Talking About Money
kalzumeus.com
kalzumeus.com
I had a phone screen with an HR drone once (Cerner Inc. to be exact \waves) part way thru she asked me my current salary. I declined to provide that information. She replied "we can't continue without that information". I replied, I'm sorry, but I won't discuss salary at this point. She said, "good bye" and that was all. I had a job so was not desperate at the time. I was still shocked at how abrupt it was.
Add it to the list of things in business that seem to me to be inappropriate/rude/immoral, I suppose.
They know they can say "tell us your previous salary, or else". What's worse is that they will ask your references to confirm, and they'll likely happily tell them. If you lied, it won't go down well.
As if there wasn't enough crap to fight against in your career.. ugh.
EDIT: I forgot about employment contracts that prohibit you from disclosing your previous salary. Yes, they exist.
If you HR put you off, you're not the only one. Externally they will find it more difficult to hire, and internally the real talent will start to notice.
Therefore, you don't need to worry about it. There are other places you can work with good people.
HR: When are you available for a phone interview with me? FSK: I'm available on these days at these times.
Then I never hear back from them again, even after I follow up.
My personal experience tells me there are plenty of people desperate for a job, and that is likely why these HR drones can still do this. I have become so disillusioned even talking to these kinds of people because they refuse to consider talented people when its staring them in the face.
"My last salary was $300,000. Yes, seriously. Is that too high for you? We can discuss this further in negotiations, I'm flexible"
To figure out what number you should cite, look in a mirror. Keep saying bigger numbers. Don't stop until you've got a sheepish grin on your face.
i'm a startup co-founder, i hire all the time.
if i asked someone what their salary requirements are and they said 200k or 300k i'd immediately interview them to see if they're worth that much. i would take it as a personal challenge to see if i could stump them, and if i couldn't, i'd start negotiating their salary on the spot.
some people get paid MILLIONS OF DOLLARS! how the hell d'ya you think they got that much? they asked for it!
people who don't want to "reveal" their salary requirements like it's some big huge secret have probably never hired anyone in their life.
when it comes to this kind of topic on HN, sometimes i feel like i'm taking crazy pills.
If you want $200k but are making $150, just say you are looking for a salary around $200k. If they ask again how much you make presently, you can say "I negotiated my present salary years ago, it's not relevant to the value I provide now, I'm sure you understand".
I'm not going to be pushed into lying and making things up out of expediency. YMMV.
i have not, and i would never in a million years ask someone what they currently make. why would i ever do that? what's the point? you might as well ask them about the size of their genitalia.
the range of bullshit answers you will receive, even from the lowest level of positions, just means you're only fooling yourself if you ask these kinds of questions. just ask for what they want. lying about that won't benefit them, it will only benefit me.
Most engineers want to "stay within the rules", which is why they get walked on.
(I'm not for one second saying you do that, personally)
pushing social boundaries is practiced by all sorts of different people.
Pushing social boundaries is typically not practiced by engineers.
They hired me. I would have refused any offer less than I was asking for. Lesson learned: if they want you they will pay at least market rate.
I also "negotiated" (negotiated, hell. I just asked for it) a raise well above what they offered a year later at my first review.
here's another one: "how will you pay for yourself in 6 months?"
i'm no longer technically competent enough to stump an extremely talented engineer on a technical question. not really sure where you get the 'superiority' language, since i would be out of business if i didn't hire employees who were 'superior' to me.
again - sometimes i feel like i'm taking crazy pills around here.
There's a lot of context that made me assume you were talking about stumping them on technical questions. This is Hacker News and the topic of how to do technical interviews is a frequent focus.
Do people know enough about what you do and how you do it to give this answer at interview stage?
these are just nuts-and-bolts dollars-and-cents conversations people have when hiring non-engineering professionals or executives.
you can talk about all of the above without actually stating how much money you made. it's moot. it's irrelevant. what matters is what they accomplished, if they are enthusiastic about doing the same for our startup, and how much money/compensation they need to feel good about it. i am trying to make people feel good about working for me! the first step is to have an honest conversation about everyone's needs (maybe requirements is a better word).
When you hit "sheepish grin"...go up another two steps. Then practice saying it with a straight face. This is probably closer to your actual market value.
I mean, hell, asking the question is one thing. I can live with that. But turning that into some kind of litmus test where declining to share private information completely 100% immediately disqualifies you, that's insane.
Anyway, never experienced it. Question for you all, are there any negatives to bluffing?
i.e. say you said your previous salary was $110k while it was really $90k, will HR say 'you're overqualified' or something to that extent if they were hoping to pay you say $90k and had a max of $100k in mind?
As in, can you recover from that and say 'oh but $100k is fine, too', or would that also send a signal of weakness where they won't hire you because you seem desperate (taking a $10k cut from their perspective, when you actually get a $10k raise)? Ugh the mindgames! haha. Would love to hear your experiences on this issue.
[1] http://www.nytimes.com/2001/04/05/business/stinging-office-m...
That said, this is a bad idea because it would scare off plenty of people who aren't bluffing about their salary (like me). And there are already employers who will terminate you immediately if they discover you lied in your job application.
I guess it depends on your definition of "very few things" but this list[1] of Unlawful vs. Lawful questions seems pretty long/wide ranging. And I know that the small business I worked for violated it on a regular basis. I actually had it sent out to each person who does interviewing (since the company didn't have a formal policy on training someone for interviews) so they knew what was/wasn't acceptable.
My understanding is that it is illegal to use any of those things to discriminate against someone for purposes of hiring. It's not technically illegal to ask the question, but if you do, and you don't hire the person, have fun in court trying to prove that you didn't hire them for some other, valid, reason. So don't ask them, because there's no upside in it for you.
I did a small bluff to try it out, just 5k above what I was making. The recruiter was surprisingly skeptical! I know I've done an good job of bumping up my salary in a short amount of time, but it was kind of off-putting to have him question it.
Or he was screwing with you to try to drag down your ask. Happens pretty frequently, because their incentives don't align with yours (it's the realtor problem all over again).
My experience with recruiters is they want to know how little it will take for you to accept the job, but this is because they need to know which jobs they should do the legwork on.
If I'm looking for a job I call up several recruiters I trust and I tell them the specifics I'd what I'm looking for and the price I'm willing to accept. I then continue working my network and looking on my own, but now I have 4 times as many jobs and a better chance if finding the perfect fit.
No, this isn't true, and this misconception is explicitly why I invoked the realtor problem. If the recruiter gets paid, say, 15%, the difference to the recruiter between $100K and $110K is $1500. To get $16,500 instead of $15,000, the recruiter risks extra days of negotiation in which the applicant may find another job, or one or both sides passing on each other because of lack of salary fit. In most cases, then, it is in the recruiter's best interest to pressure you to take the job at $100K. Most recruiters are out of the business in a couple years, only a few are in it for the long hall--since he's not going to work with you again, it's in his best interest to get the payout now. Over any length of time, they will make so much more money by you saying yes than you pushing for more money that it's stupid of them not to get you to take the first offer that comes down the pike.
A few recruiters, among them the best ones I've worked with, are in it for the long haul, and cultivate real relationships, but they are uncommon. I remain on good terms with them whenever I can--I've been on job interviews before where I was clearly sent to the wrong job and told the interviewer "look, you don't want me for this job and the recruiter just wasted your time and mine--go talk to this guy, he'll feed you candidates you can actually use." It's worth it, because what goes around comes around, but most are in-and-out and they act like it.
The recruiter wants the largest commission possible and I want the highest salary possible. Notice I said these "more closely align". You are right, it is not a perfect alignment. The recruiter would rather get some commission rather than none. If they are afraid you may take an offer on your own or from another recruiter they may try to get you to accept a lower offer. This is why I work with recruiters I trust and I establish clear non negotiable guidelines up front. "I am looking only for promotional level opportunities. My current salary is X; do not trouble me with positions unless the salary is paying a minimum of X + (X * .3)".
With this type of relationship we must establish clear guidelines. If we fail to stick to those guidelines then it is on us.
In my own interviews going out of collage, I was told by peers about the offers they were making. I got asked what I was expecting to get by employers and told them around $80K because thats what my peers were getting and I consider myself to be on pretty equal ground with them and most companies scoffed at it. But then I got an offer of $95K and then they had to raise their own offers up to match. Its a ridiculous process to go through.
A key insight is how many salaries do you negotiate in your life - 10? A professional recruiter does this 10 times per day.
Negotiate.
Well, I am a lawyer, and this is also not legal advice.
To lie and accept a job offer whose salary is predicated on the lie would constitute fraud. Lying about your former compensation history is no different than lying about a prior criminal record, if the counterparty relies on the false assertion.
There are a bunch of jobs with ethical requirements so lying is probably going to cause problems.
Disclaimer: Not a lawyer, not your lawyer, but fairly confident based on past experience with this over ~15 years.
... unless, like patio11, you decide to blog about your salary history at some point.
The problem with lies is that you need to remember what they were so that you don't contradict yourself later.
patio11 is unusually (yet refreshingly) open with his financial information.
If you're going to blog about your intimate financial details, you should of course "have your ducks in a row".
Don't be -- I don't think there's any correlation between the quality of a comment and whether I respond to it. ;-)
If you're going to blog about your intimate financial details, you should of course "have your ducks in a row".
