Ten Commandments of Salary Negotiation
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On the other hand, why don't you just tell them the lowest number you'll accept?
> Well, the reason we have to play this game is because, like it or not, everyone else is playing it.
The real reason is it is completely unworkable to require a best offer from one side and not the other side.
Negotiation is central and inevitable to life with more than one person. Negotiating also means giving up things you don't value for things that you do value - making for much better allocation of resources.
Only if you think the power dynamics between the two parties are equal. Or in other words, only if you think that both parties would get the same benefit (or harm) from some sort of mediated negotiation (e.g. both parties share their best offer with a third party who then follows some agreed-upon rule to settle the transaction at some price in the range of mutually-acceptable prices if any exist).
What you're describing (both sides providing a best offer) obviously doesn't work without some sort of agreed-upon method for sharing the offers before knowing the other party's offer and then settling on a price if any mutually-acceptable prices exist.
In reality, even an auction among a large set of workers and employers is unlikely to be have "ideal" outcomes (according to some reasonable definitions, although all definitions would be debatable), particularly when relevant qualities of the two parties are different (like how much information about the market each party has, how risk-averse each party is, etc.).
The power to walk away is all the power necessary. And we have that, at least in non-communist countries.
Sure, there are a lot of applicants banging away hopelessly (because they’re not qualified and those people should not negotiate), but most everyone else in software who can land job offer N can land job offer N+1 without undue difficulty.
IMO, SWEs have never had more “walk away” power since I joined the field about 3 decades years ago.
In an industry that is deadset on focusing on worthless leetcode puzzles as the major gating factor for a hire decision, I struggle to understand how someone "banging away hopelessly" is decidedly unqualified.
The vast number of people changing jobs don't leave one before securing another.
And even if you're unemployed, it doesn't change the negotiating power, just the relative value of your personal choices. Ie job1 vs job2 or job1 vs unemployed.
To blame the lopsided value of the latter on negotiating power is to grossly misunderstand negotiating tactics.
Nobody is starving in America. Jobs are going begging. I needed some work done on the house, and I called the outfit that usually does such things. They are overwhelmed with work, and can't find workers.
Besides there are around 250,000,000 jobs in America. Am I to believe that it is commonplace, or even ever happens, that an individual somehow has managed to find the only job opening in America?
> "Negotiating also means giving up things you don't value for things that you do..."
That describes "compromise", not "negotiation".
In my experience (23 years in software, 5y consulting), in some ways negotiation is more like poker: coming out on top doesn't always mean you had the best hand, just that you played it right. On the other hand, it's not necessarily such a starkly zero-sum game. Of course it is in the sense of absolute #s, ie the less they pay me the more they get to keep -- but by insisting on being well-compensated for your skills and experience, you rule out the wrong workplaces and send the right message. If "I'm expensive, and worth it" isn't how you -- and your employer or clients -- see yourself, you're doing it wrong.
When negotiation for a job, an offer usually includes various benefits in addition to the salary. Such as paid time off, relocation expenses, stock options, etc. Some you may want more than others. So you trade away for the benefits you have little use for in exchange for more salary or other benefits you value more.
A good negotiator can produce a win-win both sides benefit solution by mutual determination of what each side values and does not value - it is not zero sum, just like your garage sale is not zero sum.
Nobody else is going to make sure you're paid what you're worth. Which is much more than median salaries if you have skills.
Some companies definitely operate that way, but as a hiring manager I have a lot of incentives to hire and retain good employees. If I'm constantly low-balling every candidate and squeezing the lowest possible salary out of them, I'm also going to be constantly losing my best people when they realize they're underpaid in 6 months. Then I have to go out and recruit, hire, and re-train someone else.
It depends on the company, of course, but many hiring managers are more than happy to carve out as much compensation as they can get away with for new hires. It improves team morale, decreases team turnover, and gives the hiring manager additional leverage over highly paid employees who know they can't just walk out the door into a higher salary somewhere else.
Unfortunately, most candidates these days have been taught (by guides like this and other internet wisdom) that salary negotiation must be played like an ultra-competitive game where the first move is to always force the company to name their price first. Hiring managers aren't dumb and we do this all the time, so whenever a candidate starts reciting hardball negotiation playbooks I just start with an offer that's 5-10% lower than what I think we'll end up with. The candidate then comes back and demands something 5-10% higher and we settle back at the number I had in mind anyway.
In the odd event that the candidate doesn't negotiate back up after forcing me to go first, I just throw the extra money into the offer anyway. Employees are even happier to see that I've come up on my initial offer, which is a great way to start the relationship.
On the other hand, when some candidates come in demanding multiple months of delays while they collect competing offers and want to go through endless rounds of re-negotiation even after we've agreed on a number, I just cut them loose and wish them luck on their career search. Unless you're a FAANG hiring many people at once, it doesn't make sense to play endless games with candidates who are going to end up at a FAANG anyway.
Candidates can't really reliably know who's pulling the strings.
