Ten Rules for Negotiating a Job Offer
medium.freecodecamp.com
medium.freecodecamp.com
When I was fresh out of school, at the tail end of the dot-com boom, negotiation seemed very much central. Employers (and the third-party recruiters working for them) always wanted me to throw out the first number, or wanted to know what I was making at my last job. Then once I was at the new company for awhile, people would gossip... and I'd always discover that I'd low-balled myself. So I would leave, using the apparent market rate as my baseline in the next search. And I simply stopped disclosing what I was making at the previous job.
I learned that the difference between a $70k candidate and a $90k candidate is basically just that the latter declares himself to be a $90k candidate.
However, once I crossed over the $120k line (at least in my local market) it seemed that things plateaued and changed a bit. It's not as easy to just "declare" that you're a $180k candidate rather than a $140k candidate. At that level, you often start to find that you're interviewing for managerial positions rather an individual contributor technical role.
At this stage of my career, I pretty much tell the recruiter my target (which happens to be about 5-10% more than my current salary), and then I'm not even wasting my time interviewing with companies that won't go that high.
Ten or fifteen years ago, I was apparently selling myself short. Today, I don't talk about salary IRL, because I'm making significantly higher than what I hear through gossip or see on Glassdoor.
Is this common for other experienced devs out there? Or am I selling myself short, and probably should be making $750k for a non-managerial job outside of the Bay Area by now? (haha)
Earlier in my career (who am I kidding, 7 years isn't a long time) I'd find myself in a situation where I was consistently lowballing myself (i.e., stating a number and having it automatically agreed to, oops). I soon learned to state the nuttiest, most absurd number I could think of (and then still have people say yes, damn).
Now I find it challenging to find companies willing to pay my current comp. I've largely stopped interviewing at startups completely because the comp is always disappointing, even assuming wildly optimistic things about equity outcomes.
It seems like my path forward now is either into the merry-go-round of AppGooFaceSoft, which are the only companies playing in my comp range, or taking a severe pay cut to work at a startup.
> " you often start to find that you're interviewing for managerial positions rather an individual contributor technical role"
My impression has been that the vast majority of the industry tops out engineers fairly quickly on the compensation scale, and the only way to keep going is to move into management.
The only places where this doesn't seem to be true are the BigTechCos, where ICs can go pretty darned high.
That said, if you want to be making $750k programming outside the bay area, it's possible, but the recruiters on cybercoders and linkedin aren't going to help you get these jobs...
750k? Am I reading this right? What planet am I on?
What kinds of positions are these?
They will not only have a high programming competency, they will also have a fluency in the commercial domain: They will know the difference between what the boss wants, and what the boss asks for. NB It is their problem, not their bosses'. They often possess niche and unique experiences. They can network and know how to sell the link between their skills and direct company value. They may also be recognisable figures.
Most of the people I know who make this kind of money do not get int a room with puzzles or "well defined product specs" slipped under the door to solve in, having "however long it takes" to get it done. They don't sit at a bug tracker and tick things off. They work for that money. Yes, they program. Is this the kind of programmer you want to be?
What does "NB" stand for? Thx.
Back when I was passively looking I too would just state the ole "don't won't to hear it unless it is above a certain amount" (and I too am +15 years developer). I would often state outrageous numbers like $250k (sadly that is no longer outrageous to me but it once was) and you would think that would scare off most but many would want to continue the conversation back and forth regardless if the company could pay or not (at times this was annoying).
To get in that position of asking for bonuses requires some serious leverage and internal knowledge of the company along with powerful negotiation skills. I somewhat got out of that headache by starting my own company (albeit it is always there directly/indirectly... selling yourself) so I can't give too much advice more than the article does already.
I'm not sure what the wall is after $255k as it may just be an nice exponential curve (and again this is just anecdotal).
[1]: http://chiefexecutive.net/how-much-does-the-average-ceo-real...