Right, but once you've lied about something it's impossible to put that particular duck back where it belongs.
So Bob and Anna are equally qualified and currently paid 50k. They both apply for same job and Bob says he has a (fake) PhD and is paid 50k and anna does not lie about qualifications but says her base is 100k
Most of us would say Bob has committed an illegal act because the link between qualifications and hiring decision seems so clear. But there is a very weak link between previous salary and hiring decision, so how far must the company prove that it uses prior salary in hiring decisions? Just the fact that it asks? The fact it only offers prior plus 5%? That prior salary is used to rank CVs?
I am not so interested in previous salary. Rather, I always directly ask "what is your salary requirement". I think it is good business sense to not underpay what people think they require, though sometimes this means we must pass on what could otherwise be good employees, so requesting moonshot salaries is definitely a filter for us.
Furthermore, when I ask applicants their requirement, if they just deliver a number to me using logic that does not include salary levels at previous jobs to justify, then I evaluate how close it is to my budget target for the position, and if feasible, I make an offer at that requested level.
However, if the applicant uses a previous salary to justify their current salary requirement, and it's a lot higher than I expected or had targeted for the position, I have on a few occasions offered jobs with compensation to match previous salaries, so long as applicant proves to my HR they are not lying about the salary.
So far, all offers I’ve made predicated on proving their salary claims, my HR has proven the applicants were lying to significant degree, except for one person. Those that were caught lying had job offers rescinded. The one person that wasn't lying only lasted 90 days because he clearly couldn’t add value to justify.
From my point of view, the best strategy for negotiating a higher salary is to get in front of a person that cares if you can help them make them more money than it costs to pay you, regardless of your previous salary (an HR manager is usually not the person that cares about this). Then present a clear vision to them for how you will deliver that added value.
Just pay what the position is worth to you. The only reason to negotiate is to pay less than the position is worth if possible.
The reason is that sales people make most of their money on commissions in most places, and checking how much they made in commissions in previous years is the simplest way to figure out how effective they have been in past positions.
There is an altogether separate discussion about whether commission heavy compensation works better or not though.
There are ways around it but it seems most people go with "my base was XX.... and that's one of the reasons I'm out there looking to change jobs."
Do you mean in Japan or the US? Because you certainly don't have to do that in the US.
> From there it's trivial to calculate your previous salary.
And even if you did do it in the US it would be impossible to calculate your salary from it because it depends on how many exemptions you claimed in your W4 (which you can change at any time - it doesn't have to be how many children you have, it's basically a number to fine tune how much tax you pay so you don't overpay and need a refund).
Are you referring to Japan?
I've worked in two states in the USA and never been required to produce such documentation.
You can give them sufficient detail without handing over your P45 or income data. I have never given a P45 to a new employer and it has never been a problem.
It's possible that your tax code will reveal some information, if you're still in the same financial year, but this is an unreliable way of calculating salary.
(It just occurred to me that if there was "an app for that" in this case, no parent would ever be able to trust their child's report card again.)
Make it look more or less like the original. As long as nobody sees the original next to the mock-up, who's ever going to notice that one or two digits changed?
Regarding gossip, "Would you trust a company who checks up on someone's previous paycheck?" seems to quell that pretty quickly.
Well now there's the rub innit?
I get the impression that a lot of companies out there either don't have that mentality (thinking cheap is enough) or don't know how to actually do good hiring.
The good thing about this kind of reaction is that it helps you filter out that kind of company you wouldn't want to work for.
It's bullshit, especially for those who began their careers during a time of salary deflation.
However, the right employer will NOT base your future salary solely on your current. It should simply be one data point in the process - your value as an employee should be based on a multitude of factors. This isn't pie in the sky; many of my clients do have a compensation system for employees and end up paying fairly.
Discussion on reddit: https://www.reddit.com/r/programming/comments/34q8cl/do_not_...
Hahahhaa, I like that you even all-capsed "lying". Give me a break.
I've talked to a number of folks with inside knowledge for a couple different regions and it's quite possible that they're simply not budgeted to pay for that role and they just can't politically negotiate that while meeting certain fiscal commitments. If I started a company right now and bootstrapped, I can't pay someone market rate at all and expect to be in business a year without taking outside funding, so that's just reality.
That is actually not true. This kind of employee low balling is condoned behavior.
I applied for a position at Automattic and had Matt Mullenweg (CEO) pull this on me.
Everything seemed to have gone perfectly well - everyone involved in the process seemed impressed with my abilities but when it came to this point and I declined I was told "I seem to be senstive about being Indian" out of nowhere. I don't know where that came from.
In a climate where most companies are afraid to disclose quite reasonable reasons for not making a hire, it's remarkable that someone would think this kind of comment is appropriate.
Jesus. It's amazing to think someone who's worked so long in the tech industry can think like this. If anything, we're the ones who should know best how little race means when you have the skills to get the job done.
a) I am Indian, and until now had largely thought that we were largely a privileged class within tech, if not outside it -- and consequently weren't affected by race issues within it.
b) All of the articles about how oh-so-wonderfully Automattic does their remote work had always led me to believe they were a forward-thinking, "good" company. If they are bringing up race in an interview it completely destroys this perception.
First, I'm sorry that at some point in your hiring process you got that impression, it is not in line with our philosophy or our actions. We now employ 320 people in 36 countries and with at least that many distinct racial or ethnic backgrounds, including Indian. We aim to hire another 120 in the next year so disqualifying potential candidates based on something they are born with is not just morally odious, it's logically flawed and not something I would tolerate in our organization. (We even help host events like http://accelerate.lgbt/ .)
This is also why we have a distributed model -- we wanted to create a company that where someone chooses to live is not a barrier to them doing great work at Automattic.
The words you put in quotes don't look like something I'd say, and also unusual for my interactions with potential candidates in our hiring process (which is described here - https://hbr.org/2014/04/the-ceo-of-automattic-on-holding-aud... ), if you're willing to share the date when we chatted or any other info I'd love to review my transcripts and understand the context if that was an actual quote, or if it's not I'd like to see what I said that gave you that impression it was a mistake on my part and I want to avoid giving that impression again in the future.
To summarize: Automattic wants to employ people of all backgrounds and regardless of their geography, and I personally believe there is no connection between a person's background, Indian or otherwise, and their ability to be an amazing Automattician.
Our culture is really built on two-way trust: since we're distributed and seldom see each other you don't know how someone is going about their work, and most of our HR policies come down to the honor system. The company places an incredibly amount of trust in employees, and vice versa people place a great amount of trust in the company, including that we'll do our best to treat them fairly. It's a responsibility the folks on the operations side of Automattic, including myself, take very seriously.
If knowledge of a candidate's previous salary doesn't influence your offer, why do you ask for it and what do you do with it?
We base compensation on market data, value to the company, and what other people in a similar role make, we also ask what people made in the past and where they hope to be in the future. This does not determine their salary, it's market data for us, and the future part also makes sure that Automattic is a place that can meet their long-term goals and expectations, or if not that's discussed up front.
I've had this conversation about 400 times at this point, while people can sometimes be sensitive around compensation, it's like discussing a health issue with your doctor -- I've seen and heard it all and it's part of a normal days work for me. It's sometimes the source of a nice surprise, as we've had people who've doubled or trebled their salary when joining Automattic which always brightens my day. We've also had people take a small or substantial cut when joining, which isn't ideal, but we determine salaries as I said above, not based on what they say they previously made, and it's good information for the company to have because hopefully one day as our business or their contribution to it grows it'd be great to have them at or above what the market said they could make someplace else. I can only think of only once someone has not joined because of compensation, an engineer at Yahoo who had compensation 3-4x beyond what seemed fair in the market commensurate with his skills or experience.
The OP advice of not saying salary might be appropriate at other companies, I'm not privy to their compensation practices, but it is not correct at Automattic. A few folks in this thread suggested lying, which I would disagree with in any circumstance, much better not to answer -- lying in response to a factual question demonstrates low integrity and most employers, including us, would not want to work with that person.
Automattic is one of too few companies that tries to treat people who live in different countries the same, which is an important distinction from treating people who are from different countries and now live and work in the US the same, which of course every company is legally required to do (though there are still some serious issues around pay equality and even gender, to start). Many companies explicitly try to have offices and hire people in countries where the cost of living and wages are lower to save money; our thought is that the internet makes that obsolete and over time enlightened companies will pay people what they're worth regardless of where they live.
There have been about 5 times someone hasn't wanted to share, every time because they think making a low amount in the past (at a non-profit, in a country where wages are low) will lower their offer, which it doesn't and I try to re-assure. One case comes to mind in 2012 of someone who had attended Stanford but moved back to India because didn't have a visa, and was worried their geography would mean they were paid less, in which case I would have said to not worry about the fact that you're in India because that doesn't matter to Automattic -- if I gave the impression that it mattered whether you were Indian (or any other background) I apologize. We did end up hiring this person and at a similar salary to someone in the Bay Area doing a similar role, though there were some complications with them wanting to be paid to a US bank account, in USD (we try to pay people in the currency of where they live so they're sheltered from forex shifts), and travel to work in the US, which our attorneys advised us would create issues in absence of a work visa, which the person didn't have. They ended up only being with the company 9 months, the last few on a performance plan, but that was based on work after they had joined, not anything to do with the interview or compensation process, just sometimes there isn't a mutual fit. (Over the past 10 years we've had about 60 people be let go or leave, it's definitely not personal.)
