Salary negotiations for techies (2011)
jacquesmattheij.com
jacquesmattheij.com
That's nice in theory, but the techies' dilemma is that it's often difficult or impossible to put a hard number on the value they have added.
How many customers were retained because you decreased response times by 100ms? How many customers were gained because of that slick UI you created? How many discounts were not handed out because of downtime that wasn't suffered because of your cautious error handling and exemplary testing? How much money was saved because of that documentation you made that helped the new hire ramp up faster?
Even when you can put a hard number on work you've done, like decreasing hosting costs by $15k per month, isn't that why you're paid so handsomely already? How are you going to do that again next year? (Why haven't you done it already?) Wasn't it a group effort?
The reality is, you're basically going to get paid based upon what your employer has deemed everyone else in your position is earning, plus or minus some % based upon experience level, your reputation, and how badly the company needs the position filled. If you don't like that, time to go into management or sales.
Your value to the company is how much it would cost, in time, effort, and money, to find a replacement(s).
That's the important component - the volatility of performance has a major impact on price of an option !
Let's imagine we are Board of BigCo. Our CEO just took home fifty mil for what is at best a lacklustre performance.
We could fire his ass, but who do we replace him with? We could get pretty much anyone here on HN to do the job, for just one tenth of the cost. But if we hire say that lifeisstillgood, the inevitable PR disasters will wipe more than fifty mil off our stock / revenue.
But if we hire (insert your name here), a clearly brilliant HN member, they will discover that being CEO of a major company means very little power or influence - these things are like oil tankers and do not turn for anything. So getting an even better CEO than our guy will not manage to bring in much upside.
So unless there is a massive upheaval in the market meaning plenty of opportunity, then replacing a CEO is always a bad idea - the downside is huge, the upside is minimal.
Maybe that's risk adjusted returns - but I prefer cynicism.
Some economist did a rather macabre study of share prices of companies as their CEO's died in various accidents. (Ie removal of the CEO controlled by factors outside corporate politics.)
Consultants are typically brought in to solve specific problems that are perceived to be high-value. If a company hires a consultant to sustainably reduce hosting costs by $15,000/month, a good consultant will probably have no problem pricing the engagement as a not insignificant percentage of the savings over a reasonable period of time. Good luck trying this as a rank-and-file employee. If you're that good and are serious about maximizing your earnings, become a consultant.
This is not a problem where you need precision, just a reasonable level of accuracy and a well-presented argument.
I can figure out which algebra to use and what light research to perform... but may you please educate me on these "Fermi estimates" regarding salary negotiation?
you're right, pay is basically what your peers make +/-
"Transforming" the sales numbers should also be measurable. Example: "Before, salespeople were closing x% of deals and missing scheduled followup on y% of contacts. Now (x+5)% of deals close and only (y/2)% of contacts are mistakenly dropped."
So if you are in a situation where there is a glut of junior managers and a scarcity of talented engineers, then seemingly inexplicable things start happening to salaries.
In other words, the UK today.
What a beautiful and elegant description of software engineering!
These two things can be precisely measured, provided you have the traffic. And you should be measuring them anyway, because that slick UI might be hurting things.
A/B test all the things. Then you'll know both your value, and whether any specific improvement you made is worthwhile.
The truth is that your employer doesn't consider your value as a major part of their compensation offer, they consider what would happen if you didn't exist. Is there or isn't there an endless ocean of other candidates who could more or less do what you do and do it for what they're willing to pay you and no what you're demanding?
In case you aren't sure what the answer is, there is.
Good STEM programmers (i.e. science companies) are very hard to find. The jobs aren't as abundant as web dev, but they are there, pay reasonably and it's easy to show how valuable you are to the company.
Pretty much this. If you are not part of the profit generating side of the business, you will always be viewed as a cost overhead. Engineering is unfortunately a question of cost expenditure for businesses but even more so for smaller software companies who don't have monopoly.
Your job is to change that perception.
Yes, but the point is that if you want to make a good salary, that's the problem you need to fix. What is your approach when you encounter something that's "difficult or impossible" in your daily work? You apply intelligence and creativity and create a solution.
> The reality is [..] If you don't like that, time to go into management or sales.
Whatever you do, DO NOT try to change the rules. DO NOT try to learn what it is management and sales do to get those nice, big salaries. When something is hard, GIVE UP.
Of course you need to understand the employer's BATNA as well: If they don't appreciate tech, ie. their BATNA is to fire you/ignore you until you leave, then that's what you do. But companies can do that to their sales and management teams as well.
Here is why we don't
IT has for the most part never been a money maker of a lot of companies. They see it as a loss leader. IT is seen as the "Oh boy here comes the IT budget again." Unless of course your business is making software for the masses. But then I have been at 3 companies like that and IT was always the first on the chopping block. You are paid only as much as it takes to replace you, unless you walk on water then you should be at Google or FaceBook.
The only way to get a 20 to 25k raise is to find another job. Unless of course you are doing the job of 4 people which in IT 99.9% of the times you are. Don't believe me? Go ask for a 20k raise if their eyebrows shoot up like Mr. Spock then you know how much you are worth. I sure hope you have another job lined up because that's the queue to them you are looking.
This has been my experience and I have done exactly what I have stated above.
I now do security and compliance. No more wake up calls, no more you can't go on vacation because Oct. through January is the time of the year where we make our money.
Oh and that 100K salary mark gets very hard to justify every year especially when the CFO looks at the books and has a list of who is making over 100K per year. Unless of course you live in California and NewYork then that's welfare wages.
I think OP was referring to Engineers and Operations at software companies, not IT at an accounting firm.