I’m neither trying to over nor under pay incoming employees. On balance, underpaying slightly seems to have worse effects than overpaying slightly.
Is that actually how it works? If everyone in a group does a good job, or if everyone does a great job, they'll get the same raises either way? Furthermore, if management is convinced that one person did a bad job, then that increases the amount available to the rest? The incentives are fascinating. How many people are in the group to which the raise pool applies?
It's very unusual that an individual performs significantly (three sigma) above or below the team performance, but in the case of that happening, they could be withheld from the main pool or split a side pot.
But not without first either getting the assistance they need to catch up with the team, or teaching the team in their superior methods.
In terms of how concentrated the problem is, the overall pool covers 1000+ people, but we use the same general formula to break it down to cover groups of 15-50. That’s enough that if you have one outlier low, you’re probably okay (including just explaining why you propose granting raises over the pool because of this). But if you strategically “hire low”, your whole group suffers. (Which is another reason to not bias your offers low-leading is hard enough, so don’t start out to do it on hard mode.)
To the “if everyone did a great job” concern. If everyone did a great job, the business does better and the share-based comp becomes more valuable automatically; we would also likely make the raise pool and SBC pool larger because the company was out-performing because everyone did a great job.
My last company, only 2 people in the department could get the highest rating, other people were passed over, including myself. I warned my manager about this, but not surprisingly we lost quite a few good people because the market is good for devs and its really easy to get a solid increase in salary. Especially if you get passed over because corporates are going to corporate.
Obviously it depends on company policy, but they're not going to give raises from money they don't have.
Just as with technical interviews, it’s a perpetual cat and mouse game between employers and the prospective employees. It’s what happens when there’s a power asymmetry, a lot of money on the table, and a lot of prospects. So expect that internet guides will eventually catch on to your tactics and devise counter-strategies of their own, forcing you to come up with new counter-counter-strategies, and so on.
> Unless you're a FAANG hiring many people at once
Yeah, this state of affairs is also caused by an industry dominated by omni-resourced companies as well as a secondary tier of cutthroat former startups such as as Uber.
I have to say, it hardly seems to me like an applicant asking a potential employer to name a figure first is an ultra-competitive hard-core tactic.
May I ask if you're located in California? If so, how do you deal with AB 168, which requires companies to disclose salary ranges upon request?
That's not the way it has worked out for me. When I have made the hiring manager give a number first, the number has been 2x of the number I would have given. Maybe I just undervalue myself. 2x + 5-10% is a pretty good outcome.
Most profitable uncomfortable moments of my life.
E.g. "I’m talking $100K+ more" really? You think I can get $145k when they just offered me $45k and that was a good offer considering living expenses, what others in this role with similar experience get paid, well above national median income, more than what my higher-educated spouse was offered, etc.? In what world is 100k more realistic?
If "I helped her get $5.4M more on her offer" does not sound like this might apply to you, this is where you can safely stop reading. Also, who needs $5.4M per year extra? It might be unfair not to get it for the same work, but either way: if that was in reach for most mortals, we'd all work one year and retire with literal boatloads of money to spare. At $5M/year (total, not extra), you need to work 2.4 months until you can safely withdraw 40 grand a year just from the interest. Work the remainder of that third month and you can buy a private helicopter in cash. This kind of negotiation advice is just not relevant to anyone here, bit disappointed in the article...
I'm not saying that's a bad thing. I'm just saying there's little shelter along the lines you describe for a well-paid engineer at $BIGCO.
Regular engineers at FAANG companies don't get anywhere near enough stock granted to them to pull this off. It would be legal too, they just don't have enough shares to convince Wall Street to let them.
Ah yes, my favorite: any advice must apply to everyone on the planet - after reading this Paraguayan field workers are starting to polish their resumes on LinkedIn
I hear this a lot, but always wonder why? You where happy with 14, got 15, so why feel like an idiot? If all you care about is the highest maximal rate, you will be job hopping forever, getting better at negotiations but will it make you feel less like an idiot?
EDIT: I never cared for how much my fellow employees made. I know what I "need" and when I accept a certain rate, I can only be proud of being able to bring home what I make.
Life is too short to fight for every penny.
Including bargaining too hard.
You said: life is too short to forgo being able to own a home or raise kids
Why would you think someone would be happy with their salary if they wanted to own a home & have kids, if that salary didn't let them?
Implicit in the caveat if you're happy are all of those the goals predicated on having a salary at a specific level.
If the salary won't let you afford a home & kids, you're not going to be happy with it. So you don't take it.
I think the clear implication is that if someone didn't realize that a small amount of negotiation on their part could have made the difference between being able to buy a home or not, they might regret not having negotiated when they do realize it, regardless of how happy they were in the past with their salary.
Your interpretation is essentially "if you are as happy as you could possibly be, and a higher salary couldn't possibly make you any happier, then don't negotiate," which is logically valid but fairly unrealistic.