Not sure if that was the same person as nodelessness, but if so I feel very bad you thought any of that had to do with you being Indian, and I'm happy to chat or discuss more to clear it up. I also hope the information and context above helps any one who is considering working at Automattic know that we'll do our darndest to create a comfortable and fair environment for everyone.
1. As a hiring manager, knowing your previous salary will not impact my decision on your value. 2. As a hiring manager, I insist on knowing your previous salary. If you do not want to discuss it, you must not trust us.
In many countries the employer does the employees tax, and they will be able to see how much you earned in that calendar year. Being hired under false pretenses is fraud and means you could be legally fired at will at any later date.
People in the USA might be used to this (since this is very common), but in many places with actual employment law, this is a bad deal for the employee.
Of course, that's only if you lie to them. If you just don't tell them the salary, then they only find out after you are hired and hopefully have a nice proper salary.
Funny enough I ended up getting an offer way above my current salary, and a bit more than what I said I wanted.
Is anyone here a recruiter and can shed some light as to why the hell these people are so adamant about getting my salary??? I'm wondering if part of the deal for them is if they don't give my current salary to HR they won't get paid. That seems really stupid but they were acting like they would let me walk if I didn't tell them my salary.
You can also note that while this may not be the answer the interviewer is looking for, it does represent the kind of discretion that the company is likely to appreciate in the event that you do take a job with them, then eventually go elsewhere.
If pressed, you can say your current pay is "unsatisfactory", and let them know that's what they can list on their form. You can add that you know the company has a range, that they're in the market for the skills you have, and that you're unhappy enough with your present number and long-term prospects to hear their offer.
All this should send a pretty strong signal that, pay aside, you're not in any immediate hurry to leave your current position, so trying to chisel you down to something close to your current number is just a waste of everybody's time. It also signals that lowballing you now means you'll probably move on sooner rather than later, which is something most HR departments prefer to avoid.
If pressed further - after all that - see the question for the red flag it is. This is probably not a company that has much interest in supporting your growth or professional development. Unless you're desperate (i.e., going nowhere is a better alternative than crashing hard) keep looking.
You can end the conversation on a positive note by saying you do understand policy, that you wouldn't be there if you didn't think the company had a lot going for it, and that they know where to reach you. If they can just find a way to keep you from having to compromise the privacy of your existing employer, you'd consider jumping ship.
If this doesn't produce a callback and you happen have friends who are already there and who want to see you hired, you can share the details of this exchange with them, and let them know why you ended the conversation with HR. Chances are, they'll be pissed. If they want you badly enough, and have the clout to pull rank, they can be sure that HR finds a way to accept your silence regarding your current pay.
Infighting 101.
I really like this advice! Thanks for the tip. I'm stuck being [possibly...] underpaid at the moment and struggling with how to address my current salary without tanking future offers.
Assuming your deflection doesn't end the conversation, the fact that you can hold your ground calmly and polity, yet firmly and clearly will probably cause the rep. to opt for the high end.
And this company was a very small and fast growing firm that would require a lot of hustle and assertiveness. My entire in person interview process was based on a case study that took 12 hours where I spent a large part of that arguing with my results/reasoning. So I don't think that holds.
This is a fallacy. The recruiter would rather fill the role as quickly as possible and move on to the next mark.
The recruiter's choice is: wait for you to negotiate and maybe lose the role; or act as an agent for someone else.
So... They are interested in providing candidates that are, in as many parameter's as possible, within the employer's range -- and towards the favorable end.
As to the ur-child-level idea that "good CEO's" will "clamp down" or whatever the term was on this practice...
"Good CEO's" generally have NO interest in tackling the details of HR policy except when they are quite visibly causing problems and/or a big, bold initiative sweeps them into its fold ("Mind the Gap", or whatever the flavor du jour is).
HR is a... well, in many ways and all the more bureaucratically so in larger firms, a nasty, detailed business. Endless quantities of compliance. "Fair" as a tool of constraint as often if not more so than enablement. Secrecy and emotions and politics, all needing to be whitewashed.
The kind of details CEO's don't want to micromanage, and that the smarter ones know to stay away from -- or at least, at arm's length.
There are individual exceptions -- some brave. But looking across the landscape of business, I don't think is there is any great movement to buck HR and attendant policy. It is a bureaucracy now well rooted in and growing from a depth and maze of regulation and law. Not all of which is bad -- worker safety and y and z and... have been much needed.
But, don't expect your average CEO to "go there".
Atleast that is the case in Australia. When we contract we bill the recruiter whop bills the client.
It's just one data point in determining whether you're a qualified candidate
1) Why would I waste the candidate or the client/employer's time if there's too large a gap between candidate's salary & their highest potential for this role? The company has a budget, candidate have a minimum; let's get this out of the way - it would be terrible if the interview process went swimmingly only to find that the candidate wouldn't budge under $125K and client wouldn't exceed $100K.
2. Finally: it's not a huge deal if candidate prefers NOT to provide salary; sure, it makes you feel a little uncomfortable. If that's the case: no worries, but then I do ask that the candidate gives me a 10% range for their current salary & expectations. Again, employer just wants to know that we're potentially on the same page before wasting time.
3. Literally 95% of my software engineering candidates have no qualms about sharing their salary. The other 4% will at least give me a small range. These candidates that challenge this minor issue end up being more trouble than they're worth in other ways too; it's a red flag. (next stop: "no, I'm not taking a coding test").
Again, there are ways around REQUIRING the salary #. It should not result in a candidate or employer walking. Oof!
It's trivial to solve this problem for a recruiter by simply stating the company budget range upfront. The problem is that recruiters want the client to give up their information without revealing any of their. That is where the asymmetry of information come into play and engineers end up getting the short end of the negotiation.
Speaking of red flags: organizations that think people who have basic negotiation skill are too much trouble to work with.
Someone's current salary is none of your business, it's that simple and as a block of reasonably intelligent professionals we could simply all agree to never supply that information to the company hiring.
Note that almost all of the risk at the time of a job change is already born by the employee, the employer using a recruiter is actively looking to dislodge employees elsewhere and has a few tools at his/her disposal to effect this.
Since recruiters are paid by the future employer they should be considered an extension of that employer and in no way are they to be taken to be independents or objective, their job is simply to dislodge you for the minimum amount required.
If you want to know that your employer and the candidate are on the same page then why don't you, the person initiating the contact disclose the range of salary offered plus or minus 10% so the prospective employee can decide whether or not you're on the same page? That's because you'd like to snag them for a little bit over what they are currently making, and you'd be happier if you could deliver a 'gem' well under the budget your employer has set aside. You might even get a bonus for that.
If 95% of your software engineering candidates have no qualms about sharing their salary then that is what should change if you continue to game the process by asking such questions. What a software engineer makes is their private information, and asking for it is just another means of price-fixing between employers.
And those candidates that challenge that requirement are not more trouble then they're worth, they are the only ones that apparently understand your game enough to not be easy marks and that is why you feel they are more trouble than they are worth because it isn't easy money.
You did forget that there are 2 types of recruiters: agency (outside) and corporate (inside).
I, the agency recruiter, do not want to "dislodge" the candidate for the minimum amount required. Not because my fee will be higher with a greater salary, but because I'm actually incentivized to do what is best for both the employer & employee. This is called sales. When you do good by all parties to the transaction, it pays dividends long-term.
So, no, we're not trying to "snag" them. I appreciate your paranoia, as you're not alone; many people dealing with bad recruiters probably need to vent.
But for the most part, your perception of the recruiting industry is different from the reality.
1. tell the employee what salary range the employer is willing offer, or 2. ask the applicant for their desired salary level.
The current salary is NOT your business. If the applicant earns 1x salary now and wants 2x salary and decide to look for a new job that offers that, how does it help the applicant to tell the recruiter that he earns 1x in his current job? You basically ask the employee to play a cards game but have them all in the open for you.
"This is called sales". Yeah, involving an engineer lacking any business skills and two weasels.
That's my personal opinion based on personal experience. Feel free to attribute it to others but the echo chamber does not factor in there unless you wish to consider my office part of the echo chamber.
> Yeah, lots of bad apples out there,
Present company, as always, excluded.
> but ask any reasonable professional: a good recruiter is extremely valuable.
A good recruiter is a good recruiter for their paymaster. I've yet to see 'reverse headhunting' where you submit your resume to a recruiter and they then go out to find the best possible position for you. So for now recruiters are exclusively working for companies looking to employ people.
> You did forget that there are 2 types of recruiters: agency (outside) and corporate (inside).
I've dealt with both, neither group to date has me particularly impressed. And I've dealt with them both as an employer and as someone who somehow made it onto the list of recruiters. Clueless wouldn't begin to describe them, they used to have a joke saying that 'those who can do, and those who can't teach', you could probably amend that with 'and those that can't teach recruit' and it wouldn't be too far off the mark.
> I, the agency recruiter, do not want to "dislodge" the candidate for the minimum amount required. Not because my fee will be higher with a greater salary, but because I'm actually incentivized to do what is best for both the employer & employee.
And what is that?
> This is called sales.