Exactly. I'm pretty sure that IT is harder and requires more training/practice than e.g. finance or sales, but profits from those two are very easy to quantify and it's quite obvious who the deal-maker was, whereas IT is mostly teamwork and doesn't have obvious profits.
Oh, and your customers are gone too because you can no longer deliver any product or added-value. So, no income (except investments).
Still, I think it's ironic that in one paragraph, dog-washers and pizza deliverers get caned for being bullshit jobs, and two paragraphs later the author bemoans the loss of workers that move things (pizza...) and maintain things (dogs...) :)
If you're just checking boxes or asking for more money "just because", then you deserve the arched eyebrow you're bound to get.
How long have you been programming professionally?
These things ultimately mean much more to a company, at least my company, than years at firm. I'm also constantly pushing myself to build more skills, not just programming, but also social skills too. I've noticed the longer I do this, the more people are willing to listen to and value my input. My company hierarchy is very flat for one that does $40 million in revenue. I see my CEO whenever he's in the office, his office is right next to my workspace.
It's a case of, sure, I could go somewhere and get a $X0,000 raise and finally check that six figure salary box, or I work here towards middle / upper management and reach that goal in just a few years and get a $X00,000 raise. I'm comfortable right now, no need to make a decision right now, I don't hit two years here until July anyway. If by then it doesn't look like the vision I have for my career here is really viable, then sure I'll start looking.
> I'm not the most amazing programmer ever, but I am pretty good. I also have business sense and the ability to talk convincingly to non-technical people.
If you can deliver at all, you are probably better than most programmers out there. Talking to non-technical people is an awesome skill in its own right.
Yes, my asking about how many years you've been working was just as a rough proxy.
If you want, you can shoot me an email (see profile) for some more in-depth chats. I'm interested to see how typical my trajectory is. I don't think I did anything extraordinary, but most people I talk to seem to be getting inferior results.
By reading Hacker News I had the impression that everyone there that is not a junior is making at least U$100k/year, except for special cases in rural areas or small towns.
In my own experience I only got a significant raise once in my career - I asked for $90/hr when I was making 80/hr, and they gave it to my to my surprise. That's around $20K/year.
Nothing is more discouraging than watching Joe and Jane from high school and college getting promotions at their consulting, law and medical careers knowing that I was way smarter than they were. Cue Kurt Vonneghan, "The real horror is waking up one day and realizing your high school class is running the country"; well, I'm just slightly disgusted that just the undeserving plebes, not the popular high school kids are buying McMansions and starter luxury cars!
Well, at least I'm part of the enlightened. I got my security clearance (no H1B competition), my personal contracting sole proprietorship (line-by-line deduction), Cisco/Oracle/MCSE certificates (certified scrum-master), and I intend to stick it all the way to the Man!
You're not smarter than them. If you were, you would have thought about your career, instead of sloppily stumbling into the first thing that appealed to the teenage version of you.
Cost center, not loss leader.
It helps to be in an IT-focused company, vs a company that has an IT department. I've been in both and the former is vastly better.
I used this technique to get that much of an increase. First found a job that I was actually willing to quit for. Went to my boss with the offer. They made a counter that I accepted. Without that offer I would have gotten probably 2-3% yearly.
People get too caught up in trying not to hurt their employers feelings by threatening to leave. Who cares if they know you were looking for another job. It's a business decision. I've tried to leave more than once at my current position and they don't treat me any differently. The key is to be prepared to actually leave if they call your bluff.
Also this probably means I was severely underpaid to begin with.
>First found a job that I was actually willing to quit for.
Check out BATNA - all about improving your Second option
Recruiters always ask this up front and INSIST that they must know. I have NEVER been denied the opportunity to interview for refusing to give a number upfront.
If you're applying at a company, it means you've done at least a little research on what they should be expected to pay and you see somewhere around that range as acceptable. You don't have to tell them that you've researched their rates and find them acceptable, because that too would be like giving them a range, instead the research is simply to avoid wasting your time. You wouldn't want to interview for a job that pays the position with compensation worth at most $60k when you're already making at least $100k.
This way, you have an advantage: you know roughly how much they pay but they have almost no idea how much (i.e. how little) you will accept as compensation. Best case scenario, they offer you MORE than what your research said they would, and you negotiate a little more on top of it and accept, assuming you actually like the job. Even if they say no to your counter offer, you're still ahead. Worst case scenario, they offer you less, they say no to your counter offers, and you have to decline. Either your research was wrong or they were lowballing you, either way you've got multiple other interviews in process (right?) so move on. If you find your research is repeatedly off the mark, find better sources.
No matter what, don't give them a number. Make them give you a number first and negotiate from there.
What tactic do you use for this?
This lets them know two things: 1. You're not going to divulge your current pay no matter what, and 2. Gives them a face-saving 'out' by complimenting them that their company is "different" and special (and makes it sound as if your compensation is totally their decision; the negotiation over a number has not begun yet).
So the way to use that to your advantage is to say a number first, but make sure it is far more than what you think you can get, but not absurdly high. That way if they accept you'll be pleasantly surprised, but if they negotiate down it will be around that figure.
Of course if you're not confident in that, just let them put out the first number and go from there. But NEVER tell them what you are currently getting, that will anchor your salary to what it is now plus a small increase.
And when they come out with a price tag finally I often tell: Well thats a nice salary for 20 hours per week work.
And guess what? I got 20 hours contracts this way 3 times.
I'm now consulting again, and I avoid selling hours, because hours do not scale. Instead I sell solutions, because a solution to a problem likely has a much higher value than the hours summed up.
Also, if you switch from consulting to being employed you can ask for much better terms, then anyone who had been unemployed before. Always add the term to your contract, to allow you stay self employed in addition to employement, to serve old customers. And if you leave a company, offer them a maintenance contract.