Edit-aka “mindfulness”
At large FAANG companies, I've seen candidates leave $100k+ on the table, as they simply accepted the first offer (on-hire stock awards and signing bonuses).
On the other hand, I've seen candidates spend weeks negotiating over some trivial point and spoil their relationship(s) before they even started the job.
Knowing the range for the role you're applying for (via Blind, or Levels.fyi, or similar) makes this process so much easier.
I once referred an acquaintance I knew was underpaid to a job on my team, with explicit instructions to negotiate their initial offer. They did not, and I was quite disappointed.
> It is Bob’s job to get you signed with the company as cheaply as possible, but Bob is not super motivated to do so, because Bob is not spending Bob’s money to hire you. Bob is spending Bob’s budget. Bob generally does not get large performance incentives for shaving money off of his hiring budget: you get a new Macbook if you convince Bob to give you $5k extra, but Bob gets (if he is anomalously lucky) a dinner at TGIFridays if he convinces you to take $5k less.
I've a few data points on this, and disagree. Hiring Managers (and their managers) have to approve and signoff on things, and VPs are needed for major deviations from the norm. Yes, the HR team can do many things but it's all done in conjunction with the hiring manager.
I distinctly recall talking with one of my GM's one day about a new start. The discussion was, "I'm excited for $person to start, but I'm really worried (s)he's a player of games. The negotiation process was non-stop angle-shooting, and please keep an eye open for actual work vs politics."
I agree with the above poster which is, if you’re happy, take it. The great part about America and especially developed, if you become unhappy there’s 100 other jobs waiting.
Unless you were a colossal ass about the negotiations, I’d not pull an offer while we’re negotiating; we may not find a zone of agreement, but you’re not going to hurt yourself by negotiating in good faith for your interests.
* Legally, the accepted offer may still have been valid if the candidate wanted to force that issue. They’d have to be fairly crazy to do that, though.
In 2020 I had two offers pulled after I had accepted them. That's without me coming back to ask for more or anything else. We were well past that stage: An offer was agreed and accepted.
So far as I can tell, neither pulled offer was caused by pandemic issues. They were both from companies doing ok.
The second time, having been burned earlier in the year, my acceptance was as clear and formal (without being rude) as I could in writing (by email), CC'ing the recruiters to be sure everyone knew.
At the point of acceptance I declined other offers, terminated other interviews in progress and negotiated the end date to a current contract.
That offer was pulled about 2 weeks after the acceptance. A strange ghosting in the interim, when I was expecting a new-employee pack in the post, caused me a creeping feeling of paranoia. It felt off, but I also felt like it must be my imagination, as we had completed and I had an official start date. I was looking forward to starting, and I wanted to feel relaxed about it.
It worked out well for me in the end, as I ended up at a much better place with a much better job, a few months later. But it was stressful both times it happened, and caused significant hardship.
In the time between acceptance and "we're closing the role", the recruiters reassured me the company was just being slow. Then when the offer was pulled, the recruiters told me they didn't understand what had happened, and would talk to the company and "sort it" - and then did nothing and ghosted me. At the time I felt they were good recruiters, "would use again", but obviously I don't think that since they ghosted. I guess they had nothing to say and needed the ongoing business with that company. But an apology, commiseration, or just telling me how unusual it is would have been welcome. These are people who had reached out to me initially, kept in touch regularly throughout the process, and done a great job helping with the application. Nope: Blanked.
I was never given a reason other than "we don't have to give a reason if it's due to change of business circumstances". I suspect high levels of BS.
Something I found really striking: The HR person giving me the bad news told me it was "their standard practice" for an executive to review job offers after they had been accepted.
My view is legally I was entitled to the signup bonus and notice-period pay because we had formed a contract by exchanging offer and acceptance. I suspect I could have sued and won, but that would have been onerous, not an easy win. I worked through several legal theories to formulate a solid claim, but in the end I wasn't up to pursuing it, and needed to focus on the remainder of the contract I still had in the hand.
Life is too short to subscribe to company loyalty.
Today, after a lot of negotiation, we've agreed that I'll be brought on as a contractor for 3 months at $200/hr.
The difference between those two outcomes is nontrivial. By paying myself through an S corporation, and then distributing out 40% of the income as tax-free dividends, I'll be further magnifying this opportunity.
In my opinion, I wasted too much of my life not doing this. And all it took was playing a little hardball and being willing to walk away.
(For curious readers, my secret superpower was that I already had a banking job I was happy with. Sure, this was my dream job, but from a game theory POV that really doesn't matter. What matters is whether you're spending your days doing something you want. Are you sure you want to make small, lateral movements?)
Part of the reason this is hard to discuss is because I truly never believed that opportunities like this were ever going to be available to someone like me. The choice between a $200k/yr salary and a $200/hr contract is so far of an outlier that you read it on HN and just roll your eyes. Right?
