Salary Negotiation
kalzumeus.com
kalzumeus.com
It's funny - probably the best advice anyone ever gives on negotiation is exactly the opposite of "don't name a number first." It's "anchor high." You should be anchoring to a number that is high but realistic, and negotiating from a position of strength. This is especially true for senior- and late-career individuals who have some experience under their belt.
I very much agree with you and my other comments in this thread are very much advocating for this position. I'd just like to add an important caveat by saying anecdotally in multiple occasions I've seen friends (notably people who are just moving in to the Valley from elsewhere and/or right out of college) tend to widely underestimate the "realistic" estimation in your advice (they know in abstract that salaries are "high" but don't necessarily concretely know how high), and therefore following it can be dangerous and would mean lowballing themselves. Hence, not saying anything might result in a better net result end of the day.
Similar jobs in similarly-funded companies at similar stages should yield a pretty strong dataset of numbers by which you can construct your own ask. Easier said than done, for sure, but if you can - gather data!
I'd like to know how high is high in SV. Especially for junior positions.
https://news.ycombinator.com/item?id=11314449
As a skilled junior person without having/being known for specific connections/expertise, probably the best generic advice, if your goal is purely optimizing for salary $$$ [and I wouldn't blame anyone for this, but I'd say there are many other factors to optimize for as well], is to get offers at various places, while making sure at least a couple bigcos are included, and play the standard negotiation game (they don't really negotiate with you; they negotiate with each other over you). Also, don't be afraid to jump ship early on when you get a better sense of the numbers you can command and avoid inertia. Inertia can be a big hinderance, especially very early on when a recent decision with much less data is made; a course correction might be essential.
P.S. people who make the real $$$s, don't do that by optimizing for a (risk-free) "salary" taken from an employer, so always keep that in mind.
- new grad: ~175k
- 4 years: ~300k
- 6 years: ~350k
I say $220k total comp and that I will count equity but if it's not liquid it won't be worth much.
I base that off of what I would get at Google or Facebook (including equity).
I've asked around and most companies take it seriously.
For junior engineers, I would say $160k. For mid, $180k - $200k. Again, total comp. Equity counts but at my value, not theirs.
Started at 107.5k with promotion and raise to 120k
Those who do know their relative worth are already playing a different game than the former, and will probably be able to reap more advancement and value than someone "getting lucky" by having a company mess up and issue a highball offer.
When entering a negotiation, you should know your worth and be able to articulate your reasoning behind it.
In my experience, it's much easier for me to articulate how I am going to create value and justify my compensation than it is for the counter party to justify their beliefs I am not worth what I say I am.
Usually, if diplomacy fails, it's because the entire team is anchored at a comp range that I would never consider. In that event, though, the counter party has done me a valuable favor: I do not want to work with individuals who are paid less than me.
When I was speaking about "worth" before, naturally one must scope their estimation to the market they're trying to sell to. Market worth is only what the market is willing to pay for something.
If you've got a broad, valuable skillset, but a company can only use 10% of it, they can rightfully scope the role and issue an offer or decline to issue an offer.
What isn't okay, though, is taking the scoped offer and then performing in a far wider capacity - that is the very essence of being undervalued and/or underpaid.
Most people are much better off to simply ask salary ranges as the first question for a recruiter. Don't put it off and don't waste any time. Approximate location should the next question as again it minimizes wasted effort.
Either way, I don't talk numbers first and I still don't waste time with places that can't offer the sort of salary I'm after. I'm not going to even bother with a phone interview if I don't have a firm number in hand.
Take this as an example:
Say you currently make $80k and you want a 10% bump. So you're looking for $88k. Take that number and add 15%. Your ask is now around $100k. They may say something like "we actually start all new engineers off at a base salary of $85,000". This gives you a ton of power in negotiating just a $3k bump. If you had said you wanted $88k, that "starting salary" would have likely been $75k. Thus making it a pretty big leap to the $88k you wanted.
Establishing a position of strength can also mean other things like having the company and hiring manager invest as much time as they can in recruiting you; not hiring would be worse to them than over paying a little.
Also, having other offers on the table always helps negotiating better. Even if its never mentioned to the recruiter I just happen to negotiate better with the mindset that I have other options.
Playing the game like you've got nothing to lose is what breeds the best. This applies to a lot of subjects.
Hypothetical situation time. I'm a job seeker and my minimum acceptable salary is $100k. You're a recruiter and your range is $80-$120k. Neither of us know the others' number.
If I make you say a number first, you would start at the bottom of your range. (Why not?) Now I'm "negotiating up" to my minimum.
Alternatively, I go first and anchor at $150k. Now it's much more difficult to lowball me at $80k, and we'll probably "negotiate down" to your maximum.
The key with this technique is setting a good anchor. Too high (e.g., $200k) and you'll just walk away. Too low (e.g., $120k) and you'll whittle me down because you know you can negotiate.
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Bottom line is knowing what you're worth and quickly testing whether you're in the ballpark. If you go into interviews without having a sense of whether the company will give you a competitive offer, you're wasting everyone's time. (And you have a bad HR department.)