For employed people, sometimes the 'cost of living' argument can make wonders. e.g. I once had a query from Munich, and after we went several weeks till I accepted negitiation of salary, I came up with:
I'll play only €208 per month for my flat in Bremen, including heating, waste removal and water. I only pay €100 for my yacht per year, including boats house in winter and mooring in summer. Your offer sounds nice, but rentals are 5 times as expensive in Munich, then in Bremen, and I better do not talk about prices for mooring a yacht in southern Germany. Get me a similar fat and mooring in Munich, or what do you think about home office + Bahn card gold (to ride the train for free) to visit your location once a week + hotel costs.
And you can really get those, if you switch from consulting to employed, because the company does prefer employed.
I also live in germany and I'm always confused when americans talk about salary because I have no idea what the cost of living is. The only thing I know is that gas and electronics are cheaper in the US.
Sheesh that's cheap. I can't think of anywhere in the UK where I could get either for that price.
a. a lower opinion of what you're abilities are worth
b. lower expectations for what you'd be delivering
c. lower value of the position they need filled
If you find your research is repeatedly off the mark, find better sources.
I'd be very much interested in what are you sources/methodology to carry out this research. I mean, if the company you are applying to is big and well-known ( and listed in glassdoor, angel list, etc), I may have a chance to figure out the rates. However even in the case of known companies, I often cannot find the salary information and instead I'm left with the classic competitive pay/salary/compensation.
Finding out these rates for each company is even harder if you want to be hired as a contractor.
The rationale is:
A) If how much money you want from us isn't even an option, we don't waste your time. We can be very up-front about that before a lengthy interview process proceeds.
B) We can judge your follow-up interview (generally a full-day paid tryout) against how much you expect to be paid. Which on the negative side lets us weed out expensive mediocrity, or on the positive side, give opportunities to people who aren't quite there yet but wouldn't cost much to take a chance on and try to train up.
A few people definitely look at it with suspicion, but in general I think it's worked out better for everyone.
Also, as an aside, I would take issue with what you said about researching what a company pays. For so many companies (mostly small ones), all you can do is ask around and find a current or former employee who is willing to tell you. And that is so often, for most applicants, not an opportunity you get. I think you're making that research sound much easier than it actually is.
Then if the amount of money I want from you as a potential employee isn't an option, I won't waste both of our times in applying.
Also, we're honestly pretty new at this. Our company's a little over two years old, and only in the past year have we gone from poaching people we already know and trust to interviewing people we've never met.
Because it's not fixed. We don't usually hire for a particular, specific level of talent/experience except in rare cases...
You may not realize it, but those two statements are contradictory.
Asking price and value are correlated values. If you have a hard limit on what you can pay, you have a soft limit on the quality of your candidates. And by putting a low-pass filter on the interview process, you are clipping off higher levels of talent/experience.
Or do you only want the employee to give up information?
If a company won't interview you until after you say a number, you don't want to work for them. Really, you don't. They are literally making their first interaction with you a dominance game designed to decrease your compensation. How do you think that will pan out for you two years down the road?
I haven't decided if I'm open to lying like that or not, but I liked it.
IMO if someone's having issues getting past autofilters, they're doing it wrong. Personal network, reputation, etc doesn't need to pass through filters
In countries that aren't the USA, and don't have that "at-will" crap, giving up all the legal employment rights is a bad move to make.
1) do value based pricing not cost-plus for your labor (ask for what the market will bear, not your cost of living plus some small 'profit' on top of that)
2) have a batna (https://en.m.wikipedia.org/wiki/Best_alternative_to_a_negoti...), i.e., another offer so you have leverage in the negotiation
i've ignored these tenets exactly once, and that remains an unpleasant memory for me. every other time, it's resulted in increases of 10-40% in comp & benefits. of course, you should balance comp with qualitative advantages, but the point is not to just let yourself get screwed. =)
Things rarely work like that in the real world. This is not to knock the concept of "fairness" as being naive or useless, but rather just to point out economic realities: Companies do not necessarily price things in terms of "cost plus", but rather try to optimize. In some cases, they may sell certain items at below cost or near cost in order to attract customers for some other items.
In fact, negotiating for a market rate can be seen in the light of fairness and "cost plus". If you suspect you are underpaid, and research (Glassdoor, etc.) suggests this, then implicitly, your time is less valued than some of your colleagues. I doubt many would say their time "costs" less than others'; thus, would such a suggestion be fair?
The market for developers is a lemon's market.
That means, if you have 100 good cars selling at $2000, and 100 lemon cars selling at $1000, all the lemons will sell first, because the people making purchasing decisions aren't expert enough to tell the difference.
So it is very rare to be paid based on value, because why would a [CEO|CTO|hiring manager|whatever] pay $1M for this guy, when he can pay $150k for that guy, and he can't really tell the difference between them?
Just an idea, I haven't seen this discussed anywhere, what do you guys think?
"when he can pay $150k for that guy, and he can't really tell the difference between them?"
Your tech lead should be able to tell the difference and see the actual value in programmers and explain that to the money people. That is why this lemon theory entirely requires a bad hiring structure.
When I think about this perspective, another way to state it is that maybe the work being done doesn't actually need the costly person?
Back to the car analogy, if your requirements are to drive 5-10 miles per day do you need a luxury car with GPS, sound system, leather, headlight wipers, etc.? Or can you use a beat up car that might be a lemon that mostly works? And when the beat up car has problems you get another one. This seems to be the approach larger companies (emp_count > 5000) take since they want to commoditize the work and make the employees completely replaceable.
Companies do well as they interview many candidates. Developers generally do worse as they go to less interviews - obviously due to resource constrains.