Or at least, I did. For years. And then one day I woke up and realized I should've had kids about 8 years ago. It's a lot harder at 33. It means that by the time they're 18, you'll be so old they can barely relate to you. I try not to think about it too much or I'll get a bit sad.
The real motive was that IVF costs $40k in America. $40k! Forty fucking thousand dollars to have a baby.
That really lit a fire under my ass. I looked at it from the point of view of "Okay, my wife's salary pays the bills. I've heard of people making $40k. It's a thing that happens. How can I make $40k?"
It's more tractable than it seems. But it requires you to be "selfless" in a certain sense: it's so tempting to take a cool programming job that you really enjoy. It was almost physically painful to decline their original offer. It was like, which would you rather do? Banking, or ML? Hell yes I'd rather do ML. Give me that ML!
... Except the salary would be the same. And unlike banking, where everyone is pretty chill (we're all here for the people and the money), ML is often on a time crunch that reminds me of gamedev. Which means I'd be trading a relaxing job for a stressful job, with no compensation other than "being happy with the salary and the work."
Why? Why do that, when you don't need to? All you have to do is say no and shop around. But us programmers rarely seem to do it.
By the way, if the amount of money here seems enormous, it turns out to be roughly standard salary for a Google ML engineer. That was my baseline: step one was to ask a buddy at Google "How much would you get paid for this?" and step two was to refuse offers less than that.
Google pays RSUs, which startups can't offer. But they can pay you equivalent amounts of cash. Think of it like selling your stock today rather than waiting for it to vest: I won't be receiving stock, so I won't have the chance to become a millionaire, but I will be having a reliable stream of "holy crap, my bank account isn't negative for the first time in a decade" amounts of money.
Honestly I think there's something wrong with me, because I can't even talk about this without feeling incredibly guilty. I know (too well) how much people struggle just to make end's meet. And I know how many programmers struggle too. I was one of them. Here I am, making it sound easy.
... but what do you do when it actually is easy? All it requires is for you to focus on it for a year or so. I am incredibly lucky, but I also know how to exploit opportunities that fall in my lap. I encourage you to do the same, dear reader; the diff between me and you isn't as big as you'd think.
I'll console myself that this comment will be buried nice and far down the site, and that the story is falling off anyway. (For some reason, audiences are starting to scare me.) But I did want to encourage some lone reader to stop and think. Are you sure you're not inventing reasons why you can't do this?
If you decided to buy a car for $100k over the course of a year, you'd probably wince. Yet I didn't realize I was doing the same thing. Turns out, you have to focus on making money if you want to make a lot of money.
Without more detail, it's hard to say if it's an outlier or not. $200k is $96/hr, but the employer pays their half of SS. Self-employed, you're paying both. And how many hours are they giving you in a week? What if they cancel arrangement 3 months in, and it takes you 6 months to find another contracting gig? You would've made more at the $200k job in that event. But with so many different dimensions (job security, hours, taxes), it's a bit comparing apples to oranges.
One nice thing is that it's an evaluation on both sides. If they cancel, it's a mutual benefit, because I wouldn't want to be in a situation where someone was unhappy with my services. But the reverse is true: having the option of noping out after three months is underrated. All signs point to "this is an awesome company and I'll be here for many years," but eliminating the uncertainty is no small benefit.
One other interesting aspect is that when you bill daily, you can do two gigs at once. It's impossible to have two salaried jobs, but having two contracts is entirely feasible, as long as you can do the work. So that was another tempting thing that tipped the scale. Taking a salary job generally means you'll need to either backburner your existing contracts or call them off entirely, since full time job + contracts is a recipe for not having a life outside of work.
COVID made some of these things easier, too, so it may be a recent phenomenon. Getting the sweet jobs used to require a commitment to e.g. San Francisco. That may be true in 5 years, but circa 2021 I can do this in my pajamas from lovely Lake St Louis middle-of-nowhereville. (Our aunt is coming to visit us on Monday, and she's bringing her cat -- I'm super hyped to see both of them again. Stuff like that is normally a nonstarter when your aunt would otherwise have to fly across the country to come see you.)
It could all be a terrible idea. It'll be interesting to revisit this in a year. But it's also exciting to try out a new path. Hopefully it won't be the wrong sort of exciting. :)
(Sure, if you bill 2000 hours/yr, they’re different amounts of money, but most consultants aren’t billing 2000 hours/yr.)
Being able to squirrel away a substantial multiple of the 401(k) limit is a huge benefit, though!
It's a lot harder after 40, but 33? That's still a pretty prime age. The vast majority of people who I know with kids started in their early 30s.
> The real motive was that IVF costs $40k in America. $40k! Forty fucking thousand dollars to have a baby.
While your hourly rate as a contractor is decent, it's worth nothing that quite a few companies (including YC startups/unicorns) provide IVF with health coverage benefits.
I have had many years where my stock-based compensation and medical costs covered by insurance combined exceeded $100k/yr.
I only mention this because the path you highlighted may mean success to you, but the alternate path may be a greater success for others.