Don't use ranges: the employer will hear the lower number. Just say, "The market rate for this kind of role is $150k base. I'd look for a competitive overall comp package, and we can talk about salary, bonus, and equity. Is that what you had in mind?"
You'll get one of three answers:
1. "Yes, that's in range." (And you can probably negotiate up.)
2. "No, that's too high. We were thinking $x." (Now you know where you stand, and how far apart you are. <20% is negotiation. Note that if they don't give you $x, don't give another number: you're just negotiating against yourself.)
3. "Ehh, it's on the higher end, but I think we can make this work." (Might actually be #1, but otherwise means you're in the sweet spot.)
There's lots of advice in this thread to "know what you're worth", but where is that signal coming from?
In addition to highest published umber + 20%, I would advise to carefully read any stated salaries on message boards like this when they come along and pay attention to the highest numbers. Then you will be aware of what is possible.
Anchoring is merely a technique: the first half of my post boils down to "it's ok to throw out the first number".
I've had a negotiation where I found out that the company was only able to make $2.5k after paying me + overhead (contracting on predefined rates) after they led me on and gave me an offer that met my low number barely after bonuses with zero stock. I rejected multiple times and a VP even called me by the end. That should have been the sign to walk honestly. Evidently, some places have no negotiating power fundamentally because they have no intrinsically compelling work with substantially below market rates and with little means to negotiate up their value proposition to improve their circumstances.
The other point I have is that the first number isn't all that important. Yes, it might anchor the starting point, but you'll be in a stronger negotiating position when the written offer is actually made.
I just went through this recently. Yes, their hiring manager asked me what my requirement was for a salary and I gave them a number without any fuss. In their first formal offer, they gave me the number I wanted; however, by that point in the hiring process, it was clear that I was a top candidate, and with other competing offers, I was able to get them to come up another 30%.
In the end, I don't think the best approach is to force the company to make the first offer. They aren't going to give their best offer if you force them to make the first move. The only time that strategy might make sense is if your best number is much lower than their worst number; in that case, you did a lousy job in the research phase and need to take a step back.
If you disagree with "a professional knows their value," what are you arguing? That "a professional doesn't know their value?"
A professional might know their value abstractly or concretely to some companies, but in general value is relative to the company's needs, funding, and priorities. The recruiter has too many data points that you don't have to argue that going in with a fixed number is wise.
And even if you can do all that, there's no reason why the dollar value you put on your worth to them has to be similar to the dollar value they have in mind. You could argue, in that situation, that you may not want to work for a company that doesn't value you "properly", but I hesitate to believe that there's always (or even often) an objective version of "properly" that disinterested observers could agree on.
Having said all that, I am still not sure I buy into the idea that the best negotiation tactic is to evade (even "professionally") providing a number.
The key phrase here.
Always try to get multiple offers! If you can, you're in a much, much stronger position.
I view it instead that I am offering a service. I am well aware of what my service is worth, what my financial needs are and what amount would make me feel satisfied with what I am being paid. So I tell them that number.
I also tell them that the number is only negotiable in the sense of benefit trade-offs. I have built into my "price tag" such things as medical payments, etc. If they can offset some of those from salary to benefits that does not bother me. In the end my needs are met and I am happy.
I refuse to see the relationship with an employer as adversarial. It is a business relationship, I treat it as such and demand they do as well. Otherwise I don't do business with them.
This is the first and most important thing to understand and know before entering a negotiation.
Without this fact, your negotiating ability is irrelevant (and kind of inherently non-existent), as you're operating blind.
With that being said: many do not know what they are worth, to their dismay.
> I refuse to see the relationship with an employer as adversarial
I frame as such: You're two businesses/professionals trying to reach a meeting of the minds. You both want the same thing.
I'm just curious.
I'll go first. I know developers that make 70 a year and some that make 120. It does depend where you live of course, but for me personally I need 90K minimum or I won't consider any gig, anywhere. If I can't get that, I go into subsistence living, doing odd jobs or finding a gig at McDonalds. But I won't lower my standards for dev services.
While 90 is a minimum, 95-110 is what I want. Depending on the role. If I were more senior, I'd want 120+.
I've not seen anywhere close to that number since (I opted for a $160k position in an industry I like, expanded experience, and the ability to work even as low as 30 hours a week should I choose to), but it has given me supreme confidence to turn down offers that don't have a minimum compensation along with my desired benefits/perks.
The key to me on top of that is that I am satisfied with that salary. It is not one that would make me look elsewhere with any urgency. Yes, I could try to negotiate more, but I feel no need to and believe that if I got more the company would be paying over market value and eventually realize and act upon that.
It sounds to me like you would be comfortable making around $100k and that if the market bears that for your services that is what you should demand. If the market doesn't support that for you, look at raising skills/experience until it does.
The odd thing is how much more you make by switching jobs versus a salary raise at companies. I am typically offered a 3%-5% raise but have typically increased my pay by 10%-20% by looking elsewhere. Companies really should assess the market more often.