What's a good way of phrasing this to come off as non-combative? I always feel awkward saying something like "I'm not comfortable telling you that information".
As a rule, I don't tell third-parties (recruiters, etc) my current or former compensation. I ask what range the company is aiming for, and whether I'm interested or not. I think compensation is something to be discussed only between the candidate and the company.
Anecdotal story: I once was lowballed without my knowledge going into an interview set up by a third-party recruiter, contracted out by the company. They were very excited to get me in - turns out the recruiter gave the company a number that was 25% less my current salary. The company wouldn't be able to meet anywhere near my actual current salary, but the recruiter wanted to get a butt in the seat by any means.
From now on, I keep that info private until I choose to disclose it.
Even though entry level positions are more commodity driven - there are many people that can fit the same role - there is still more negotiating room. Maybe more salary can be freed up since the range is lower anyway.
Another important point, is that companies will often allocate for a senior position in order to catch the candidate they want or settle for the best they can get. If you are senior, make that clear.
The goal should be to find a salary that is appropriate for the employees skills and experience level. Neither too high nor too low.
You do not want anyone to "win" the negotiation.
The idea is to find a salary that will ensure that the employee feels that they are being appropriately paid during their employment, and will not be browsing jobs because they feel they are under market rate. You want to employer to feel that they have someone who is being paid at a level that reflects the employees skills and experience and is broadly consistent with other employees at a similar level.
Negotiating isn't a battle. It's a process of trying to find if there is common ground.
If the employee and the employer do not find satisfactory common ground then the negotiation should end gracefully - both parties move on.
It's important to work out at the very beginning of the employment process if jobseeker and employee are in the same ballpark on salary - it's silly and wasteful of everyones resources to get to the end of a process only to find out the parties expectations do not synch.
of course it is. you make this sound like there is no asymmetry, that it boils down to two equal parties sitting down to chat over tea. that's not the case. this is a completely asymmetrical process, where the firm really has most of the power. they are essentially uneffected, no matter the outcome of the negotation.
"it's silly and wasteful of everyones resources to get to the end of a process only to find out the parties expectations do not synch"
again, you are implicitly promulgating the fiction that this amounts to two equal parties trying to find a meeting point. it just isn't. i see how tech companies go about recruiting. it's an assembly line. their recruiting process is a well-oiled machine, an assembly line -- and i'm the widget on their conveyer belt. if i attempt to get a salary that i think i deserve, and fail, they won't lose any sleep. their well-oiled machine will continue to hum.
software engineers are a commodity to the firms we interview at. you patronize us by suggesting otherwise.
If there is an ongoing relationship and one party "won" the negotiation then the price is resentment and likely "evening up" by the "loser" at some point in the future.
In many cases it is worth conceding some value to the other party even if the other party has no leverage just because you (as the "winner") want the other party to feel that they did not "lose" the negotiation. For example say a potential employee asks for an extra $10K. The employer might know that the new employee will take the job even if the $10K request is refused. But just to ensure the new employee saves face and feels like they were valued and listened to and did not "lose", then a wise employer might give them $1K or $2K or some other concession instead such as a guaranteed review in 3 months.
At the end of the day, unless I'm a terrible employee, the employer still profits off of me and still "wins." There might some some opportunity cost here and there (they could have hired person B for $X less!), so from there on out it is my job to prove that I am worth the $Y salary that I worked so hard to negotiate. I don't want them to think about the "what ifs" of not hiring me, I want them to see the value I put on the table.
For me, personally, I always try to do my best work, no matter how much I am being paid (my latest contract job was $15/hour and was definitely way below my pay grade, but I put my best foot forward regardless).
Since I know that many other people will only perform to the rate at which they think they should perform at that pay level, that puts me at an advantage. I can negotiate a higher salary and prove that I will always over-deliver, thereby proving my worth.
I get a nicer salary, they get an exceptional employee, win-win.
