Negotiating a Job Offer with a Company
blog.interviewstreet.com
blog.interviewstreet.com
Don't tell people your current salary unless you know it's going to help you, and be wary of taking negotiating advice from anyone who thinks you should disclose it as a matter of course.
Your current salary has nothing to do with how much you are worth to a new employer.
My father is a real estate agent, and real estate agents have demonstrable blind spots (seriously, academic literature exists on this) for negotiation when negotiating for clients versus when selling their own homes. When they're selling their own home, five hours of extra work might add $5,000 to the sales price, so of course they go the extra mile. When they're selling a client's home, five hours of extra work might add $5,000 to the sales price but their commission check only goes up by $300, so they'll generally opt to tell you "That's a really fair offer. You should take it. Can we close this today? I have a young couple who I'd really like to meet with now about buying a brownstone, and the expected value of my time with them is way higher than the marginal value of my time with you. Oh whoops did I just say that out loud?"
This is not an endorsement of other portions of the book as a whole.
We can safely assume that you're conscientious and that you go out of your way to defend the interests of candidates. Then we can move on to telling developers how to deal with normal recruiters.
This particular debate, just remember, is about whether you should disclose your current salary to a recruiter or prospective employee. The answer is: you simply should not do that, full stop. If you disagree, it would be helpful if you disagreed directly and provided evidence for your view; that would be more constructive than centering the discussion on your own professionalism and ethics, which nobody wants to call into question.
Fortunately I am not just one out of tens of thousands of recruiters. I've been in this game for three years, prior to which I was on the other side of the fence managing a team of 8 people, regularly interviewing potential employees and entering negotiation battles as an employer with a strict budget.
Of course when you run into a company who feels they should pay you according to what you made in your previous job, they'll think the two are within 10% or so of each other. I think it's fair to never name how much you make now, but being the first to say a number isn't always a bad thing, I think, especially in today's market (and assuming that one has a good insight into one's market value).
Obviously, you can negotiate yourself back from that horrible starting position --- but devs are such terrible negotiators in general, why on earth would one advocate for anything that makes negotiation harder?
I told my personally retained recruiter my previous salary, under promise of confidence, only to hear it quoted back to me by the hiring manager. I watched the same thing happen on the other side when I sat on a hiring committee. Why would anyone believe him? Divulging your current salary is basically asking for that plus 5%.
Giving a recruiter your current salary allows them to be choosy about where they send you. It may keep you away from lower-paid opportunities, but also might keep you away from more senior roles.
Not generally a fan of recruiters at all, really. If you code and you're good, you'll do better on your own.
I also found out that they called other companies i had been in contact with for other jobs, without going through the agent, to get and share information about me with/from them. This was what raised my suspicion to the agency first and made me test the salary question. Didn't take the job they delegated in the end, but for other reasons.
I'm not advising against agencies, they can be useful and land you a good job but don't think for one second that they are your friend. They are there to extract as much information as possible from you. Don't tell them anything that might put you in a bad position for the job and your salary.
A good way to even it out would be to reply with "Well I dunno, why don't you tell me what the company's desired salary is, and I'll tell you if it's outrageous?". After all, if the only reason they want to know is to prevent you sounding stupid, they'd tell you that, right? :P
PS: Now, this can change if you have been looking for a while and really need a job, but there is little reason to start low balling yourself.
The author of this post, as a recruiter, is incentivized to get you to disclose your salary (see the excellent post by patio11 above). It is still never to your advantage to do so, unless you are grossly overpaid.
The point about not signing NDAs/IPAs is good, and you may be able to negotiate these (I negotiated away the most onerous part of the IPA at my current job by simply lining through the offensive part and initialing, but you may not be that lucky.)
The general advice for any negotiation is still "he who says a number first loses" and you should still go into it with that mindset, regardless of who you're talking to (a recruiter, a hiring manager, HR, whatever.)
Your past salaries have nothing to do with what you will cost the new employer, and software people absolutely have to learn this if we ever want each other to be able to negotiate effectively and raise the salary floor.
Right now I'm working as a consultant with a team that keeps trying to convince me to consider coming in-house; up until recently, moving wasn't an option for family reasons, but now, it's become more realistic. It's a great team that I really enjoy working with, and I'm sure that the offer would be more than fair (my current consulting rate implies a pretty tight range for an offer, one that's in line with what they pay their engineers currently), but unfortunately, they are a subsidiary of BigCorp, and I know for a fact that BigCorp places some restrictions on outside projects, and that makes me nervous - having had to aggressively edit my consulting contract so that it was reasonable (to be fair, they accepted those edits without undue drama), I'm all but sure that their employment contracts are going to be very restrictive, and likely include full IP transfer clauses, not to mention long term non-competes and NDAs. State of California, if it matters.