I don't particularly care about what you call it, to me it felt more like interacting with a class of buzz-word wielding vultures trying to make money from placing people based on an extremely limited understanding of what makes the tech world tick.
There are multiple ways to make money in any industry: you either dig for gold, you sell shovels to the miners or, in the case of the recruiters, you sell the miners to the mining company.
> When you do good by all parties to the transaction, it pays dividends long-term.
Yes, I'm sure it does. In the long term your loyalty has to lie with your repeat customer, the corporation that hires you. Since you are not going to get any repeat business from the individuals that you've placed (unless you're willing to risk that long term relationship, but there are plenty of other recruiters that will be more than happy to play the game again).
> So, no, we're not trying to "snag" them.
Said the fox to the chicken.
> I appreciate your paranoia, as you're not alone; many people dealing with bad recruiters probably need to vent.
So, many people dealing with bad recruiters on the one hand..
> But for the most part, your perception of the recruiting industry is different from the reality.
And yet my perception is different from reality. That's an interesting concept but I can't fit both of those into my head without significant cognitive dissonance.
Either my experiences match those of others and the venting has - as you apparently confirm - a basis in fact or my perception (and by extension that of all the others complaining about their experiences with recruiters) is wrong. You can't have it both ways.
And you conveniently forgot to address the main point I made and instead latched on to my 'perception issues'.
--I've yet to see 'reverse headhunting' where you submit your resume to a recruiter and they then go out to find the best possible position for you.
Yeah, this exists - they're "agents" for software engineers (for example). But it's rare and not sustainable.
---In the long term your loyalty has to lie with your repeat customer, the corporation that hires you. Since you are not going to get any repeat business from the individuals that you've placed (unless you're willing to risk that long term relationship, but there are plenty of other recruiters that will be more than happy to play the game again).
You forgot one thing: reputation. If you do best by your client AND candidate, then your candidate sends your referrals, eventually comes to you when he/she becomes a hiring manager, etc.
---I don't particularly care about what you call it, to me it felt more like interacting with a class of buzz-word wielding vultures trying to make money from placing people based on an extremely limited understanding of what makes the tech world tick.
I've heard this before, usually from less level-headed software engineers. Like I said, sales is a different business - we do different things than you guys. I have repeatedly watched as techies have tried and failed to transition into recruiting. There is an extremely low correlation between tech savvy & recruiting success. Recruiting is a people business.
The underlying theme here, again, is that you're lumping every recruiter into your personal bad experiences - like I already said, some are good. That's not a valid approach in this situation.
Ther are jobs I'd take at half my current salary, and jobs I wouldn't take at 3 times my current salary. In an interview situation I'm happy to provide a ballpark figure as to not waste time, but I won't provide my last salary (my tax details are public!), and I won't negotiatiate salary until I have a good bargaining position.
If the company is willing to pay €80k, and you were on €50k, then they can offer you €60k and tell you how great it is that you got a €10k raise!
It's all a way for them to pay you les.
I've just learned to say that I want to find out what you guys think is a fair offer and left it there.
After a certain point salary moves little and stock moves a lot.
This worked until I reached the last phase of the interview, the salary discussion. The HR person simply refused to proceed further without the current salary information, as a matter of fact when I told them they should be paying what I'm worth, he said they can't proceed without it any cost. I wasn't interested in the Job so I didn't care, but they seem to count on the fact that given so many programmers out there they it wouldn't matter to them if they would lose a candidate even that late in the interview phase.
In short if there are many devs out there looking for a job, there will always be some one willing to work for a lesser pay.
Needless to say, I don't waste my time any longer when a recruiter asks. I just say "here's what I expect".
https://www.linkedin.com/pulse/should-i-reveal-my-compensati...
10 years.
So I provided it to them, and one of the companies (who was out of business) could not verify my salary (Pay stubs were not enough, they had to talk to someone).
After this they said they may have "adjust the offer accordingly" and it would most certainly be less because the offer was based on my stated salary at the time.
As most of you are probably guessing, I declined their offer and withdrew myself. Ever since then when they ask my current salary, I don't give it to them.
I would think that at this point they _are_ interested in bringing you on. Then you could go in different directions:
"I'll be glad to discuss my salary requirements at the appropriate time, would you please tell me first how badly do you need me? more about ... say work-life balance, employee rotation, non-monetary perks, whatever...
"Let me tell you about how much more value I bring to my work, many times over salary, which I am ready to do for you, because your great company really prizes the beneficial effect I'll bring to the bottom line."
So you're answering, things they want to hear, not exactly what they asked, but better, for you and for them.
I should listen to myself now. (Edited formatting, structure)
It doesn't happen often [at least for me] but it does happen. I have similar issues when I decline to put an "Education" section on my resume. Both are groups I'd prefer to avoid, personally, but you do need to recognize there is a certain percentage of people that won't work with due to their process.
> What is your current salary?
> I make minimum wage, plus founder equity current valued at $X Million over the next few years.
I soon made it clear to the recruiter (who was very nice and understanding, btw) that previous compensation comprised of intentionally-minuscule salary and startup equity with funny-money valuations would not be a good proxy for my value-add. Worked out fine.
1) It's about gaining intelligence - not in a nefarious way. If enough candidates at the right experience level are giving me a range of $90K - $100K and the client still won't budge beyond looking at candidates in the $60K - $80K range, I can eventually come back to them and say "Listen: of the last 10 candidates you liked, their salaries were..." A smart, reasonable client will make adjustments.
2) In rare cases: a "rockstar" candidate may be able to get 10% more than the budgeted amount, for example. So I would hate to send you that $80K tops message if there were potential for a perfect match. Then suddenly you're no longer interested and we missed a grand opportunity.
Again, I agree with you for the most part. But ultimately, the recruiter figures: 99% of candidates give their salary number or a tight range, upfront, without issue, so there's no harm in asking for reasons 1 and 2.
It's interesting ("gaining intelligence") to read an account of recruiter allegiances, though.
Also, I discovered recently that companies cannot talk to one another about salaries, but they can all participate in a "survey" where the surveyor aggregates all this information, in a very detailed way. So, every company knows exactly what the other company is paying, even in a different industry. I guess that is another way of fixing price.
Didn't work a few times, which I was fine with as I didn't want to jump ship. I really just wanted to get off their list. Then, a few contacted me again a month later saying how they found me the perfect fit.
Boy oh boy did they ever.
The 'data collector' asked me my current salary and I refused to state it. She became very hostile saying "How are we meant to negotiate for you if you won't disclose what salary you are on?". I told her to let me negotiate my own salary.
https://are-we-being-underpaid.herokuapp.com/
It generates unique URLS for each participant and stores almost nothing on the server. Only a party that was actively monitoring web traffic has enough information to divine someone's salary. No tracking of emails, salaries, etc.
Source code here https://github.com/pipermerriam/am-i-underpaid
I think publishing salaries has several benefits. For one thing, it removes the used car salesman approach to hiring. One result, which is more important, is that it can help eliminate wage disparity due to differences of gender or level of negotiating skills. It can also help prevent the corrosive effects that can occur if people do find out actual numbers (the morale-sapping that you discuss).
The problem with this approach, and one I'm trying to figure out is, what about the non-developer jobs? Assumedly, each group gets their own matrix. But if the admins can browse the matrices of the other groups, like the development team's, then there can be a similar corrosive effect. One option is to only discuss the salary matrix within your group and with HR. But then we're back to a different version of the tired old story. (Don't discuss the matrix outside of your group!) This leads me to believe that it's best to be completely open. It might also serve as an incentive for people to make an effort to grow into different areas. Any ideas appreciated.
I love it because it removes any problem with politics or shadowy discussions, and I know what I can expect when a promotion comes. The only downside is that it leaves the firm with little leverage when it comes to compensation: I can't simply get a bump without a promotion, nor are there extra bonuses that can be given out either for hiring or retaining. (This has its benefits as well however.)
These companies work really well for the median employee for all of the reasons you mention - especially the air of transparency. But I think it makes it nearly impossible to properly compensate top talent.
Second, most companies don't pay bonuses. Those that do usually have a bonus pool that depends in some way on the company's success in the marketplace, and they can almost always abolish bonuses at management's discretion. A good rule of thumb is that the more you need a bonus in a given year, the less likely it is that there will be anything in the pool. Don't even think of budgeting for a bonus. Ever.
Knowing what you're actually going to get as long as they keep you on is the right information. The other thing you'd want, which is very hard to get, is how likely they are to keep you on. For public companies you can read the 10Qs and look for news about layoffs, but it's much harder to discern how secure you will be at a smaller/private employer.
HTH.
Signed, A Veteran of 2001
IMO, equity is a great benefit. You might not get the most comprehensive benefits package, or you might work more hours at early stage company. Instead, you get equity.
There are downsides (lack of control of share price, and some freeloading) but for startups it's a great tool. The effectiveness shrinks a bit for large firms.
Companies succeed by being in the right place at the right time, being lucky, having good connections, and having leaders who make the right decisions. If any of those is missing, failure is certain. If they're all present, failure is merely likely. As a rank and file employee, you can sometimes cause a very small company to fail but you can never make any company successful. You're just there to execute; execution is at least somewhat necessary but never anywhere near sufficient.
The idea that making my economic outcome dependent on so many factors over which I have no control whatever is not merely expedient or regrettably unavoidable but explicitly fair would be silly if it were not so abhorrent.