If you are shit hot good, both X and Y go up. The black magic of negotiating is a rounding error compared to how great & unique you are.
And you don't have to be all that great and unique. Interviewing for a tech job is a skill you improve with just a bit of practice.
I think perhaps it boils down to unfamiliarity: I've done it a very small number of times, and it feels alien and weird. Especially some of the language used. Compare that with a manager who has hired $x employees a month for a decade, and doesn't think anything of it.
I wonder: Are there any videos available of negotiations (real or realistically faked) where one could build familiarity with what a successful negotiation looks and sounds like? I think that might be a useful addition to textual "how to" guides like this.
It's mainly focused on salary negotiations during/after an interview, but I get the sense this is what you were after. Apologies if this was not the case.
0. http://www.amazon.com/Negotiating-Your-Salary-Minute-Revised...
1. The title may not be so sensational in my experience; most negotiations don't take hours and thus while the effect may not be "$1000 a Minute", it may not be that far off.
1. This conversation is painful/awkward 2. Prepping for negotiations is stressful
During negotiations should I simply ask for them to match? I don't want them to think I'm actively looking for a new job but want to get paid my worth.
A problem for many people is that it's hard to compute their exact value, or they are afraid to have that kind of discussion.
If you're being paid $75k a year, and you've added a significant amount to the bottom line, I doubt you'll have a hard time negotiating a $10-20-30k increase. Same goes for a new job: give them examples of achievements, and show how you were beneficial to the business.
Negotiating a new secondary offer is a great thing to do; it gives you additional leverage. If there's a chance a value creating employee will leave, there is no reason not to give a raise. You could use that offer to negotiate a 25-35% increase, if you can show the value you've created at your current company.
To put it bluntly, most employees are actually not worth that much. They get hired at the least amount possible, and they execute strategies, for the most part, set by a few people who are paid significant amounts.
I also like this Quora post: http://www.quora.com/What-kind-of-jobs-do-software-engineers.... Check out the first answer written by Amin Ariana; it explains things well.
At the end, I simply said 'Something I want to bring up is that I've looked at the market and I don't feel I am being paid adequately for the value I'm creating'. I'd be lying if I said it wasn't an awkward conversation. I didn't mention any number at all & was actually met with a slightly negative response, but a week later at the next 1-on-1, it was brought up again & I was awarded a 10% cash raise (I negotiated some ISO's too).
In your scenario, I wouldn't tell them that you interviewed at a competitor either. You can simply tell them that you've looked at other roles & determined market rate as being higher than what you're currently paid. Only use another offer as leverage if you are prepared to leave & take that offer.
Modesty aside, I'll also admit that I'm a high performer in our team & so I already knew that I had leverage. Something I've learned though is that unless you bring it up, it's never going to happen - there is no-one looking out for you unfortunately, so take the initiative & help yourself where you can - it equates to hundreds of thousands of dollars over your career.
However, just because you have a lower likelihood of success, it doesn't mean you shouldn't ask. If you receive a 'No', it will probably speed up the inevitable decision of whether you actually want to stay with this company (knowing that they aren't going to incentivise your performance).
I would also keep in mind that you should only be asking if you either feel you're being paid lower than market or that you've taken on more responsibility so now your wage doesn't adequately match your role. Just asking periodically without a reason isn't going to work for anyone.
The trick is, make them think you are not looking, but that others are looking at you.
But you have to have the offer in-hand, and you have to be willing to pull the trigger.
Another possibility, is that you've stopped increasing your value to the company. This is normal. Einstein probably wasn't reading patents any faster at 7 years than he was at 3 years when he worked at the patent office.
More importantly to you, the company may not be a place where you can "up your game" any further. You need to seek out new jobs where you can increase your knowledge and value.
An article from Harvard Business Review from the speaker[1], He summarizes the main points:
1) Don’t underestimate the importance of likability.
2) Help them understand why you deserve what you’re requesting.
3) Make it clear they can get you.
4) Understand the person across the table.
5) Understand their constraints.
6) Be prepared for tough questions.
7) Focus on the questioner’s intent, not on the question.
8) Consider the whole deal.
9) Negotiate multiple issues simultaneously, not serially.
10) Don’t negotiate just to negotiate.
11) Think through the timing of offers.
12) Avoid, ignore, or downplay ultimatums of any kind.
13) Remember, they’re not out to get you.
14) Stay at the table.
15) Maintain a sense of perspective.
Here is a quick summary from "BatMasterson" on that forum [2], they are useful for those who watch the video
Dr. Malhotra makes some good points.
I've summarized quotes from his lecture (not the entire 15 points) here:
1. Think about who you are and what you want do to in your life. Pick the right choice
2. What is not negotiable today may be negotiable tomorrow.
3. Stay engaged.
4. The Mike Tyson allusion: "Everybody has a plan until they get punched in the face"
5. Get the why they're asking what they are asking.
6. If they make an ultimatum, generally speaking, (you can) ignore it.
7. There is no right answer to every situation -The Star Trek Captain trial allusion where the answer is Yes...provided that, considering this...
8. These people like you but you are not their only concern.
9. Negotiating w/ your future boss is not the same as negotiating with HR "adapt-to-each".
10. Don't be in a mad rush to get offers
11. Tell the truth. Resist the temptation to tell even a small lie.
[1] https://hbr.org/2014/04/15-rules-for-negotiating-a-job-offer
[2] http://www.wallstreetoasis.com/blog/how-to-negotiate-your-jo...
* http://www.kalzumeus.com/2012/01/23/salary-negotiation/
* http://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pro...
* https://keen.io/blog/29904565692/how-i-negotiated-my-startup...