Of course, if I end up not performing up to the price I put on myself, then the company is not getting what they are paying for, and I'll probably find my name on the list of lay-offs when it comes to that. Rightfully so, too.
"You want to employer to feel that they have someone who is being paid at a level that reflects the employees skills and experience and is broadly consistent with other employees at a similar level."
No, you don't want the employer feels there is equality in salaries. If the employer cared about that it wouldn't have hired on a high salary in the first place. And any "feeling" by the employer is literally irrelevant, as by their own standards, the moment they accept to hire you at a higher salary.
Now, it is different regarding colleagues. But your argument that it is in the employee best interest to not push for a higher salary, is nonsense.
BTW, I am not a developer or engineer, I am a marketing person and no one in my line of work would ever consider this. This sounds a lot like companies that hire tech people trying to rationalize why developers should not earn that much with anything that is not just economical market balance.
I think you far oversell the degree to which people who are being recruited do not have at least one, and possibly far more than one, best alternatives to a negotiated agreement with the recruiting party. Anyone who was to say to anyone around me "you have no alternatives, this is it" will immediately trigger an inventory taking in my own mind of all the possible alternatives that person may have.
Ultimately, I agree about the well-oiled machines, though. It is unfortunate that some organizations end up being run like this. It is bad for them too, especially in a world where an operational mindset can be overturned seemingly overnight by a new, better, cheaper way of doing the same thing.
For people who want to stay where they are, but see this happening, my response to them would be to make this acutely obvious to those around them: both the state of things, and the consequences. Not all companies are in a harvest and exit mode. Some still want to grow, and their growth will be considerably less in jeopardy if they play an offensive game against the market. But, in order to that, they have to stop playing a defensive one against their own employees.
If they realize this, they'll quickly realize soon after that their best alternative is not to turn recruiting into a battle.
Another BATNA I would propose to the people around me is this: invent that better thing. Your new job can be to put the company that treated you like a cog out to pasture.
What I will say this: I don't believe fear of the big, bad recruiting machine is a best alternative to anything. I feel it is consideration of one alternative, realizing it might not work out well, and getting angry. There are other alternatives out there; there is no reason to act so powerless in front of this one.
How many job offers have you accepted or rejected? Perhaps the GP has more experience (and a more even keel) than you?
> the firm really has most of the power
The firm cannot compel you to accept an offer and work for them.
> if i attempt to get a salary that i think i deserve, and fail, they won't lose any sleep. their well-oiled machine will continue to hum.
Perhaps you should reconsider what you think you deserve, or move on to another city or sector that will value your skills more highly than the "tech company assembly line."
The prospective employer has no power to force you to take the job or prevent you from seeking and accepting an offer elsewhere. It is certainly a mutual business process and should be approached as such. To approach it in an adversarial fashion just puts you at a disadvantage versus your true adversary: other applicants.
Ultimately, it basically means that it is in the employees interest to negotiate very high at the beginning... since there are very few forces that will increase their salary once they do join a company.
It boggles my mind how much people will tend to treat negotiations, amongst so many other things, as zero-sum games. If that were true, anyone who claims this should please explain to all the people who entered into negotiated agreements and found mutual benefit how they are actually being screwed by the counterparty.
For those who believe negotiation is zero-sum, I will say to you: if you notice agreements around you tend to turn sour because a party in it feels like they got screwed, take note of the common element.
This includes salary and employment negotiation. Unless you are in a one company town, or otherwise have skills and talents that are transferable to nowhere than your present employer, you most likely have alternatives to explore. Even if this is the case, there are alternatives, although they will not be anywhere near as easy to achieve.
Even then, it is not every employer that will decide the best way to profits is to screw their employees, and hope they feel hopeless. This is but one way to affect the bottom-line, and often not a very effective one. People will be more productive when they don't feel like they are being shafted. Not just in salary, but in: career development; personal sanity; and, if they care and have an interest in such a thing, in the net outcome of the organization.