You’re absolutely right that benefits are a huge consideration for almost everybody. I guess I happened to win the lottery, as my wife’s health insurance covers both of us, so I’m starting to question whether it was even worth sharing.
She carried me for about 5 years while I recovered and found my footing again, so I’m just happy to repay her with a nice vacation. She’s been dreaming of going to the Seychelles for about that long.
I dunno. It’s also counting chickens, as they say. If it works out, I’ll just try to pay it forward however I can. If not, we’ll still be happy. Was just hoping to convince some outliers that there’s a different road ahead; one I never gave much thought to.
You’re also correct that I’ll be pushing 40 soon enough. She and I joke that we’ll both find a role for ourselves at a big bank somewhere when we’re 70, so that we have impressive titles but no one is quite sure what we do. That way I can work on lisp while occasionally writing legacy banking software, and she’ll be tinkering with React (which by then may as well be in a museum).
Your experience isn't typical, at least for women
> The average age of first-time mothers in America is now up from 21 to 26, while for fathers, it’s increased from 27 to 31. This isn’t just within America; women in other developed countries are waiting too with the average first birth happening for new mothers at age 31. [1]
Also curious, where are you getting your info that 33 is a "prime" age for having children?
> A woman’s peak reproductive years are between the late teens and late 20s. By age 30, fertility (the ability to get pregnant) starts to decline. This decline becomes more rapid once you reach your mid-30s. By 45, fertility has declined so much that getting pregnant naturally is unlikely for most women.
> Down syndrome (trisomy 21) is the most common chromosome problem that occurs with later childbearing. The risk of having a pregnancy affected by Down syndrome is
> 1 in 1,480 at age 20
> 1 in 940 at age 30
> 1 in 353 at age 35
> 1 in 85 at age 40
> 1 in 35 at age 45 [2]
If people want to have children late in life then they should go for it, but it's a disservice to readers to pretend that 30-35 is the same as teens-twenties. Not everybody has access to education on reproductive health and discussions like these are an important way for some people to learn.
~~~~
1: https://www.forbes.com/sites/ashleystahl/2020/05/01/new-stud...
2: https://www.acog.org/womens-health/faqs/having-a-baby-after-...
Better to go into it with both eyes open though.
Another option someone floated was to use Adopt International. It was somehow the only non-horror story I’ve ever heard about adoption. Everything else is “I’d do it again, but it wouldn’t be pleasant” type stories. So maybe we’ll import a baby from some shady back alley in China or something, who knows.
It’s so unfair that when you finally get your life in order, it’s already bordering on too late. Gah. Ce’st la vie, or however it’s spelled.
Anyway, thanks!
As to the rest of your question, if you found my stats helpful, then you're welcome. I hope you didn't take it as an attack as, frankly, my comment wasn't even directed at you (another reason I found your response off-putting). It is unfair, but one thing I've tried to do is just keep looking forward and making the most of my time rather than looking back. As a software engineer who grew up poor and can now afford to pursue hobbies like extreme sports, it's too late for me spend my summer breaks in grade school snowboarding or mountain biking. But I focus on the fact that at least I can do it now, whereas many people may never be able to have the luxury. We can't change the past, but we can change the outlook we have on life.
Maybe it'd be better if people spent 5 more years working, until they were say 70, instead of retiring at 65.
And could instead take some years off in their late 20's and have kids. (Men too, although for them it's not biologically important in the same way)
Any tips on how you convinced a company that wanted to hire you as an employee to accept you as a contractor?
I did solo consulting for a few years (Silicon Valley) but while everyone was wanting to hire me as an employee (fairly specialized and in-demand skills), approximately nobody was even slightly interested in taking me on as a part-time contractor. Finding companies willing to do that was so difficult I eventually gave up and took a W2 job and here I am.
Two factors helped. One, the CEO wanted me so badly that they put me through an “accelerated interview” process that consisted of no technical questions. (I was asked to design a security system for a hypothetical billionaire, and then to think of as many creative uses of a soda can as possible with a 3 minute timer counting down.)
The other factor is that a $50M contract is at stake. I do think they can land it, and I have a pretty clear idea of how to get them there. It also helped that I happened to be chatting with their client about an unrelated thing right when the CEO happened to first talk to me. He said “small world” and was like tell him so-and-so says hello.
Honesty I’ve started to conclude that perhaps it wasn’t useful to use me as a model for others. Everyone’s path is different. I think I’ll write this up into a Book Of Crazy Stories instead of saying it’s advice.
As Picard once said, “It’s possible to do nothing wrong and still lose. That’s not a failing; that’s life.”
Some better advice for you is probably “have a job you’re totally happy with, and then look.” They could tell that I would walk away, which was a source of strength during negotiations. (I needed it, too.) Maybe it’s a bit like getting an investor; the best way to get it is not to need it.
Also, look around a lot! I can’t underscore it enough that most people simply don’t put in the time to go look. They often feel guilty (employer loyalty) or that the interview process is too much of a pain (totally understandable).