Like the author of this post says, calculating the value you're adding with your work is the only true way to accurately price yourself. It may not be as easy to do as someone who works in sales but it's worth your time to do so.
Shortly after reading BtTB, I had a new contract opportunity come my way. I doubled my hourly rate.
How long would you wait after the bonus to ask for a raise?
What if you don't want to stay at your company much longer? Should you still ask for a raise, and would you feel unethical for leaving soon after getting a raise?
I also brought up that I've had a few job offers with highly reputable firms, and my current career growth had stagnated where I was currently positioned.
Basically; me me me.
Every two to three years start looking for another job - chances are you are being underpaid and holding out for a meaningful raise or promotion is usually a bad idea. Few companies seem to keep salaries properly indexed to the market. At least in IT.
When you get an offer - always always counter it. No reasonable business is going to withdraw an offer if you counter. Figure out what you're worth and add 5-10%. If the first offer is already on the 'high end' of the spectrum still counter and ask for a signing bonus, options, better year end bonus, or more vacation. That will most likely be the most profitable email/phone-call you'll have - at least until you repeat the process in 2-3 years.
It's worth noting that due to compounding, these are not mathematically the same.
In 5 years:
5%/year: 27% raise from base
2.5%/6mo: 28% raise from base
Even searching through all companies there are some down lower around $70k, but most of these are companies I've never heard of, in locations that are likely cheaper than New York, SF bay area, etc where Google has offices.
I'm really curious, for the technical salaries that are 500k+, does anyone know what is going on? There basically appear to be a bunch of random system analyst, database administrator and similar positions pulling down 600k in the most random places around the country.
I would rephrase it as:
People that love what they do are without a doubt the most inept group when it comes to negotiating for compensation.
I think it doesn't matter if you are from IT, an architect or any other job. If you really like what you do, you don't mind to do it for minimal money and business people will exploit that weakness. For example, in architectural field, relevant architects are sometimes invited to be guest teachers in colleges. Once one said during his class:
If they discover that I like to come here, they will stop paying me.
I have never seen anyone like that who for example have a family... Only very young and very naive people do this; maybe there are lots of them, but I don't think they are the majority.
"our average programmer approaches salary negotiations like this: (1) I need ‘x’ to survive. (2) It would be nice to save a bit. (3) I need to pay my taxes."
That seems to be a strawman. I mean some very young and very naive programmers would do that, but all my programmer friends do this:
(1) I am a fairly good C++ developer. (2) I ask all my fairly good C++ programmer friends how much they are paid in the country where I live. I also ask them which are the companies which pay wel, so that I will apply to those. (3) I try to ask for the upper part of that range, at the companies I have heard pay well. I try multiple companies.
And basically that's what you can do. Bigger companies are mostly looking for replacable people. They mostly need 'good C++ programmers'/'good enterprise java developers'/'good web developers' etc... and will train you in their special systems. They will not care about your reasoning about how much business value you bring to their company: First that is so hard to measure that you cannot measure that, second they just do dozens of interviews with other people, and will simply hire other people if you want bigger pay than the realistic market range.
When you are a big gun or a specialist with some very unique skills, or when you are talking to a smaller company who have no established policy on developer salaries than there is more to it. But for most people at most companies: You just have to know the typical salary 'your kind' can get, and you have to ask for that, and that is all to it.
Programmers are mostly a commodity, but a quite well paid commodity at most companies. Which means that you can get a quite good salary without having extremely good negotiation skills (just using the heuristic I described), but you cannot get much more whatever negotiation skills you have.
I believe we are all much better off if we focus on building our own niche community/product (a.k.a. http://javascriptweekly.com - the number of subscribers is not as important as the quality of the subscribers).
I don't think that's true at all. From small startups to large successful no-longer-startups, often dev salaries dominate spending, from what I usually hear.
Perhaps my experience is limited? Or perhaps the author means something specific by "mature company"?
IT personnel typically pays well over $50k/year for an established (not tech support) role. And over $90K for a senior developer role (usually more). This is usually twice what an employee in other roles will make.
Rock star sales people in a sales driven company can make quite a bit more, but this tends to be commission based... there is a risk there, and the reward is higher pay. If you have a good idea, and want to take a risk, then you can reap larger rewards from that, though you have as much or more chance of falling on your face. I've now done that twice, and am happy to make a nice salary as a senior developer or software architect than deal with the risk/reward scenarios.
when someone joins, unless they are at vp level they really don't have much negotiating opportunity, we make a decent offer and they either take it or leave it. we very seldom adjust the offer.
I don't automatically do this. I want to know why, and what their value proposition is.
People have things happen and reasons and goals for wanting to change their comp, and frankly, that goes both ways. I've had people want less and to change roles for very similar reasons.
Replacement is expensive, so is commitment and vision. For some people, yes. It's a trigger for replacement. For others, it's a time to discuss keeping everybody healthy and productive.
And there could be options too. Perhaps more money isn't optimal. Nobody knows, until there is a discussion.
Could be time to replace, could be time to make different employment arrangements, whatever.
I might advise them to take the offer.
See my other comment.
Employees are sometimes happy. Sometimes they're miserable. Sometimes they're in-between — for complicated reasons, that may lie outside of work.
Firing any employee that asks for a raise is so unbelievably short-sighted, binary, sociopathic, and potentially bad for business (morale, replacement costs, unknown costs), it's cartoonishly villainous.
You sir, appear to have authoritarian tendencies.
That's an assumption on your part.
And since you state up front that you are giving reasonable raises you essentially forestall the negotiations so unless your definition of 'reasonable' is different than the ones that your employees maintain you should have next to no turnover. If that's not the case you might have a problem there.
