at Apple, you’ll benefit if Apple’s share value rises, but you’ll take a loss if the share value drops. Also, remember that if you quit before the equity vests (typically several years; the organization wants to keep employees in the corral for the long run!), you risk losing it altogether.
Equity refreshers. This perk is less common than equity packages, but it does exist. Equity refreshers are additional stock offerings that supplement the initial equity package. However, every company that offers refreshers has its set amounts and timing, so it would be prudent to ask for these details beforehand.
General perks and benefits. We round out the list with the basic perks that any employer typically offers new hires: health insurance, 401K programs, vacation days/personal days, long and short-term disability, and holidays. Some organizations even offer perks such as gym memberships or discounts for goods and services from local businesses.

Now that we know the types of compensation typically available, how can you negotiate the best deal for yourself and get these sweet project manager perks?

Also Read: What is Project Scope Management?

Tips for Project Management Salary Negotiations

These negotiations begin at the interview process but continue throughout your years with the company as you attempt to negotiate bonuses and annual merit increases.

Familiarize yourself with the components of a project manager salary. Since you’re reading this article, congratulations, you’ve already achieved the first step! You get better results if you negotiate from a position of knowledge.
Ask intelligent questions. Knowing the project manager’s salary details, you can ask informed, smart questions. This step includes clarification of any ambiguous points in the organization’s compensation package. This advice also works if you want a raise in your project manager salary. By knowing what project managers make and their demands, you can point out things such as your current salary needing to keep pace with the current going rates for new hires.
Document your value. Bosses can be oblivious to how much work you’re doing and how well you do it. You must be your own public relations agent and be ready to back up your worth through thoroughly documented achievements, milestones, successful projects completed, etc. Some bosses are pressured by THEIR bosses to pinch pennies and be “tough” with their employees, so they may ask, “What’s your proof of your value?” and that’s when you hand over that documentation and make your case.
Consider upskilling. Project management is a people-oriented profession, so you should practice and develop good people skills if you need more. Also, project managers often need to be more generalists and gain more knowledge of the technical skills of the people under their authority. Consider learning the basics of coding to help you lead more effectively (and consequently become a project manager the company can’t afford to lose!).
Get certified. A project management certification shows organizations you have the education and tools to manage a project consistently and successfully. The certification is a tangible verification of your new skill set and typically commands better compensation packages.
Don’t be afraid to counteroffer. Negotiations are a give-and-take proposition. If the recruiter’s offer falls short of your expectations, consider a polite, professionally rendered counteroffer, typically through an e-mail, where you can take all the time to consider your words carefully. Remember, the recruiter has probably been instructed to get the best candidate at the most cost-effective price. Yes, they want you, but more often than not, they want to see how cheaply they can get you. A little healthy back and forth can prove valuable, and showing the recruiter that you have confidence in your skills and experience is a healthy trait!

Also Read: How to Use Microsoft Access: A Comprehensive Guide

Mistakes to Avoid During Project Manager Salary Negotiation

As mentioned before, no one likes to talk about money. Consequently, it’s easy to make mistakes during the negotiation process. You should watch out for a few pitfalls when discussing your salary and other compensation.

Fear of offending the organization. Many aspiring applicants fear mentioning money out of fear of offending the recruiter and possibly getting removed from consideration. There’s that concern for “not making waves” that stops people from speaking up politely and respectfully about their expectations and perceived value. In reality, most recruiters expect a little haggling and back and forth regarding compensation. No professional organization will spring a “gotcha!” moment on a candidate and boot them out.
Embracing unrealistic expectations. On the other end of the spectrum, we have people who are a bit “reality-challenged” when negotiating a salary. Yes, project managers are in demand and pay well, but an entry-level manager will NOT get the compensation package of a 20-year veteran, no way, no how. Again, research the salary ranges and get informed about the going rates. And speaking of expectations…
Talking about salary expectations before getting an official offer. We work because life costs money. We all know this. However, if you start throwing around numbers before getting a full understanding of the role and having an offer extended to you, you will self-sabotage in one of two possible ways. Either you will demand a lower salary than they were planning on offering you, thus lowballing yourself (most companies won’t turn down the opportunity of saving money!) or pricing yourself out of consideration due to an unreasonably high figure.

The More Skills, the Better the Compensation

We mentioned certification earlier, and if this sounds like a path you’d like to take, consider this post graduate program in project management. This 24-week bootcamp will give you valuable skills that makes you stand out to a recruiter. The online program features live online classes and capstone projects aligned with PMI-PMP® and IASSC-Lean Six Sigma. So, if you want to boost your skills and knowledge, look no further.

Now that you have been brought up to speed in project manager salary negotiations, it’s time to put what you learned into practice. Good luck!