So, I absolutely agree with you. Do not stand for people who feel like they need to "win" because you'll invariably screw them back. They may ultimately add up to a great big loss for everyone involved.
In the latter case, the standard response I get at the beginning is something like "we are prepared to pay an appropriate amount of compensation based on your skill level". But then when the negotiation actually starts, they balk at the range that I ask for.
You won't get this out of an internal recruiter, no matter how hard you try, unless he or she willingly volunteers it. Instead, go to sites like Glassdoor, or consult with friends at the company or at similar companies.
You want to reduce the information asymmetry as much as possible before starting the interview process. And there are resources and tools available to you to do so.
If you're hearing all the time that your ask is way out of step with the range for the role, then it probably is. Companies don't have blank checkbooks available for roles; they operate on ranges or "bands" that they try to keep consistent across job titles and responsibility sets. If Company X has a range of $125k-$175k base salary for a job I'm seeking, and I ask for $250k, that isn't going to fly, no matter how much I impressed them in the interview. It will strike them as out of synch with the level and title and requirements of the job I am interviewing for. They will either counter within their range and say it's the best they can do, or they'll tell me I'm being unrealistic, and that perhaps my expectations for the role are mismatched with theirs. Often the latter. And if it's a wild mismatch -- say, they have the aforementioned range, and I ask for $350k -- then the mismatch is as much my fault as it is theirs. I didn't do my homework.
The most productive negotiations should be straight talk about the numbers and terms. You shouldn't just hope the other party is stupid and will agree to less than fair terms. When somebody brings up a number ask or explain where it comes from and how does it compare to other numbers. Ask if their offer is fair, something that they would take in your shoes, so that if they say yes and later on it turns out that was not the case, you can raise the issue with a good reason. If the other party starts to get forgetful, dodge questions or lie - fine, you can treat them as a hostile party, but it makes no sense to start off with deception and advantage play against your team. Especially in startups. Big companies have moved on from this more or less anyway.
One is a one-time negotiation, for example, buying a new or used car. All you care about is getting the best price. You don't really care if you're eating into the dealer's margins.
Second is a negotiation that is part of a long term relationship. Here you want to exit the negotiation with both sides feeling good about it. You don't want to jeopardize the relationship for the negotiation. You don't want to screw the other side over.
A job offer should be a type II situation. If any of the parties approaches it like a type I then they probably shouldn't be working together. The employee should get an idea of what they'll be happy with and the company should pay the employee what they'll be happy with. If the employee is approaching this with the idea of taking advantage of the company then it basically turns into a type I situation and the company should walk away. If a company is approaching the future employee as a type I negotiation the employee should walk away.
I was really excited in a previous job where I figured out what I thought I was worth based on my current comp and some research and when I asked for that I got an offer that was somewhat higher. That told me the company cared about making me happy more than they cared about the (negligible) extra $$$'s. That was all the negotiation. Both sides were happy and I was very enthusiastic on my first day. Now in a type I negotiation I would have been able to squeeze them for more money but this is not a type I negotiation.
Another situation where a fairly successful small web company offered me less than I was making at the time. When I tried to get some concessions in other areas like extra vacation time or more time working from home I was flat out refused. Their CTO interviewed and liked me, the team liked me, they got the CFO to tell me how they couldn't afford to pay more. They were really surprised when I declined their offer. From my perspective they were treating me as if they were trying to buy my car and that told me that's the way they would keep treating me if I came to work for them.
The way I see it if you've done everything right up to this point and if both sides are interested the offer is pretty much a mere formality. Not a starting point for bazar style bargaining.
You should be aware that this is not possible... A company will never hire you for a salary it cannot pay, because they know very well their numbers. On the other hand, it is very easy for workers to be screwed because they don't know how much the company is willing to pay for that position. The only way to get to know how much the company can offer is to ask for a salary that is way higher than the first offer.