The 'opportunity to work on cool stuff' is worth $0 to a working dad with a mortgage, so likely you can do this but only to younger people, but people do not remain young forever and sooner or later their expenses will go up. And you sound like you will not be taking their position into account at all.
If they're getting better offers elsewhere, its not market rate.
Whats to say other companies aren't doing cool stuff? All companies say this.
Exactly.
That makes you sound like a horrible manager.
No it doesn't.
You seem think employees are there just to serve you for the lowest bid and if an employee is coming to you with a better offer then, you aren't paying them "market rate".
Clearly he thinks that "asking for a raise" puts an employee in the "not 100% on board" category. That makes him terrible at reasoning, and perhaps poor at empathy, and strongly indicates he's not the kind of person an intelligent developer who desires to be treated like a human being should ever have to work for, but I'm not sure it makes him a bad manager per se. He might manage very well in other respects.
Since we happen to be in a sellers market for IT talent, I suspect you would not have very many takers if your prospective employees knew up front that this was your attitude towards them, and they'd be valued so little that asking for what they thought they were worth would mean they would get fired.
You attitude would fly much better in a buyers market, where the employer holds all the cards. Then you could demand whatever you like, and the employee would most likely be desperate enough to lick it up.
A normal high tech company runs an R&D budget that is less than 10% of earnings. The rest of the money goes to cost of sales, infrastructure (building, chairs, etc) and various other things. This means that on average your contribution needs to pull in at least 10x your cost in order for you to be seen as being worth it. There are also a lot of costs for hiring employees -- employee tax, insurance, benefits, etc, etc. So if you make $100K in salary, then your contribution has to bring in maybe $1.2 - $1.5 million.
You may think "Oh those bastard sales people are making way too much and aren't providing any benefit", but you will find that the company will still budget less than 10% of earnings for R&D. Whether it is justified or not, quite a few of the people in the "management side" identify a lot better with sales and understand their value a lot more. Unless you think of a way to significantly increase earnings, then you are depleting the pool of cash for R&D when you ask for a raise.
"Not my problem," you think.
Except Jane down the corridor appears to be very nearly as productive as you are (whether it is true or not is completely beside the point because everything will be judged by its appearances). She makes something like 60% of what you make. She's a freaking bargain! You, on the other hand, bitch and moan that you can't make ends meet on $100K and that you are living out of garbage bins. Plus you see yourself as the saviour of the company and without you everything will just collapse. Managers think, "God, please don't make me talk to that guy again".
The order comes down from above -- either 1) Our competitors are kicking our ass and we need to downsize R&D OR 2) We need to ramp up explosively to hit the next big business wave, so we need more programmers!
How will we reduce our expenditures or hire more programmers with the same amount of money? Easy! We'll do away with those bitchy-moany prima donnas and hire more of the absolute bargains that never complain.
Here's a secret I've learned. Being seen as worth significantly more than you are paid means your boss always approaches you with a sense of gratitude. In fact, creating a sense of solidarity with management in this respect shows loyalty. While it is true that, in general, companies do not return such loyalty, individuals in management will tend to select a handful of people that they trust and "can not do without". Those people will not be the guys that constantly threaten to leave for greener pastures, or that constant complain that they aren't appreciated.
I have never negotiated salary. I have either taken what has been offered and then worked hard to become an integral member of the team or I have refused the job. I have left jobs that I didn't like, but I have never left to make more money. Nor have I ever threatened to do so. I probably get paid less than I might if I pushed hard, but I can tell you that I enjoy the privileges of being "that dependable guy" much more than any salary could provide.
It's pretty hard to for a late employee to break in.
As a floor, you need to fund a modest life, and that means retirement, healthcare, personal improvemwnt, food, home, etc...
Add some small margin onto that for quality of life.
Second, get business minded. It helps to take an interest in the company, know it's financials, and it's goals. This helps you position your value in direct, meaningful terms.
I very strongly agree with being ready to walk when it comes time for salary discussions. If you can't walk, you will get the lowest comp, unless you have some relationship or other leverage to play on.
The bigger the increase, the more this matters.
The idea that you are as valuable as a replacement and training is false. This ignores you as a person, relationships you have, etc... this is often the framing, but do not be afraid to expand the discussion.
Set goals and justify them. This is something sales people do all the time. They are motivated by those goals and communicate them easily and consistently.
Ie: I need 200k this year to fund my travel and home investment plans.
A tech person may have identical goals, or maybe is wanting to build something, or send a kid to school.
Value these and frame your motivation to work in terms of your goals, company, love of the work, etc... Managers, and higher level people in the company understand and respect goal oriented people. Make sure your goals and the company align, or make basic sense and there are no conflicts.
This all speaks to the work being worth it and it also speaks to reasonable expectations as opposed to just greed. Greed isn't bad. Clear, meaningful goals are easier to sell and for others to identify with. When others identify with your life purposes, they can value them and very easily see how you are inclined to stay and work for them. They also nicely dodge the "how much is enough?" Type questions.
Get your other offers and or secure relationships needed to know you can land on your feet should you need to make a change.
Be flexible. The company isn't seeing it's goals play out all at once, and you won't either, but there should be a path to get there that is realistic.
All of this boils down to a "this is where I need to be and why it matters" conversation.
Shared and aligned goals is a great basis for a loyalty type arrangement. People will work hard for others who take care of them and seeing that play out is worth a lot.
Another advantage of goals is there sometimes is more than one way to get there besides cash. Nice to have options on the table.
If it goes well, great. If not, you have your fall back.
You may be able to contract too. Where a company really cannot pay you what you need to realize your goals, perhaps a more flexible arrangement can leave you empowered to do it your self.
This does not need to be a conflict of interest, particularly where you may have more skills not being used, or relationships where you can add value in atomic, easy to execute ways.
