Make the First Offer in a Negotiation
inc.com
inc.com
I think the reason "Let them make the first offer" is such common advice is because most people, when faced with the prospect of choosing a number, usually go too low, perhaps out of discomfort with appearing arrogant or for fear of losing an offer entirely. The former's probably the bigger concern for engineers, given how notoriously bad at appropriately valuing their own skills they are. The latter is rare in tech, but is occasionally a legitimate concern for other fields with worse job markets.
Also, generally speaking the hiring party is at a strong advantage by virtue of both information (They know how much they're paying other people, and how much they've offered to people who've turned them down) and practice (They've carried out salary negotiations dozens of times before, while the potential employee has probably done it at most a handful of times.).
Given that, it's probably safer to let the other party open the field, and hopefully negotiate up from there.
https://onedrive.live.com/view.aspx?resid=641BD45A41B1BD6C!6...
I don't think it's really unique to tech. The information asymmetry you describe below is more than enough reason for this to apply to nearly any prospect in any field, and it applies doubly in situations where the pay is generally low to begin with (eg. shiftwork).
Only the most exceptionally informed prospects will be able to make an opening offer that won't stand a good chance of getting them shafted.
More negotiation skill is required to credibly threaten to walk away or justify your worth after they've opened by lowballing you.
If you do have reasonable negotiation skills and enough insight into the other party's assessment of your value to avoid underestimating how much they think you're worth, you can probably hint you know the size of that value and anchor their offer to it without making the commitment of an actual offer anyway.
If a software developer tried to negotiate that no more than 50% of their time would be spent developing software, they would probably also get some offers rescinded.
For example, if you are negotiating your salary for a first-time software engineering gig and open with $500k, the other side is likely to say something like, "There is absolutely no way we can do that. We would like to offer you $75k." If you're offer gets wiped off the table, your anchor has absolutely no power in the negotiation.
So go high (or low, if you're on the other side of the table), but don't be too extreme.
The gist of the answer was "we feel that you are in range of [some job level/position] but only the very senior people in that department are paid in the range you mentioned as your requirement."
So they decided not to spend any more time with me because of the mismatch of salary and their perception of my experience level so far.
So I tried something and it works a lot better: I ask them for a concrete date/time we can meet again for a date. I give zero importance to their number. Qualitatively, I think most girls are "shocked" and not used to someone telling them their phone number is completely irrelevant.
therefore if you're an engineer and the typical job is 100 thousand, ask me for 120 if you want to play this game. It is unlikely this would shut down the conversation though it may send up a warning flag.
Anything over that and I don't see a point to continue the conversation. I wonder if you are clueless about your value or if you are a diva who will cause too many headaches later. You can't take it back either.
1. Never give them any of your previous salaries, as this may anchor you to a much lower price than they are willing to pay for your talents
2. Never negotiate salary before they have conditionally agreed that they want to hire you, as this is when their perceived value of you is the highest. If you start negotiating before this point, their value of you will be lower, and you'll have to either refuse to go down and have to break off the whole thing, or anchor yourself to a lower number than your talents are really worth.
On top of that, giving them a number first is usually not to your advantage, as you probably have less information about what the market is really like and what they are really willing to pay for you, but this is a weaker point than the above two. It could go the other way in some situations, especially if you have some sort of rare, special skill or connection above and beyond the typical salaried employee.
The anchoring concept is somewhat skewed when you are asked to provide current comp info. Most of my clients (recruiter) require me to provide prior info. The current comp info provides an anchor right away, and any accompanying information with the current comp will be the true anchor. So saying "Candidate is currently earning 120 and will entertain offers above 135." The client now knows where the bidding starts, so any offer below that won't be considered.
When the vp of the company asked what I wanted, I gave him a figure that got his attention. He remarked it was beyond what they could do. I responded that the amount I was asking essentially covered the benefits they didn't give. When they finally made an offer, it was almost exactly what I requested.
If I'm willing, even happy to take the job as described for 100k, that I might have pushed him up to 125k is probably not relevant. Other factors in the job will be more important by that point.
But rushing to be first put an offer on the table that is lower than the offer they were about to make you is almost[1] invariably stupid. And at the risk of stating the obvious, most contract negotiation isn't like employment in that pretty much all the party paying the fee is offering is the cash.
[1]the exception being where there's a good chance that appearing to be "fair" or "cheap" will help you get a better offer in future, or prevent you from being gazumped at the last minute.
"'My own research suggests that first offers should be quite aggressive but not absurdly so', Galinsky says."
Make the first offer, but only if you're pretty sure you know at least as much as the other side about what's reasonable. If you're not in the right ballpark, an absurd offer gives the other side the right to sandbag, knowing that you don't really understand the playing field.
Job offer negotiations sort of suck in this regard because you often don't know the market price, and if you set your number too low in your head, you're pretty much stuck starting off lower than you should and that can impact your entire career.
You might think you're doing good negotiating, but the guy next to you might be making 10-25k more a year just because they started at a higher number. It's weird but true.
Same applies to buying or selling just about anything. Have as much data going in as you can about what is normal, fair, etc. and compare that to what you want.