If an organization like Youtube/PickYourUnicorn sells for a billion plus dollars with only a small handful of employees, all of which are talented and have put in long hours, would it be fair for only the VCs and founders to see the upside?
In a sense I view equity as a shared call option.
If you still think there's a problem here, pay market wages and let anyone who chooses come along on their own dime on any subsequent funding round at fair value. No vesting/expiring options, no stock grants, no look-back, no discount, no limits, just the opportunity to be an investor -- in the moment -- on the same terms as everyone else. Just make sure (non-)participation is 100% confidential. I think very few of your employees genuinely want to be capitalists, but those who do should have to put cash on the barrelhead like everyone else.
It may be a sucker bet in a lot of cases. But expected value (given how hard that may be to compute for unicorns) isn't always the best bet either given vast uncertainties.
Probably not the smartest use of money, but they see it as paying for entertainment - not a retirement plan. I thought that was an interesting insight.
At my most selfish, I'd say, "At least this is one tax not paid by me." The downside is it does seem to use gamification to put the burden on those who can bear it the least.
To the parent to your post: look, when you're picking a job, you're essentially buying the stock with your time, if not with part of your comp. Unless you're a true W2 mercenary, you should accept upside at a discount like tptacek's hypothetical.
So the GP got burned in 2001? That's a dumb reason to swear off all exposure to life-changing upside, forever, no matter what the expected return.
Unless you are a mercenary or shark who has to keep moving, think like a savvy investor first. Then indulge your preference for the type of work. And only after all of that worry about the W2 money.
Successful companies will breed opportunity to do the kind of work you want. Successful companies will also build your equity and increase your base rate to eventually catch up to market. Growth will create professional opportunities. Pick based on the prospects of the company first.
ITT people are too focused on the salary negotiations that patio11 brought up, and not enough on the aspects that build true wealth. Don't get trapped in local optimizations...you have to create exposure to outsized upside. If not through equity, then through side-projects and entrepreneurial activity.
I didn't get burned in 2001. I watched a bunch of people who thought they were rich suddenly realise that not only were they not rich, they were also out of a job with no prospects, through no fault of their own. I wasn't personally harmed; I rather enjoyed paying 40% less rent and spending half as much time commuting. Nevertheless, it was a magnificent learning opportunity for a young engineer, just as the bursting of this bubble will be for others. For anyone who prefers to learn the easy way, the takeaways were:
1. The market price of your equity is determined by almost every conceivable factor except the merits of your own work.
2. So few companies succeed in a way that makes your equity of life-altering market value that you should approximate the probability as zero.
3. You will not live long enough to accumulate enough wisdom to beat the market; that is, you are not better than average at identifying early-stage companies that are much more likely than average to be successful as in (2).
4. More generally, humans don't live long enough for buying variance to be a good strategy unless you are desperately poor. Otherwise, sell variance any time you can do so ev-neutrally. If you simply must buy variance, pay as little ev as possible for it. Flips and roulette are good; the lottery and buying stock on margin are bad.
"Life-changing upside" changes very few lives, even fewer deservedly so. If we lived 100,000 years, it might make sense to take a few thousand gambles on early-stage startups; the variance would mostly work itself out, and after a while you might even be able to tell who's likely to succeed so that your choice of employers would be +ev. In one 40-year career, forget it. The path to true wealth consists first of an inexpensive lifestyle and second of salary maximisation. Higher ev, lower variance.
(first paragraph edited for tone)
But the to larger point above - what I meant in Glassdoor is they only capture base salaries. Not that they're not inherently invaluable. Otherwise you'd see a lot more outsize #s for banks.
There's no reason for the owners of the company to give up any economic interest to people who can't directly influence outcomes. There are too many things that have to go right between a rank-and-file employee doing something right/well and their equity being valuable to them: the entire chain of command, whether the company has the resources to execute well, whether the company's suppliers and partners come through, whether the sales force is compensated properly, whether fads and trends in the market are favourable, macroeconomic conditions (both natural and man-made) and when all's said and done and the quarter's numbers come in, whether Wall Street analysts are in the mood to drive up the company's stock price (if the company is private, add in whether the investors want to go public and the market for IPOs). Conversely, the company can be lucky even if most of its employees are deadweight; you end up rewarding a lot of people for nothing, and those who actually did something will resent how much wealth was transferred to noncontributors. People aren't stupid; they know all this. Having equity doesn't make them feel more empowered, it makes them feel less so: it's just one more part of their economic lives they can't control. And for that reason, equity doesn't operate as an effective incentive, doesn't make people feel valued, and I would challenge anyone to prove that it improves outcomes for the company's owners.
With a few fairly obvious exceptions, the overwhelming majority of your employees are much more worried about (1) keeping their jobs and (2) bringing home more cash than about some pie in the sky payday that will almost certainly never come. If you want to reward someone for a job well done, give them a bonus or a raise. If you want your company to be seen as a great place to work, don't do layoffs; you're the capitalist, you take the risks. When things go well, you pay a market wage for labour and keep the rest; when things go badly, you should pay a market wage for labour and take the loss. You're the one making the decisions that led to things going badly; if you don't like taking the loss, make better decisions. If your employees wanted to live or die based on whether a company succeeds, they'd be founders. They're not; you are. Offering equity helps no one; it costs you money and control if things go well but, again with a few obvious exceptions, doesn't help you attract or retain better people. If you want to offer people something they'll appreciate, offer them a secure job for satisfactory performance and above-market pay for above-market work. Those who so desire can use that pay to buy their own stock or lotto tickets.
If you publish salaries, then aren't you just shifting the negotiations to which salary bucket you deserve to belong to? So instead of absolute money, now we're negotiating with fluent tiers based on other employees salaries (John makes 200K and I'm closest to John in terms of ability, so let me convince you how similar I am to John).
It will always comes back to demonstrating your value.As a developer, you're capable of creating logic that can literally scale to bring millions of dollars of value to a company. Stop talking about PHP. Stop talking about Rails. Start talking about the money you make for your company.
Who care about the middle-aged white male programmer who's too introverted to ask for a great compensation? Who cares about the woman who's too timid to assert herself?
They're their worst enemy. And it's not your problem to wait for the rest of the pack to get their negotiation-shit together.
More money on the table for you.
There's so many opportunities for devs right now (take a look at the recruiter emails sitting in your inbox). Learn a little bit of negotiation skill, and you're better than 80% of your peers.
Demand what you deserve. Take your kids on an amazing adventure. Buy the home you've dreamed of. Save some money and only work 6 months out of the year. And don't apologize.
> Able to emulate a 1200 baud modem using just your mouth (with error correction protocol) well enough to upload a GIF picture to Compuserv
:D
A question though:
1. If I've had conversations in quarterly reviews that involved numbers but nothing was ever formalized, are those numbers open to renegotiation in a formal conversation?
2. How do I ask for equity and how much should I ask for as the first hire (technical employee of a non-technical founder)?
Edit: I'm aware the user who posted this is not the author, but I'm hoping patio11 or someone else comfortable offering negotiation advice will stop by the comments section.
I do agree that for negotiation purposes, considering pay below market value is a good point for discussion. But don't get offended if it is not weighted as heavily as people who actually wrote checks.
If you choose a $90k job + equity over a $130k job, and the company tanks 2 years later, you've lost every dime of that 80k.
It's a bit different since your "investment" consists of 24 tranches, but that's more than balanced by the vesting schedule which gives you nothing for a year (despite accepting your investment immediately), and takes it all away if you stop investing.
Those are exactly the same thing. Pretending otherwise is asking startups to rob you.
If you have a reasonable salary, equity is just a cherry on top, but if an employer tries to get you to trade cash today for a startup lottery ticket, say no.
This is especially important early in your career given the time value of money. An extra $10k/year in the first five years of your career, properly saved, could add north of $600k to your retirement when you get to that stage in life. That's an almost-certain payoff against a roll of the dice on a sliver of ever-diluted equity.
I'm well aware that:
a. Startup equity is a lottery b. As an early employee and the accompanying biases, I'm especially ill equipped to judge it's value.
With that in mind, I'm negotiating salary first. Equity with a vesting schedule is something I would treat purely as an incentive for continuing to stay with the company and not as a replacement for salary.
This is excellent advice. Cold hard cash is much, much better than a bet of the startup you are working for will take off.
Although perhaps north of $600k is a bit too optimistic, you'd need a solid 6.4% inflation & fee free ROI on that.
In any case it's important to look at it in 'today's dollars'. For example, the S&P 500 did 20x in the past 40 years (roughly the length of a solid full-time professional career), so $10k could have turned into $400k if following that index. But in the 80s inflation went up to 15% causing devaluation, that 1975 dollar is worth about $4.5 today, meaning that $10k turned into perhaps 9x more purchasing power. Of course that's before all the fees get involved. Even if you'd get $600k by your retirement age, it likely will be the equivalent of less than $200k today.
But yeah 6% per year isn't crazy. If you manage to scrape together $50k in your fund by age 25 and work until 65, 500k is very doable, north of 600k perhaps optimistic but who knows what we can expect. Perhaps we'll see gigantic returns once we get 4 billion people on cheap mobile computing, free wifi in the sky, access to modern education, 3d printers, drone deliveries, digital money and a graphene industry haha. But historically speaking $600k is tricky!