Another consideration is involvement with sales and marketing. If you can take some risk, you may find opportunities to capture nice rewards by being part of that process. This takes some people skills, but getting them is worth it.
Ask sales how valuable a tech person who can handle and understand the sales process is. They could be your most potent value advocates.
You help them close a big one, and it directly benefits them. You leaving will present an opportunity cost they will have zero problem justifying.
Of course there are spiffs and such potentially mixed up in this and it all depends on who you are. Taking some risk will differentiate you from other techs and that can be worth a lot.
The first time you walk it is hard. The first time you cultivate advocates is hard. The first time you take risk is hard, and the first time you get a nice increase is hard.
All worth it. Actually it all is as worth it as you think it is. And people count on those things being hard enough and not worth it enough to keep you inexpensive.
What is worth what? That is your primary question to answer. Sort your life goals out, value them, decide on risk and alternatives, and then proceed to have the dialog needed to get you there.
Once you start down this path, you do not stop. It becomes part of you and others will see that mindset and treat you accordingly.
This plants the seeds for future discussions.
Frame this stuff in ways that make them feel good about your comp, not negative.
A cycle or two of this makes things easier and more rewarding fo everyone
if you can't walk away from a negotiation, it's not really a negotiation. if you feel, at any point, compelled to stay even though your interests are not being met in a reasonable matter, you're going to get screwed - and it's your fault, not the other person's.
in a true negotiation both parties are attempting to find an optimum solution that solves for 2 sets of 'peer to peer' requirements. it's supposed to be a cooperative endeavor. if at any point it turns contentious, you back out immediately. the opportunity was never there. it was just an illusion. this is the hard thing for people to grasp.
unfortunately, for most people these are things you learn by doing. "not all that glitters is gold".
For me it boils down to this : I try to be as comfortable walking away as I would be accepting an offer. Otherwise I just don't enter any negotiation phase. Also when expressing salary expectations, I try to aim high enough to be sure they will not accept my initial demand. If they did that'd be a sign I just left something on the table.
However, it can be most difficult to put oneself in a position to leave the table. Developers are in a very privileged position in this regard. For most employees walking away could mean being out of a job for several months and employers know this.
Reminds me of a quote from a G.K. Chesterton book:
> "But surely it is a very old principle of law that a leonine contract is not a free contract. And it is hypocrisy to pretend that a bargain between a starving man and a man with all the food is anything but a leonine contract."
> He glanced up at the fire-escape, a ladder leading up to the balcony of a very high attic above. "I live in that garret; or rather on that balcony. If I fell off the balcony and hung on a spike, so far from the steps that somebody with a ladder could offer to rescue me if I gave him a hundred million francs, I should be quite morally justified in using his ladder and then telling him to go to hell for his hundred million. Hell, indeed, is not out of the picture; for it is a sin of injustice to force an advantage against the desperate [...]"
Sure, free food is great and all. But we're not kindergarteners are we? I'm an adult and I like to take care of my own food (and such).
Free beer and pizza is for helping your friend move. Or for giving a talk at a *camp event. It's not for producing hundreds of thousands if not millions in value for your employer.
I think most people get more value you out of the free food than if they were simply paid what it cost to provide. In the case of free food I see it as where both employer and employee do better with the in-kind perk than the equivalent cash alternative.
But one too often sees perks like these offered as "Well, we're a startup, we can't pay you market rate, but we feed you". And that shit ain't right.
The other problem with free food is that it starts to feel like an obligation to consume it. I like eating out about once a week otherwise I brown-bag it most of the week with yogurt, fruit and some peanut butter crackers. If you make free food a perk (1) I don't feel like i'm maximizing my benefits (2) people start to think i'm not a team player because I don't want to eat pizza/burritos/chinese/indian/<Insert Food Here> five days a week.
Is sitting together and talking about your job ONLY beneficial to the employer? I feel like better communication and more discussion hopefully leading to doing a better job is also beneficial to the employee. Working on a more successful team probably leads to higher satisfaction and better long term career prospects. Even when I've worked in places that didn't provide food, all or almost all of the team still usually ate together, just because we liked what we were doing and enjoyed one another's company.
My point is employees aren't losing anything by taking or not taking the perk. We wouldn't pay someone more not to eat the food. Aside from all the weird bad team dynamics that would cause it would also be a net-loss to the company. When people work from home, we also don't pay them any more, despite that we order less food and they have to buy/cook their own.
Is sitting together and talking about your job ONLY beneficial to the employer?
Eating together can be accomplished through culture alone but providing food is probably easier and more successful.
I have worked at a lot of different companies, and an ad-hoc, employee-organized lunch run is very common. The person who commits to handling the cash and picking up the food decides on the restaurant, orders are placed by a deadline, and people eat it when it arrives. If a manager or admin staffer names the restaurant, they have to say whether the cost of the meal is on the company or not.
Occasionally, someone will name a sit-down restaurant and a time of day, and people simply show up.
People who don't want to participate on any given day don't participate. They eat the lunch they packed from home, or go somewhere else.
That's how grown-ups eat lunch. If this pattern does not arise naturally, there is some dysfunction in the workplace that should probably be solved directly, rather than trying to force the pattern into existence by providing catered lunches.
The company-supplied lunches lead to useful conversations in a place where you are able to judge their utility.
When people from your office go out and do not invite you, you are unable to know who is talking to whom, or what they are talking about. And you should not know, because that would make you a spying creep.
You can't discount opportunity costs. If Oprah was giving away cars to everyone who went out to eat lunch at a local strip mall, you can't reasonably say that a person who found a quarter on the break room floor benefited by staying in the office to eat lunch.