Perhaps the closest thing to a recipe is, look into this stuff as a side hobby; fly through the interview as a challenge to yourself; after impressing everybody, walk away and see what they’ll do to get you back. Now that I’ve written that out, it suddenly feels a lot more tractable. A dedicated person could do this a few times, repeatably.
> Why are you even working if not money?
And therein lies the conundrum.
edit: I never even touched on factors like productivity and its main explanation factors: intelligence and hard work. If I have more intelligence, and I work ultra hard, I should be paid more than you. That's why compensation is mega hetoroscedastic: that is why we have bands and why the bands are so wide and there are outliers. What made me also cringe is the people who are clearly not the "cream of cream" negotiate and get to such places: if the "process" did not exist and they were just interviewed technically for 5-6 rounds they would have flopped and the company would save itself some troubles. My 2 cents.
> they don't even know what zero-mq is
Why does it matter that they've never heard of a specific library? If they're working in a domain which requires something like that, most companies at that scale will either be using it or a similar home-grown alternative, which they'll be familiar with. If they aren't, then what does it matter?
> you only get 1/4 of by definition
Not totally clear what that's supposed to mean but in any case Google & Facebook (along with an increasing number of other tech companies) no longer have a 1-year cliff - your equity starts vesting immediately on a monthly basis after you join; it's significantly de-risked.
> if the "process" did not exist and they were just interviewed technically for 5-6 rounds they would have flopped
What exactly do you think the interview process at these companies is, if not multiple rounds of technical interviews?
If you're a top student from a top school, you have almost all doors open. Your on-campus recruitment will probably consist of top firms from sectors like tech, consulting, finance, law, etc. And they want you. So why shouldn't you aim for maximizing your compensation?
But I get what you're saying - often times when you see discussions around these jobs, it seems like 90% of the talk revolves around total comp, nothing more.
Yes, but consider taxes on your current total compensation (less 401k contributions, HSA, and Cafeteria plans (e.g., dental)) versus offers you receive. Stock and bonuses are W2 income and taxed at your marginal rate. They aren't special. They may withhold more, but once you file, it's marginal.
If you click on the link of that text, their point is that stock is not always W2 income.
For example, if someone joins a startup, pre-exercises and files an 83b, that gives a vastly different tax outcome than RSUs at BigPublicTechCo. Conversely, if someone joins a startup and does not exercise their options, then wants to quit after the stock has gone up 10x but isn't liquid, they will have to pay a hefty AMT when they exercise.
Many people aren't aware of startup stock tax implications, and they should learn more about it (i.e. click the link in the article).
Very good advice if you live in the US, unfortunately this doesn't work in Europe if you expect to get US-level of compensation. Not being forthcoming with your expectation is a total waste of time when 99.9% of people don't have or aren't willing to give you the money that you want.
Of course, tell that to your prospective employer, not to the recruiter. In fact, try to avoid recruiters altogether. Although I did happen to get the sporadic good lead through a recruiter, most e-mails from recruiters go straight to spam.
Saying your expectations up front comes with the usual disadvantages, but in the EU you simply have to do it otherwise you waste all your time with employers that end up low balling you. Statistically speaking salaries in the EU are terrible compared to US, but there are the 0.1% outliers, so stop wasting time with prospective employers who don't value you. You have to filter them up front.
Of course, all of the above is assuming that you are in the top 0.1% of the market, and it's your job to be able to prove that you are.
He was a good guy, wrote good code, was fun to work with. But at the same time, his FIRE status was front and center every time it came to task assignment and other issues. His manager was always afraid to give him un-fun tasks or push back when he was behind schedule for fear he'd quit. Not a great dynamic for the rest of the team who didn't have as much leverage and therefore received a disproportionate amount of the un-fun work.
If a candidate came to me suggesting that they didn't need this job but they only wanted to work if it was fun, I'd honestly have to proceed very cautiously. The last thing I want to do is hire a candidate who opens with an indirect threat that they're going to leave the second the job isn't fun any more. We have one of the better team environments, but I can't guarantee that work will always be fun and never require some hard weeks or months to get things done.
I'd personally not mention it. It's not only irrelevant to the hiring discussion, but it's a weird warning shot to your future manager before you're even hired.
I always thought that was kind of interesting, that being overqualified for a Walmart job might make it harder to just get a Walmart job. (I briefly considered it in a pinch but decided to drive for Uber instead.)
I think maybe his manager misplayed and could have approached this from a different perspective. "Ah, I have someone who I can keep at the same pay who is willing to work for the hell of it." Or something like that. Definitely feels like that's the kind of thing you could negotiate with an employee who's joining just for the work and not for the money.
I hit my FIRE number about a year and a half before leaving my last corporate gig, and have a BATNA (Best Alternative To Negotiated Agreement) of, basically, "fuck you, fire me" meant I went into my last couple of salary/role/location negotations with enough excess confidence that I was always able to press for what I wanted (within reason), presumably because everyone opposite me could tell they didn't have a lot of wiggle room.