Either way, doesn't change the fact this is great advise.
The Equity / RSU package from many big (publicly-traded) tech firms can be as much as 30% of total compensation. I generally account for this portion the same as "cash with a discount" -- when negotiating for my current role, I used a 30% discount on the present share price.
For startups... it's a mixed bag (as saryant mentions).
But it's helpful to know that large publicly traded tech companies can offer as much as 30%. If or when I do choose to work for one, I'll keep that in mind.
Obviously the negotiation will go differently if we're talking about, say, RSUs at ExxonMobil which are as good as cash once they vest.
It still comes with some risk obviously, the startup could end up not going anywhere and you not learning much. But it's not nearly the risk of rolling the dice on equity.
That may not be a bad deal, but there are some warning flags that it raises:
* What does the non-tech guy bring to the table? Do they have hard evidence of their ability to make a company successful?
* This is well worth your time to read: http://jacquesmattheij.com/first-employee-or-cofounder
1) It promotes mediocrity. 2) Creates a political cesspool. 3) Ties the hands of hiring team.
1 - Excellent people want to go places where they can make more. When excellent people learn about public salary postings the first thing they will worry about is the perception of other employees. I suspect they will just avoid conflict and work somewhere else. Really think about the current open salary systems: state governments, federal systems (cia, fbi..), school teachers, college systems, military..
2 - Will you help the "next" person above your salary grade? Why? Your goal is to be higher than he/she - so this promotes extremely bad behavior. This is how yahoo is setup. People will be trained to create little moats to protect power, inflate budgets, hide data, hurt other employees.
3 - Really want that new hire? Well, now you have no negotiation power. If you pay this employee salary X. Anyone who gets less than X (Call this Y) will be pushed down in the employee chain. So now, instead you want to minimize Y. Sublimity, you will hire less and less capable people to avoid conflict with the current team.
The issue with engineers is that we don't do that and are bad at negotiations. Once at job people rarely look out unless they realise that they are grossly underpaid. This may be true for other job profiles like sale/biz-dev etc where the day to day jobs hone their skills for best deal extraction.
I suspect the engineer to not be there Monday.
2. Businesses need to ensure that their workers are focused on product quality over internal politics. That's a failure of culture, full stop. These internal politics, if not focused on individual salaries, can instead focus on project head count, building fiefdoms, etc. In short, if you fail to manage internal politics, you'll have these problems regardless of whether employees know what they're getting paid.
3. Yeah, capitalism's a bitch, huh? Funny how all of the 'power of free markets' rhetoric dries up as soon as it's turned back around...
Somewhat more seriously, this mainly shows that you need to peg employee salaries to a minimum of market rates, so that they aren't unhappy when that new market-rate hire comes on, and then go above this minimum based on performance. It's not that hard.
Conferences, tech meetups etc I'm usually the first to be championing developer solidarity and pushing the message that we can and should all be demanding more money, everywhere else I try and keep it low profile to not rub peoples noses in it.
I have a lot of non-tech folks ask me about money (when they ask me what I do and if it pays well) and I always try to avoid giving numbers and go with a more generic 'I can't complain, things are ok/good'. I earn a lot (and I mean a lot) compared to non-tech folks where I live: 20x difference in some cases. I had a friend recently in a conversation mentioning that buying X (one of those cheap android tablets for kids) as a birthday present was 3 days worth of her work. In my case, it is less than 1.5 hours of my work.
I'm very happy for earning these values, and I try to give back when I can, pick up the bill here and there (enough to help, but not enough for people to resent it) but I know we developers are quite lucky with the luck of the draw we got in this little slice of time and IMO, we should be more considerate of others in these cases.
I post photos on Facebook from Tokyo or Berlin and sometimes wonder if I'm pissing off my friends.
I don't think you should stop posting photos from your trips just because you are 'afraid' you will be pissing off your friends. They can always unfollow you (or whatever FB allows you to do, I'm not big on social networks) if they find it 'offensive'. I just think it is a balancing act between sharing parts of your life, and sharing absolute numbers or boasting.
Anyone that knows me for more than 5 minutes, knows I'm doing well (I live in a nice place, in a very expensive area for example and I don't hide this), but at the same time, I avoid letting (outside of very close friends) people know how well exactly. I never talk about money or salaries or what not. That doesn't mean I won't invite them over for dinner/a swim in the pool just in case I 'piss them off'.
If hirer has an equally good candidate or consultant who quotes a lower rate: you're out of the running. Even if you're better, you have to be better value according to the employer's own assessment.
There are few employers who are price insensitive and you have to be in an overwhelmingly lucky or privileged position to find them.
That's why, if possible, you negotiate when you already have another offer. I negotiated a +50% annual pay raise at my last job because I was completely willing to walk away for another job.
I also got the raise because I was playing an important part in a high value project at that time. I felt a bit guilty about the possibility of leaving the project in the lurch, or negotiating when my value was at its highest. I thought it would lead to resentment from my managers if they thought I was strong-arming them.
But they agreed to the rate, and never showed resentment. Every successful business person or trader knows to sell high, but sometimes the rest of us forget.
> If hirer has an equally good candidate or consultant who quotes a lower rate: you're out of the running.
If you can easily be replaced by a new hire or a consultant, you don't deserve the higher salary.
You shouldn't and you did well. Whenever you have a position of strength and the business can afford it, you should exercise it. Simple. This is business.
If someone is willing to rescind an offer because they are upset that you tried to negotiate, it's probably not someone you want to work with anyway.
Yes. Salaries at Buffer might be transparent but also quite low.
If for example, you know company X's highest paid software developer makes $110k, and the lowest makes $90k, (and such a narrow banded salary range is probably likely if everyone knows exactly what everyone else earns), you probably aren't going to get them to pay you far north of $110k simply because that would carry the likely result of increasing everyone else's salary since they now know you are making more than they are and they want a salary increase too.
But the lack of transparency should really go both ways, ideally if you want to get the best terms. That is, if you can inflate your previous salary or not disclose it at all while asking for a number significantly above it you are in a much better position than laying bare your entire earnings history.
This is exactly why salaries _should_ be transparent. Skill at negotiating salaries, unless you are an agent, is not a relevant skill. If you are an engineer, for example, the company should not be rewarding or penalizing you for your salary negotiation skills.
The reason lawyers/agents/salespeople are good at negotiating is not merely that their job requires it, it's because they have developed that skill.
A corollary: those who know their worth also far exceed those who don't.
Totally agree with you.
Sure, it’s possible to get better at negotiation, but why require that? It’s quite pointless.
Also, this seems like a good solution to several thoroughly and inherently unfair (because sexist or racist, for example) wage gaps.
So it might actually be better for society if the range of potential income is much smaller, because individuals in such a society would spend less time on skills like negotiation, which are not directly productive.
Depending on your outlook on life and how much anxiety the knowledge about income differentials causes you, the situation can look very much like a prisoner's dilemma.
Understood, but division of labor is largely gray and only really gets divided when you move up the income chain (ie, the wealthier you are, the more things you can pay others to do to free up your time). Why learn how to make your bed or drive a car since technically you could pay other people to do those things for you? Professional athletes, musicians, and actors pay agents to negotiate their deals for them because they have much more at stake and it makes sense to bring on somebody who is an expert in contracts for specialized fields since its almost certainly a net win for both parties (talent and agent).
Unfortunately, engineering doesn't really pay enough to warrant bringing on an agent to negotiate on your behalf. So people can choose to wish that complete transparency existed and that we all make the same amount at each level of ability, or they can choose to accept that the job market is just that- a market. If you accept a salary of a certain rate and on certain terms, you are selling your services at an agreed-upon price. Just because somebody else asked for more and got it, doesn't change the fact that you were happy enough with the amount you agreed to work for and got it.
So really what we are talking about is wanting happiness with the amount you are paid regardless of whether it is enough to meet your personal needs. If the next person is making 10% more than you, then suddenly you are unhappy. There was a famous psychological experiment that actually verified this same thing- that people would generally be happier to make less money so long as somebody else in the same position isn't making more. That is not a net win for employees. In fact, those who can negotiate up their pay are probably helping the entire field of employees in that domain, since even if you are the bottom 50% of wage-earners in a high-paying field you are doing better than if everyone's pay remained stagnant at a lower level.
Transparency benefits the company for this exact reason.
There is a non-zero cost (headache, dollars, what have you) in leaving an organization. This means that salaries can be at market rate, drift below, and people still may not see enough value to leave.
Good negotiating means you will always see market rate or above. Transparency means salaries will drift below market rate until someone deems you worthy of a bump.
Buffer salaries are outrageously low: for that reason alone, I would never advise anyone to work there.
I'm all for talking about salary to everyone except co-workers. Knowing what you can make elsewhere gives you power to negotiate or move. I know what my engineering friends make, I know what they are getting bumped to after reviews, I know what offers they are getting and the same goes both ways. Knowing what everyone makes internally would just cause trouble I think.. At the least I would imagine it would limit my options to only companies that can afford to pay everyone top dollar..
EDIT: It's non-trivial to go from consulting to product development as part of the same business. It's often easier to use the money from consulting to start afresh.
I also have a quirky relationship to money as a goal. Rather little would change about my life if my salary increased by $800k. My hobbies would remain books, video games, taking my wife and daughter on walks, and posting too much on HN.