The author does lament the general trend of "pay secrecy" in part 2 [2] of his previous article on how he landed a job at Airbnb[1] but it's worthwhile to point out here. Almost any offer/salary does not exist in a vacuum but within the context of the current salary ranges (i.e. the market) for similar positions and also different positions.
Look at it this way: If I tell you that apples are 2 Simoleons (§) per lb, is that a good price? There's hardly any way to know, given that I quoted it in a fictional currency.
But if you know that oranges are 10§/lb, bananas are 5§/lb and that you can get a job at the grocery store selling them making 20§/hour, that gives some context to not only the prices of apples, but also the relative value of different produce and the ability to afford it. This is the essence of a market economy, which the job economy is an instance of.
Sites like Glassdoor and other efforts to share salary information[3] (even if they may be subject to reporting bias) are a good way to give you more information about the relative value of any offer, which will be another tool in your kit for negotiation. Read as much as you can, as in my experience it will be well worth your time.
1. http://haseebq.com/farewell-app-academy-hello-airbnb-part-i/
2. http://haseebq.com/farewell-app-academy-hello-airbnb-part-ii...
3. https://blog.step.com/2016/06/16/more-salaries-twitter-linke...
What my company offers is based what value you're bring to the business. If another company sees you as more valuable that's brilliant, but it doesn't change what you bring to mine.
I really disliked to work in places where the job was very good but the pay was definitely not the best. The best way to fix this is to negotiate a good pay at the start: that way you can fully focus on the exciting work.
>I’m the first to admit that negotiation is stupid. It’s a practice that inherently benefits those who are good at it, and is an absurd axis on which to reward people. But it’s a reality of our economic system.
When incentives are opposed (like me wanting good wages, and companies wanting to pay me at little as possible, all else being equal), negotiation seems like the only way to decide how to reach an agreement. Of course it inherently benefits people who are good at it! Those benefits are the things they are negotiating!
Instead of calling it an absurd axis to use to reach mutually agreeable terms, why can't we accept that negotiation is how reach those terms?
Negotiation allows a company to offer more (or less) than a standard wage when a candidate genuinely offers more or less value for the same position. Economically, that seems like a good thing, and I consider that the principal virtue of negotiation.
But the downside is that negotiation enables candidates who are better at negotiating to command stronger offers (because they're more charismatic, or courageous, or just better studied in the practice of negotiating). That's clearly arbitrary. Negotiating skill is an axis that's mostly orthogonal to the value a candidate brings to a company. Here the public sector's system of having fixed, publicly known wages for positions is a good one. Candidates who are good at negotiating make just as much as candidates who are bad at it.
The question then boils down to how much of the variation in negotiated offers can be attributed to variation value as opposed to variation in negotiating skills.
I suspect it's weighted toward the latter. But if you think it's mostly toward the former, then I think it's sensible to claim that negotiation is mostly a good thing.
I think this covers most of it, but it all feels like it's only one side of the supply-demand equation. All else equal, the value to the company doesn't change whether you are one of 100 people with your skill set or one of a gazillion. But the wages certainly will. I think that's totally fair thing, and we can't get it with your model of just value to the company and negotiating skill.
Public sector wages are fixed, but those who are so inclined can generally get a nice (deterministic) salary bump in perpetuity by going to graduate school.
I'm not sure how the tech industry would provide an analogous opportunity to be rewarded better for higher skills, given that many here actually respect you less for having a Masters or PhD.
I agree with the author's one point: The best possible thing you can have is an alternative. I remember reading through the leaked Sony emails where executives were discussing compensation packages for people making millions of dollars. They didn't care much about how much revenue a VP brought in, if they were a nice person, how many hours they worked, but they sure cared a lot about losing them to a competitor. Performance reviews, metrics, titles, etc. were just a pretext to pay whatever the boss decided was necessary to keep them.