It only works until it doesn't, though -- I left that job when they closed my office out from underneath me and straight-up relocated my role elsewhere. They asked me to move with it, and I said "no thanks". Obviously they called my bluff (I was being totally unreasonable, to be clear), and...now I'm self-employed.
On the upside, I did mention that I'd already hit that FIRE number, so...
Really helps contextualize how easily many of us throw around the term "senior" engineer.
BTW - The correct response to a counter-offer is "Retroactive to when?"
Regardless of the answer, the end-state is "no" because once they think that you'll leave, they're looking for a way to replace you.
I took a negotiation class last year, and it was pretty eye-opening. One of the things we discussed is how not every negotiation is an adversarial one. In fact, most negotiations are cooperative! In most cases, neither person wants the other to walk away.
Let me put it this way: I'm a hiring manager. I want to hire you. You want to accept the job [for the right amount of money]. We have a mutual goal. It doesn't have to be power plays from either side.
Look, it's not my money. What do I care if you make an extra 10K or 20K or get a sign-on bonus or not? It's not a zero-sum game for me. I don't make less money because you make more money; I'm hiring you to solve a problem I have. If giving you an extra 10K is what I need to do to get your brain into my codebase to produce code, then BY ALL MEANS, HAVE AN EXTRA 10K.
(Yes, yes, my department does have a budget, and while there's usually a little wiggle room around salary ranges, I can't just pay you a bajillion dollars. But in my experience in Silicon Valley, there's almost always a will to hire great candidates, and if my budget is $200K and it takes $210K to get you in the door, I've yet to be told no.)
TL;DR: this advice is decent, but at the end of the day, the simplest thing to do is just say, "That's a great offer, and for an additional 10K, I'll sign right now." Nine times outta ten that'll work.
[1] https://www.kalzumeus.com/2012/01/23/salary-negotiation/
I say that every study I have read shows that basing a job offer on past salary is one of the most important ways employers -- unwittingly perhaps-- perpetuate unequal pay for women and other protected groups. Ask the employer or recruiter: Do you want your process to perpetuate unequal pay?
They can't say yes to that. And it makes them feel bad for asking. If you don't do something like this they will often make you feel unreasonable for not sharing your salary history.
After internal stakeholders have agreed that new hires are needed, a salary range is agreed upon verbally or in email by the CEO/CFO and the person asking for the new hire (lets call them the hiring manager). Experienced hiring managers will probe for things they can offer that are non-cash compensation, like stock and benefits. Accounting/finance is then roped in to make sure everything being offered is sane, and we're just hoping they don't scare the CEO by telling them we're 25% above plan for new hires (this happens a lot).
You end up with something like "Front-end Programmer $120-140k", and finance updates their models to include the new hires so that execs can see the impact to cash burn. Chances are high that many other roles are open at the same time, because doing this ad-hoc is a PITA.
This can take a few days to a few weeks depending on the maturity of the team, and the end-result is some job requirements that get posted on the company website and used to push out to recruiters or personal networks. At this point the CEO is already updating org charts and thinking about how to communicate the new hires in the next board meeting deck, and how to market the work the new hires will be contributing to.
Why is this all important? Because this is the weight of the work you're pushing against when your salary negotiation goes above the high-end of the range.
You see, if your salary is within range then no extra work is needed by the hiring manager or company to make things work. Better yet, if you come in at the lower-end of the range then the company has saved money! Big win, since it always feel like cash burn is faster than expected. Maybe the "extra" cash is added to the remaining new hires pool, or better yet returned to the company for other uses
But if you're above the high-end, the hiring manager has to go back to the business and "fight" to get approval. The CEO has already approved the updated financial model, which the team spent a week or more updating with furious back-and-forth and long nights. So when the hiring manager broaches the subject of needing an extra $X to make this new hire work, a dance begins with internal stakeholders that have already spent weeks on already-agreed-upon numbers. Going through the process of updating all of this can seem daunting.
An inexperienced hiring manager may not know how to tackle this situation, so rather than deal with defending the extra money will just pass on the candidate. Maybe the candidate is a close friend or former colleague, so even an inexperienced hiring manager will figure out how to make a "plea" even if communicated poorly.
Experienced hiring managers will have a few tricks, such as communicating the benefits of the extra cost in a way that appeals to management. Really context-dependent. I've even seen some offers doubled, because the candidate was so appealing and the hiring manager so good at marketing their contributions.
Now here is the hard part - how do you, the candidate, know what the upper range is so that you can ask for it without telling them your prior salary which may anchor you to the lower-end? This is why you want the company to make the first offer, because then you know a bit more about the range. They offer $120k, so you know you can probably safely go to $130k without much trouble and $140k with a little effort. $150k? Well, now the hiring manager needs to begin to negotiate.