Overall, is it that being closer to the product feels better? And did you really shake all the "weird feelings"/impostor syndrome about charging a high rate?
It's not scalable in any shape or form. Despite having aspirational goals early on, every consulting company falls into the trap of becoming a body-shop. It happens every. single. time. You begin to feel less satisfaction about your services and proposals to clients because you emphasize "our talent speaks for itself" and it's polarized by your clients desire to simply want to pay X for Y and don't care how, what, or who delivers it. Being a one-man shop means that right from the beginning your client's expectations are set on you being the right man for the job and they'll get Y because they're going to pay you X. At scale (I'm looking at you IBM, Accenture, etc) you end up fighting with cost center budgets, and spend more time trying to squeeze quality and scope within a set budget, or risk overspending budgets and end up looking like a bad services partner. Building a consultancy sounds awesome at first, looks awesome at first, and then it slowly burns you down.
I enjoyed the process of scaling Matasano; I only left because Erin and I were more engaged with the idea of making a dent in recruiting.
Things one does to scale consultancies:
* Refine a recruiting and hiring strategy to make it easier to staff larger number of projects.
* Build ramp-up processes to take new consultants and get them to "billable" status quicker.
* Play with service definitions and rate books, so that clients that need Patrick-level delivery can pay extra to get it, while clients that just need deterministic competent execution of tasks Patrick was good at 5 years ago can pay less to get someone without the name brand.
* Develop systems to cross-train consultants so that more people get an opportunity to (a) watch Patrick deliver a project, (b) deliver a similar project themselves, and (c) help bring other consultants up to speed.
Because revenue is so directly tied to performance and delivery in a consultancy, I think it's a pretty good lab for learning how to effectively manage people.
It's also true that a lot of them just turn into body shops.
For me, at least for the forseeable future, I'm pretty solidly convinced that I can earn more money by studying and improving my tech skills than I could ever earn by taking a side-job that actually pays me dollars in my hand.
Maybe one can "max out" and just know enough to get their job done, but I'm not there yet -- I frequently find myself ditching other opportunities for making short-term cash in favor of learning something new. That's why I would favor "building" over running a less profitable software business.
If you're curious "How does one turn a $20 million a year SaaS company into a $22 million a year SaaS company?", there exist many options depending on the specifics of the company and virtually all of them are doable. For example, if you increase the rate at which the SaaS company closes deals by a modest amount, that could reasonably hit that by itself. You could do that by some combination of A/B testing, better email marketing, tweaking sales processes, etc, alone or in combination. I've blogged pretty extensively on all those topics if you're curious.
These are not necessarily all that technically complicated. If you can figure out ActionMailer, an if statement, and a for loop, you have every technical capability you need to be an engineer in charge of email marketing. The interesting bits are "What emails do I decide to send?", "What words go in those emails?", and "What goes in the if statement?"
The actual work is exactly as dominated by meat-and-potatoes execution ability as you think it is.
Here is the amazing thing, he also did all of us a huge service and wrote it up and put it on the internet for everyone to find!
If you haven't yet, spend as much time as you can diving in his blog. Every post he's written is worth the price of admission, but you could definitely limit your search to the ones that focus on the SaaS sales and marketing aspects.
$2K or so per day was more routine for reports on a variety of topics (competitive analysis, strategic options, etc.) Expert legal work is probably in the $400-$500/hour range.
I've charged $20k/week for consulting and it was week here or there, not for the whole year. But I may be wrong.
Completely agree with this, though I made a mistake that was even worse than this. A friend hired me a couple of years ago to join his small company as the first developer, during which I disclosed my salary and also mentioned that I was willing to take a pay cut (as I wasn't happy where I was, and he was a tiny company still finding his footing). Fortunately, he matched my salary, so I didn't end up making less money as such, though it also didn't take into account of the value that I brought to the business, being the only developer on the team.
As a result, it certainly feels like I've sabotaged myself, where I should be making more than I am, with the only solution being to find better compensated employment elsewhere despite being reasonably with my current role.
I used to believe in this adamantly, however recently I think it requires a bit of refinement.
First, it depends on where you are presently. If you are in a job you really don't enjoy or are not performing well in, for whatever reason, your top priority is finding a job that better utilizes your talents. A lot of people believe that once you start a job at a certain rate of pay, you can't negotiate it up significantly because you will always be anchored to that initial amount. That isn't really true. Once you start if you perform well you become a valuable asset, and companies don't like to lose valuable assets. One option is to find another company that will offer you the amount you want to make and take it back to your company and ask them to match it. Very often they will and without much argument. However the important thing is to start.
Now if you are in a job you enjoy and have no real desire to leave except pay, then you definitely should not disclose your salary, as you have a powerful negotiating position as you really don't need to move. However if the company is really pressing you to give them a number and won't move you on unless you do, it's okay to tell them the number if you are up-front and steadfast in that you are looking for amount $X which could be 1.5x, 2x, or any multiple of what you are presently earning. If they claim they can't match it then move on.
Finally, never negotiate salary with a recruiter before meeting with the hiring manager. Many times (certainly not always) recruiters do not know much about the job requirements besides what was written by the hiring team in a bulleted list. They don't have the authority to grant salary requests, but in many cases hiring managers do. I have had several job offers come in well above what the recruiter told me the job paid. No matter what you are told the salary range is, if a team really wants you, they will pay to get you.
This is terrible advice. If a prospective employer asks how much you are making, respond with your desired salary at minimum. If they are serious, the negotiation point will be that plus whatever raise you claim to be looking for. If they want paystubs, you seriously don't want to work for them, because no professional should suffer that indignity and they're probably turning away great people as it is. I've only had one company ever ask for paystubs in my career and I got a weird vibe from them early on anyway.
If you can lie convincingly, lying might be an effective negotiating strategy. Lying convincingly here generally involves you knowing as much about the job market as employers do, though, and that tends not to be the case: employers talk to 10 people for every 1 hire they make, and so they get a pretty good snapshot not just of the field at large, but of what other people at your current firm make.
Lying unconvincingly is a very poor strategy. It broadcasts both naivete and insecurity to your counterparty, both of which are exploitable characteristics.
Also, you can use recruiters to your advantage. Give them much higher salary demands (i.e. 20-50% higher than your current wage). They'll come back to you if they find someone willing to pay. If they question you, then the reason you're expensive is your specialist skill-set.
To those who don't know, most large companies already have a structured pay table. Try working at AT&T or McDonalds, and you can probably predict where your salary will be in the next 5-10 years. Real negotiation for most people in most positions mainly happens in small firms and startups.
Lack of salary negotiation will only scare away well qualified candidates who don't fit some arbitrarily made rubric (which will almost always back out to years worked, which is a terrible standard). Imagine if by paying 20k extra, you can get one of those mythical "10x rockstar" engineers. Would you remove your ability to hire him?
By opening up everyone's salaries, it will only hurt the startup culture, as it will only make people dislike each other. I often found engineers and business development people devalue each others work, in large part because neither party can understand the work of the other. Imagine them knowing each others salaries! Each side can find a justification on why they are being under-compensated while the other over-compensated. Startups need cohesiveness to survive.
Lastly negotiation is a valuable skill in the workplace. Interviews reward people who can handle stress and negotiate. Imagine a shipping date is imposed upon you, and not all the features can be included. You're going to want a leader on the engineering team to negotiate with the strategy makers to find an equitable solution. De-emphasizing negotiation is de-emphasizing a critical human skill.
On the other hand, once you have that, people will start actually thinking of their peers in terms of being high- or low-ROI...
This is completely true, though perhaps not for the reasons you put forth. "Startup culture", as it currently exists, is a mechanism for VCs to consume recent CS grads who don't know how much they're worth and extract as much value from them as possible before they get a family/house/realization of how they should actually be compensated. Startups and VCs use their information asymmetry as regards salaries to exploit this inefficiency in the compensation market.
Imagine if by paying 20k extra, you can get one of those mythical "10x rockstar" engineers. Would you remove your ability to hire him?
You haven't removed your ability to hire them at all by being transparent about compensation -- you simply now have to be able to justify that to your team. If you are unable to justify it, that should tell you all you need to know about what "10x" means.
Recognizing that someone is tricking you by using guilt to convince you to suppress your own salary is the first step of learning how to negotiate effectively.
First off, transparency != lack of negotiation. It just means that your colleagues might be able to see the outcome of that negotiation. Even with salary bands you still need to determine where in the band you land on day 1, and those bands are often wide enough (10-15%) to allow quite a lot of flexibility. Also, most "large corporations" will have many job descriptions and titles indicating seniority: an Engineer II will have a wildly different salary band from Principal Engineer, leaving plenty of room for negotiation on hire.
Second, there is basically no way to determine that someone is a "10x" engineer (if such even exists) via an interview. Decades of studies across the industry have shown that interviews are a terrible means of assessing potential performance, and unless you've worked with someone on an essentially identical product in a similar company before you can't predict their output now. (Also, see above re: strawman argument about not being able to move $20k for an exemplary candidate.)
Third, if you can't build trust across teams (with or without visible salary info) you have much deeper problems than your comp being public. Fix this before everything else. If you're building "cohesiveness" by implying to your staff that every other teams makes less money (and is therefore less valued) you're setting yourself up for real problems down the road.