You only observed the conversation that you observed. You did not observe all the potential conversations that might have occurred instead of the one you heard. The value of such conversations is the result of an expected value calculation, based on the potential benefit multiplied by the possibility that such benefit would be realized. That involves a lot of guesswork, obviously.
On a different note, at my company, talking about work at lunch is pretty taboo unless the topic of the lunch was previously disclosed by the initiator to be work-related. Lunch is when we talk about all kinds of other bullshit and only talk about work if we're desperately spinning our wheels on something or want to vent.
Now people just sit at their desk and check Facebook/reddit/etc over lunch — or they break into cliques. As a junior employee, I found that free lunch leveled the playing field. Senior managers couldn't hide out with only other senior managers when you all eat at the same place.
They say that the family that eats together stays together and I think that's just as true for work families.
I don't see a problem with that. If I work overtime I can leave earlier on another day. Quite a lot of my coworkers leave at 12am on fridays.
> We provide free food because we see a lot of value in everyone eating together and employees get a lot of value in just not having to think about lunch or spend the time to go out and eat somewhere.
This is literally saying that your employees get free food so that they can stay at work and only think about work and only eat with people from work...
There's also tons of non-engineering stuff that benefits from being together, onsite. Stray comments might lead to huge import improvements. In my pervious company, there were always large things we'd find out when we'd have team leaders meet up. And this was a small 15 person business!
It takes a lot of directed effort to make remote work. The GP post about wanting people together has a lot going for it.
Define together? What does that even mean? Together in the same room? I'd have to completely disagree. Teams working together is extremely important. Teams _being_ together, as in co-located, is just a preference.
> Peopleware covered it and it was one of the top detriments
Peopleware has ideas that have stood the test of time. However their opinions regarding remote work have not. The tools available to teams and engineers today are far superior to those in 2000 (not exactly sure on that date)
> Something like a 50% penalty in project schedules when teams were remote
This has absolutely nothing to do with remote work. This is just pure mismanagement. You cannot half-ass remote work. It's either a company wide culture or nothing at all.
> There's also tons of non-engineering stuff that benefits from being together, onsite
Like what?
> Stray comments might lead to huge import improvements
Just because you're not co-located does not mean you're just in silence throughout the day. There are a slew of chat clients and voice applications that allow remote teams to communicate easily throughout the day.
> In my pervious company, there were always large things we'd find out when we'd have team leaders meet up. And this was a small 15 person business!
Just because you're remote doesn't mean you don't have meetings. It also doesn't mean you never meet with people in person.
> It takes a lot of directed effort to make remote work
It takes a lot of directed effort to make any company culture work. And what exactly does "work" even mean? I've seen companies that are a complete mess and they have everyone strapped to their desks. Doing remote work right takes no more effort that doing co-location right. You just have to recognize the difference.
It's like saying offshoring development is OK because "project management is hard and you have to be on top off things regardless".
But hey, I'm glad it works out for some people. A lot of my work is done remotely. But for core development or engineering on my own project, I'd want to be sure onsite meetings happened with fair regularity.
We don't tell employees what to think about or talk about at lunch. Sometimes it's work related and sometimes it's just shooting the shit. In either case I feel like both employee and company win.
We also have a good culture around it - people who don't feel like socializing frequently take food back to their desks instead of eating with everyone else, which I think removes some of the issues people take with the idea.
You can adapt to this environment, for example by coming in with prepared messaging of your own, and not meekly acquiescing to their first offer when their second offer is their first offer plus the food they were going to give you anyhow. (News you can use guys: this is also Standard Operating Procedure.)
Disclaimer: I'm married and a father.
The hilarity of maturing. At 19, pizza, soda and video games after work were sexy. At 31, a stable retirement plan is what gets me revved up.
I work at a company with rock solid health, vision, and dental benefits, very good working hours, and I can't wait to get out.
It's full of married employees with children that hope to retire here. It is an excellent place for pregnant women, but no good if you're young or have any kind of ambition.
For example, I was contracting a company that had most of their software development teams working as contractors. About 6 months into contracting there, I learned that they had made a strategic decision to try and hire everybody instead of contracting and the reason they did that was to save on money and more importantly, retention.
So they would ask me to convert, and I would pretty much blow them off for a couple months, and they would ask me again a couple months later. So after a few times of this routine, I knew I was in a better position to start the negotiations. Also, I had waited for several other contractors to convert and got some tidbits from them.
At the end of the day, I negotiated for much more than average salary in my market.
If you're contracting, it pays to be contracting with a staffing firm that knows the decision makers in the company.
I told him that I didn't understand the question and so he said "How much do you need to live on?"
I asked him how much does it take for him to live on? He walked out and so did I.
I haven't tried that one yet, but I find it's still handy to think about as a way to reassure myself that refusing to be the first to name a dollar-amount (baaaad idea) is reasonable.
Successful "techies" never work at companies they don't believe in.
It's quite telling that the author includes this "only if" clause.
1) This is from 2011, it was slightly less of a seller's market for engineers back then. It was still a seller's market, but not as crazy as it is now.
2) The author is one of the top 10 all time contributors to HN. #3 in fact. And I don't think he deserves the snark from the last line of your comment. He's done some pretty cool things and I'd definitely count him as a successful techie.
That said your lackadaisical use of infinity is worrying. You shouldn't just throw it around like that. Most things have nuances. Life in particular.
Despite what TechCrunch and the VC industry would have us believe, it's nowhere near as clear cut as you make out.
This is an odd application of No True Scotsman: http://en.wikipedia.org/wiki/No_true_Scotsman
There are many nonobvious reasons for choosing to work at a certain company, even if you don't believe in the company (e.g. salary to support a family as the highest priority)