There may also be a recruiter in the picture, which doesn't change the internal negotiation dynamics but does make the experience "lighter" for the hiring manager and candidate because there's less face-to-face emotional turmoil.
My advice? Keep in mind the importance of the range, and that you're asking the hiring manager AND other people in the company do more work to accommodate your ask. Don't expect your hiring manager to know how to navigate this process, and be prepared to help them make the case that you're worth it.
If you hire 1 in 15 employees for significantly more salary than the other 14, it makes almost no difference for budgeting, forecasting, burn rate, etc.
If every employee costs you $250k/yr, and you have 15 employees and no other costs, your burn rate is $3.75MM/yr. If you have $25MM in the bank, you have 6.66 years of runway. If you pay a single employee $50k/yr more, then that's 6.57 years of runway. If you pay them twice as much ($500k) that's 6.25 years.
The larger the company, the easier this becomes as so few people actually negotiate higher salaries, or are important enough to warrant dramatically larger salaries, that it becomes a rounding error.
Model, projections, salary bands -- and of course rules -- were all made to be broken.
I've run P&L (and hiring) for a long time, so far from just theory. It absolutely makes a huge difference. Salary is easily the largest expense for a vast majority of businesses, and especially for fast growing start-ups it can quickly get out of hand. If a company lives long enough, it will eventually have a lay-off or some sort staff reduction event like post-acquisition bleeding. It's a right of passage.
> If you pay a single employee $50k/yr more
Except it's not just one employee, especially in the growth stage. You end up with a situation where you have 10-15 new open hires, and over the course of a few months you fill them and several of them end up going over budget, because the needs of hiring outweigh financial sense in the thick of getting things done. Each decision was made individually and in the throes of running a company, so what seemed fine as 1-off decisions quickly aggregate into a problem.
So then you do your next budget review and compare to plan, and you're suddenly 15% above plan. You were supposed to add $1M in payroll to SG&A, but the latest sheets show it at $1.25M. Keep in mind you're a start-up, so revenues are not stable and if you're Series C may be operating under the assumption that no new cash is ever going to come in.
> then that's 6.57 years of runway
No start-up is operating with 6 years of cash to burn, and certainly no early-stage companies where investors are putting pressure on you to spend to grow. Nice thought, though.
> the larger the company, the easier this becomes as so few people actually negotiate higher salaries
Larger companies have more flexibility, but even more strict budgeting. The flexibility is because of the float on min/max of salary bands, which when combined gives HR a lot of room to customize packages. But overall, most companies still tightly manage payroll and headcount expenses because it can literally break the bank.
Sure, many aren't, but when VCs are throwing dozens of millions of dollars at you and your only operating expense is employees, it's not hard to have a 5-15 year runway where the only bottleneck in growth is hiring.
I know three Series A corps with a 10+ year runway that have shown up on HN, and they all pay comically well for startups.
The CEOs I know and respect cut cheques for whatever they need to get the job done.
Outliers, by definition, are generally not a good example of a population. Investors are not interested in you sitting on their money, and they will push you to spend faster. There are always outliers, but the average/median time between fundraising rounds for most start-ups is 18-20 months with average/median Series A raise of $10M/$20M.
> for whatever they need to get the job done.
Spending money is a gamble, you have no idea if what you're spending it on is going to work. Most start-ups - and businesses in general - fail. Even the ones where the CEO spent the money to get the job done.
And if somehow a founding team has managed to turn a Series A into 10+ years of runway, it's either because burn was low or they found a profitable business model and stopped being a start-up. My gut tells me most fall into the later category.
They will always low ball, so you know what they think of your skillset and you can negotiate upward if they really want you. If you open you have nowhere to go but down.
Uh...that's literally the first one though?
> Do not — I repeat, do not — give them a number.
> What to do instead: Ask for the range they’re budgeted for the role.
opening with a high but not unthinkable number is way more likely to maximize your comp than playing games and refusing to give a number. the worst case is they deem you not worth it and stop the process but if you are confident in your worth that is a good outcome for you
However, if you're in a market where most companies will offer less than half your current compensation while still thinking they're paying well, and potentially be right about it when compared to many other companies on the market, I am not sure what the best strategy is.
You need to filter out the companies that are a no-go from the beginning, and you need to do so early, because the amount of time and energy you can invest in the job search is finite. Giving a (vague, higher-than-current-salary) number that you're looking for seems to be the only way to do so. Of course, this puts you in a terrible position once you do find one of the few companies actually willing to pay comparably.
“I’m looking for a total comp number that starts with an X or an X+1” is the way I generally approach it.
That works at many tech companies where the range is well known for a specific position.
But, there are thousands of tech jobs at non tech companies too. The ranges aren't well known. Titles may mean completely different things at different companies,etc.
So the advice to get good intel is key. Company specific intel, like what titles exist, how they compare to each other, ranges (if possible), etc.
I suppose it's also possible to ask, after an offer is made, where it is in the range, though that may not get a clear answer either.