Finally, salary negotiation is a very different beast than feature and scope negotiation. The former assumes a selfish if not antagonistic stance ("get as much as I can") while the latter should be collaborative ("deliver the best possible outcome given our constraints"). People who are good at the former may or may not have the empathy and vision needed to deliver on the latter.
And it would benefit the employees of the company, who are disadvantaged because they only negotiate salary every now and then vs the hiring manager who does it all of the time, and who also has insider information on what the company is willing to pay and what everyone else in the same position is earning.
For an employee, knowing that your company, and probably your manager, reduced your income simply because they could is not very good for morale and loyalty to the company.
...some arbitrarily made rubric...years worked, which is a terrible standard
Totally agree with you there. Structured pay tables have to be based on more meaningful metrics than seniority and job title. I got glass-ceiling by that for a long time because I didn't want to switch from development to management, and my company (CTO and his toadies) didn't want to let me join the Architects group.
...engineers and business development people devalue each others work...Each side can find a justification on why they are being under-compensated while the other over-compensated.
That's true, but the business development people tend to be more highly compensated, work fewer hours and more regular schedules, and have much more political power within the organization. It'd be better if there were objective metrics for measuring everyone's value that both sides could understand, so they don't devalue each other. Everyone doesn't have to get paid equally in order for everyone to get paid fairly, and if a startup can cultivate a culture where everyone feels they're being treated fairly, they're going to be a great place to work.
Interviews reward people who can handle stress and negotiate.
Also people who are good at "faking it until they make it" and other techniques that work well for interviewing but not so much for doing the job. I don't think taking the salary negotiation out of the interview would reduce the stress level much, or the interviewers ability to judge how the interviewee handles stress.
You're going to want a leader on the engineering team to negotiate with the strategy makers to find an equitable solution.
No, you want a leader on the engineering team and a leader with the strategy makers to collaborate on finding the best solution for the company's needs. There should be no negotiation involved at all. This is mathematical constraint-solving, not deal-making.
Can you explain this a bit more? Because poor negotiators are paid easily half as much as good ones in this industry, but the amount of my value that hinges on my negotiating ability is somewhere between 0 and 1%.
Objection 2: To the extent that perceived relative pay is the variable that actually matters for determining how happy someone is with their compensation (ask someone in NYC versus someone in Mumbai with the same cost-of-living-adjusted salary how rich they each feel), then releasing salary information can be welfare-reducing even if it does cause salaries to rise in general. This is one of the strongest arguments opposing income inequality: the existence of very rich people makes everyone worse off by making them _feel_ poorer.
Related hypothetical question: If every worker were paid exactly proportional to their actual productivity, how much would the standard deviation of labor earnings increase? (http://econlog.econlib.org/archives/2015/04/meritocracy_ble....)
Paying people proportional to their productivity is one measure - paying relative to marginal contribution is probably more accurate - so a CEO of 100,000 people who manages to get them all to work 1% harder has made quite a valuable contribution. Edit: this presupposes the PR / in house magazine publisher is not really Responsable ...
The people who are hurt the most by keeping compensation info secret are precisely the ones that need the information the most - folks from low income backgrounds, people worried about making more than their parents, etc.
As a practical tip, one thing I encourage everybody who's a client to model their equity grant in a simple excel spreadsheet. You need to know
* your strike price * preferred share price * company valuation * total # shares outstanding
As a rule of thumb you can assume your shares are "diluted" (that is your total % ownership relative to valuation) will decrease anywhere on the order of 15%-40%) after each funding round depending on company's performance. Plotting this beforehand, along with where you believe the company will end up, will give you a great sense of what your equity is worth.
[Source: I founded http://OfferLetter.io - We help engineers and other tech workers get what they're worth. If you're interested in free data, you should join Offer Drive (http://offerletter.io/drive.html to learn if you're paid fairly]
Sure, there are issues of status and perceived worth around salary—but hiding the numbers doesn't help. People still know your job title, understand your company and see your lifestyle. That's more than enough! Numbers only matter if you want to talk about relatively small differences—ones that matter far more for salary negotiation and evaluating a position than they do for cocktail party
Now, perhaps I'm just being simplistic, but the way I see it is genuinely simple: markets are about transferring information. To do this well, participants have to know what the prices are elsewhere. An arbitrary cultural taboo around the prices does nothing but impede the flow of information. The fact that it's asymmetric just makes it doubly worse.
Transparent salaries are about as capitalistic and idea as can be.
Unfortunately, by character, I'm also unlikely to take my own advice: I fear awkwardness disproportionately. Just one more reason why I deeply dislike arbitrary social rules.
Just go buy a salary survey! The information will be far more detailed than just random salary tweets from people in different roles, with different capabilities and different experiences in different cities in different countries.
Hey, someone doing my job in San Fran gets $200k! I'm going to go and ask my employer for that! A quick check of a salary survey might sober me up.
Also a salary survey is far more potent data to present in a salary negotiation to convince people to pay you what you want, rather than "Someone on twitter said...".
1- https://docs.google.com/spreadsheets/d/1F9e8DrWv5_rx3il0r2Sg...
If it's higher than we can pay, then we say sorry we can't pay that. If it's way lower than we would expect we usually tell them that we wouldn't expect to pay less than X for their skills and experience.
This has worked great so far because if someone came back with a really low number and we just took it, then a month later they will realize they undershot and then they feel awkward about bringing it up - so, best to avoid that.
My ethos is: Pay people enough for them to not think about money. If you are only working for me for the pay then it's probably not going to be a great working relationship. They are better off going to work at megacorp where they can sham.
Also, to follow Patrick's advice - if someone doesn't give the answer but instead asks the same question to you - "what's the budget/range for this role? ", do you answer honestly?
As for the second question, yes I always say what our budget is if asked.
I'd love to have a notion of what the real work rates and long-term rewards our for our industry, but it's so hard.
Also, I note that nobody here is sticking their username next to their salary and equity stakes. :P
At even smaller companies you can be co-founder with substantial risk and associated rewards if it works out well. It's basically a risk management issue, if you don't want a lot of risk and a reasonably high pay with a potential upside you can't beat the giants, if your needs are small and you can deal with the occasional loss it may pay off to gamble.
Patrick, was that already well known? Do you have any plans to discuss that experience?
There is sufficient information there for a buyer to calibrate to some extent what X is from the author's response, assuming (a) the offer is reasonably close to 2X and (b) the author displays no unreasonably nonlinear discontinuities in emotional state as the offering price is varied.
Thanks.
It's not specific to the questions you ask, but it might answer some of them.
We live in Japan, as opposed to the US, mostly because I've been there for my entire adult life and kind of enjoy it. We might at some time decide to split our time between the US and Japan.
I wrote a long blog post about doing business in Japan which talks about running a SaaS company here in more depth than I can reasonably go into in a comment: http://www.kalzumeus.com/2014/11/07/doing-business-in-japan/
But can we apply this to the skills we'll need for starfighters.io? It's very easy to point to money (or even companies) lost by data breaches and say "I can help you prevent this", but the money you save may be whatever they pay for breach insurance or it may be literally everything they own. Case studies and deliverable targets (+millions of dollars from SEO and stuff) are really great when they're positive, but how do you negotiate this when you're selling protection against income loss?
* This interviewer is comfortable talking about their salary
* This interviewer is comfortable talking about diversity and equality efforts
* This interviewer is comfortable talking about the visa and immigration process
* This interviewer had children during employ and is comfortable talking about the process
As an interviewee, knowing that I could ask direct questions instead of skirting around issues due to trying to be sensitive would drastically improve the experience.
It is great for employees, but not all companies are ready to do that, and I would guess most would not surive the moment of truth.
I don't think it would be very useful, because you'd get people on low(er) salaries who are great at saving/investing and have a high networth, and visa versa
The liabilities side of the balance sheet is less complicated: I owed $22k in student loans at graduation, paid that off, incurred a fair bit of debt back in ~2013 (raided the 2012 tax fund to pay for my wedding and then 2013 ended up being radically less lucrative than expected), and anticipate paying it off this year.
Although props if you are conservative enough not to even entertain the thought of counting unhatched chickens. That's responsible, disciplined behavior. The kind that gives you the confidence to go launch Starfighter...
Japanese startup culture would be a terrible niche to try to make any money in.
so far they've all said yes to what I considered very high.
> I’m not a Marxist —
Yes, you said that in the opening sentence... Americans are very defensive about coming off as "Marxist"/"socialist".
But 'patio11 is not a politician and I expect his language reflects strength of feeling more than anything else.
Yeah... strength of feeling of being perceived as "un-American".
So basically, a software dev announced a Twitter campaign on a Silicon Valley startup's website. Naturally, it only hits Hacker "News" when some white man placates fellow uninformed ideologues with "I’m honestly troubled by joining a Marxist movement on May Day".
(Translating #talkpay into market theology — is this analogous to how Soviet commissars made bold ideas safe for consumption?)
BTW: May 1st commemorates the Chicago Haymarket affair, where workers went on strike for the 8-hour day. And four anarchists were martyred by the state via hanging.
Today with all the shrill American feminism, other women have been denied a voice in this debate and nobody from outside America is posting in that twitter hashtag or blogging about how they are suffering WIT while earning >90k dollars per year.