FWIW, I think careers where you know your objective value and have a portable skill-set or book of business are the best in terms of employees capturing more of their surplus value. Google's revenue per employee is probably similar to a good trading firm, but no one Google engineer can recreate Search, so they take home much less of their value than a trader would. You see the same thing in sales roles, law partners, etc. where employees and management both know what they bring to the table, and know they could walk out the door to another company if compensation is unfair.
It may have been extenuating circumstances but I do wonder if I would have been happier with less compensation and more room to grow.
That being said, the burden of preventing overcompensation lies on the hiring manager. The candidate should push for as much as possible and the hiring manager should make a judgement call about whether the employee will have room to grow.
Overall cashflow, it was a pay cut. Median/Mode outcome, probably still a pay cut. With extremely high variance, I believe the Mean outcome is probably a break even.
As far as not having room to grow, I can probably sum that up in a single word: Yahoo!
That if you can't come to an agreeable negotiation of salary, you can walk away from offer N because there will be an offer N+1.
Maybe in The Valley or Manhattan or Austin, but in many other places, there is no "N+1". You don't have that implicit position of power with Company N that Company N+1 will give you what you're asking for. Or you don't have time to find N+1 before N-1 becomes untenable (or non-existent).
And yes, I'm talking about developer jobs.
In a way, negotiation is the polar opposite skill as computer programming. As a programmer, what you do is anything but negotiation. You don't negotiate with PHP to get you code running the way you want it to. You tell it exactly what you want it to do, then PHP does exactly that.
Its upto you to decide whether its worth it. But do understand that the choice is in your hands.
Just biting your tongue a bit and not reacting to first financial offer on the spot, taking a break in communication suggesting that you need to consult (your partner, your plans), reject first offer after this consideration can get you far. Plus being enthusiastic about everything but the money (thoughtful and bit distanced (concerned?) about that, until you get the offer you want to finish with, then enthusiastic as well).
Trying to land the projects you want? You're negotiating. Talking the PM into reducing scope to hit a deadline? Negotiating. Angling for a big promotion? Negotiating.
It's not a bad thing, just human nature.
[1] http://haseebq.com/my-ten-rules-for-negotiating-a-job-offer/
That's why it was posted to HACKER news. :P
http://haseebq.com/farewell-app-academy-hello-airbnb-part-i/
Getting a good deal by fraud harms everyone involved.
https://lwn.net/Articles/688451/ https://www.youtube.com/watch?v=H-m2ozX9zO0 http://meetings-archive.debian.net/pub/debian-meetings/2016/...
This came naturally when I became a contractor. Rather than having a salary based on market rates, I was offering the services of my own company that has N value in a B2B deal. It does sound like an abstract point, but it completely changed the conversation at the table.
Most employees are just workers, not stars, and at least among my management environment there is a simple rule: skip negotiators. If he can't tell what he wants, we do not call again. If he said X, we do not negotiate that. Negotiation is about skill and whether he will work here or not, which position and/or responsibilities he will take. Not about salary. It is stupid to constraint employee's living and needs, no matter if these are first- or second-class needs. It is also stupid to not know how much you need.
IBM performed interviews at my college weeks (or more) before anyone else was even hiring. After doing the interview process and getting an offer, they wanted an answer within 2 days. Obviously I told them that this wasn't going to work, and they basically said it was too bad. A few months later, I got a call asking if I was still available (wasn't at this point). Be prepared to walk away in a negative situation like that, it says a lot about the company.
"So what is your current salary, and what are you looking for ?"
What are you supposed to say ? Just stay quiet ? Mutter something about not being able to tell them ?
I'm all for negotiation, but it seems that every situation I find myself in, doesn't really lend itself to the described pattern.
If they push just apologise and say you're not comfortable discussing your salary over the phone.
That is given that that study is the exact fact, but it is indeed mostly a study based on polls which I would say is not exactly hard evidence.