Ask HN: Is there evidence for anchoring in salary negotiations? | Hacker News Reader

Ask HN: Is there evidence for anchoring in salary negotiations?

8 pointskartickv5 comments

When it comes to negotiating pay, two opinions are offered:

- Don't name a salary; let the employer make the first offer, because it may be higher than what you'd have asked for.

- Anchor by naming a high salary, as high as can you say with a straight face given your skills.

Is there quantitative evidence of these when it comes to salary negotiation?

I came across one that says that "I'm looking for $100K, but negotiable" is better than saying "I'll even work for $1 but I'm looking for a fair salary" but I'm not asking about anchoring high vs anchoring low. I'm asking about anchoring vs not being the first to name a price.

Is there any source of information more reliable than some random person's opinion?

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I'm director of engineering (50+ employees)

I'm given a budget and that's my absolute ceiling. If there's a high anchoring I just pass because there's nothing I can do - the budget is the budget.

This works in reverse too. As a candidate, I have bills to pay. If there's low anchoring (people often lowball me, "negotiable") below a certain level, I just pass because I at least have a shot at paying the bills freelancing.

I'd say companies usually have a budget for a given position. If you ask for a salary way higher than the budget they can't match it. If it's a bit higher than the budget and they need your skills I suppose there can be some negotiation from both sides, not necessarily on the salary. If it's way below their budget they would probably think you don't have the experience or are not confident in your abilities. If it's within the budget, there can be a negotiation, but usually you're good. Some companies like to hire as low as possible within the budget. Some companies want the best talent and will pay whatever as long as it ia within the budget.

So in short, you can try anchoring high if you know that will be at least in the ballpark of the budget for that position even if it's at the higher end.

Big companies usually have (from my limited experience) salary ranges per level or title.

This has a few implications-

- Anchoring might work to some degree since the company have some freedom in deciding the salary

- If you cross the upper range one of two things can happen- you will be declined and get (or not) a counter offer, or you'll be bumped to the next job level (engineer to senior etc.) if the company really appreciates you.

- Future salary raises are also bound to the same ranges, this means that if you start at the top you will have lower raises, or more pressure to move to the next level

The strategy should differ based on the role and company, as well as your years of experience and accomplishments. I doubt there's a one size fits all approach.

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