Is it a complete pipe dream to hope that I might be able to get them to strike some of those restrictions, or will some big companies play ball on those matters? Non-compete clauses that terminate after a reasonable period I can (reluctantly) accept, but losing the ability to do open source work and/or my own projects would be too much for me, I'd rather just keep on keeping on as a consultant...
A job offer is the whole packages things they give you (salary, benefit-in-kind) and things you give them/have to do (come into work every day, do what you're told in work, and any NDA/IP enforcement/non-compete). If one part of the package (non-compete) is something you don't like then you can and should ask them about changing it.
If they are accepting you working for them with no IP things in your contracter contract, then it's not impossible to imagine them accepting an employment contract with it. If they want to hire you then they might be more motivated. Likewise since you edited the contractor contract, you have already successfully raised the issue of outside work with them.
Generally, a smaller company is more willing to negotiate these terms, since the person doing the hiring is likely to be closer to the person who came up with the contract.
I've refused to sign contracts because of draconian IP clauses. I always make sure the contract limits the scope of IP ownership to work done at the request of the employer. This is especially important for me since I've worked at home for years, so there's no clear demarcation between work/personal hours and equipment.
There is a shortage of IT talent. Ergo you are in a strong bargaining position.
Agreed. This is something that is essential to consider. With stackoverflow karma, github check-ins & the like becoming a way to evaluate your expertise, this is something that should be considered carefully.
People may not want (or have the authority) to change the deal, but if they are offended by you asking you do not want to work with them. It implies they are looking for a drone, not a real human being.
I've worked in several local government jobs in the UK, where budget (and 'Single Status payscale') constraints mean that the hiring manager normally doesn't have the authority to change the salary offered. Just asking the question has still given me an invaluable insight into the manager's way of thinking.
Unless you really, really want to work at $BIG_COMPANY, and you could only get an internship with them, or you are only looking for something for 3ish months. If you are looking for 'experience' and you have a year, get a paying job.
In almost all cases, the original offer is still on the table. "Negotiating with the decisionmaker will cost me this offer, so don't negotiate" is something which is only really believed by engineers who are -- and I say this with love -- abominably incompetent at negotiation. This is regrettable, since skill at negotiation matters a whole heck of a lot more than skill with Chef or mastery of Postgres trivia for determining both the instant results of the negotiation and one's larger career trajectory.
Still working on that blog post on negotiation, should be up early Monday for more elaboration on this.
I've personally filtered out dozens if not hundreds of otherwise qualified people due to salary concerns without a second thought. In two cases within the last six months I've seen the party who pushed for a higher salary reach out again only to find the position filled.
My guess is that you've never experienced an employer's market. It may not be one in silicon valley, but it is for most engineers around the world. Being a white guy in Japan, and then a guy with a popular blog following, you've had a far, far different experience than a typical engineer.
You're probably right that line-of-business developers at Fortune-100 insurance companies on the east coast have a harder time than SFBA devs. But don't overgeneralize: in software companies in the US, it is a seller's market for talent.
So, two specific responses:
(1) You can in general safely push back on the first offer from any company --- this practice is so time-honored that it gets a chapter in _What Color Is My Parachute_, which is among the most anodyne sources of career counseling out there. Hiring managers, even at office furniture companies in Grand Rapids Michigan, are prepared for you to reject the first offer, and they've deliberately calibrated their first offer to deal with that.
(2) Technology companies everywhere will in 2012 go out of their way to work through salary negotiation. It doesn't matter if you're in SFBA, Seattle, Austin, Chicago, or Cleveland: if they're hiring for talent (ie, if they're actually a tech company), you're not going to spook them. Wherever they are, they have gotten used to the idea that candidates hold the cards and are likely at any point to decide to relo to Mountain View to work for 1.5x as much as you can pay them.
Before you automatically write off all of China (as well as India and other nearby countries), consider that engineering is moving at a rapid pace here. Not only are some internet companies ahead of western counterparts (e.g. free to play gaming models), but there's simultaneously a boom in materials engineering, medical devices and clean-tech.
I realize that the US is particularly insulated from the market realities, due to a difficult immigration system amongst other things. I can't really comment much on the specifics. But those sorts of distortions don't don't generalize to the entire world, and they won't last forever.
It depends. As another data point, I've applied for jobs where the job advert was from 6 months ago. There is a shortage of IT talent, this company had been waiting 6 months. They can afford to wait a few weeks more.
Go read some classic negotiation texts instead. If you're in the process of getting a job, you owe it to yourself to spend at least five hours reading about and grokking negotiation.
Do yourself a favor and never share your salary info with someone looking to hire you. They don't share their numbers, do they? So why put yourself at a disadvantage?