I don't know exactly what I'm "worth" so that's why I like to ask around. I base what I'm worth off more the going-rate than I do me being a touch below or touch above the average employee. I'm not confident enough to demand 120 yet, but 120-180 is what I'd ask once I'm dominating interviews and able to pretty much make everyone else look like a fool.
I've found the same things on all your points. If anyone else wants to add in more salary datapoints please do so. Don't be ashamed of lower salaries, I have friends who work for 70K a year as C# devs and know full well they can make more. They choose to stay because they're comfortable. That's worth a lot too.
I make 90K now, but I work from home and am very comfortable. I know I can get 100K if I switch jobs and start going into an office again. It's not but may once I find the right place to land.
Negotiating doesn't have to be adversarial. There are multiple strategies you could take to boost yourself without being adversarial.
In my experience, companies you actually want to work for will turn away the doormats.
I've actually spoken to a number of companies that have openly stated that they would not interview candidates that didn't request an amount greater than a certain dollar threshold (most recent one I can think of was >$160k base, Santa Monica).
This is the "we want skilled, assertive people" ideology taken to its conclusion.
Personally I'm not a hard negotiator (though I'm willing to walk away if my -- generally not super aggressive -- number isn't met), but I tend to move myself into technical leadership positions fairly quickly when joining a new org.
Good! My evenings and weekends are valuable to me and I want to work with people who value my time.
If they self-filter because they're a bad place to work, all the better.
In my opinion, with negotiations, (as much as people hate negotiations in this thread) nothing ever generically applies as not all people are expert negotiators... (including this advice I guess...)
(That said, I completely agree that it is generally good advice to not disclose your salary expectations in most cases. This is especially true for junior hackers without full awareness of the market conditions, who I have seen consistently underestimate their salary potential.)
I feel that I could have saved myself the majority of those 9 hours if I had told them my salary expectations from the beginning. They would have either balked immediately or told me the position wasn't going to be paid that and we would have been done. I think that is how I will handle things going forward, personally.
Or you could've asked their range upfront, and then you could be the one disqualifying and doing the balking. This information is freely given to third-party recruiting agencies (if they use them) as well.
For me, this serves more purposes than knowing what I'll get paid. I need to know that my coworkers are well-compensated: it's a huge indicator of the quality of team you'll be working with.
Sure, it's possible that the entire team is grossly overpaid, though it's not likely. You'll find out their competency in the interview loop.
LOLOL You'll get
"we pay market rate"
which is a ONE HUNDRED THOUSAND DOLLAR WIDE gulf of market inefficiency
Why can't "the Internet" know that I'm not average? Based on my web browsing history alone, the Internet should know that I have reached expert level in resume and salary compensation discussions. So don't show me the stuff for beginners.
There has to be some startup idea in there somewhere. All the raw data is there. Deep learning is hot. Who will come up with the first usable "Internet persona" or "Custom Internet" concept that actually works?
As an agency/3rd party recruiter/headhunter who asks people questions about salary all the time (current or desired), I'd argue that the #1 mistake people make is saying that they are willing to negotiate before getting any objection. I've written about this at length, but the typical conversation goes like this.
ME: "How much are you looking to make?"
CANDIDATE: "I'm looking for 100K."
ME: PAUSES TO TAKE NOTE
CANDIDATE: "...But I'm always willing to negotiate"
I haven't even said "no" and they are already negotiating against themselves. Any hiring manager dealing with junior level candidates will likely know this tendency for inexperienced negotiators to mention flexibility when greeted with any silence, so they'll incorporate that silence into their "script".
But I'm sticking with the strategy.
Ultimately the jobs where, in a vacuum and asked to value the job themselves, they come up with a number a sad fraction of your current comp, there was simply no scenario in which you would have been happy with comp at that place. It is simply the wrong job/company, and a change in negotiating tactic would not have fixed it.
The lowball initial offer ruffles some feathers and produces bad feelings, but ultimately does not change the outcome of the game.
Where withholding your current comp matters is where you're looking to make a step up - either a position with more seniority/responsibility, or simply at a company that pays people more. In these cases you have some knowledge that the upper end of the envelope is higher than your current comp, and so you don't want to anchor the negotiation low right off the bat.
Knowledge of how much companies pay for what positions is invaluable in negotiation - personally I wouldn't even bother interviewing at places where I know for certain the comp won't hit my expectations.
Side note: Glassdoor is incredibly bad for this kind of intelligence. Their medians lean low and the upper end of the envelope is in my experience almost entirely unrepresented. If you go in assuming the comp envelope is what Glassdoor says it is, you will lowball yourself severely.
I concur wholeheartedly. Glassdoor is the absolute worst representation of salary ranges available. One could speculate as to why, but anecdotally, I've never received an offer that fell below their "reported" top-end.
AngelList is similarly bad for top-end comp representation, with the added twist of permanent anchoring: if you apply to a company that's listed an unreasonably low salary range, even if you know they'll (logically have to) pay more, they'll know that you can be bought cheap.
Why would anyone do that?
More commonly though I think people just aren't aware of the market situation, and comp ranges for specific jobs at specific companies.
Knowing the lay of the compensation land in your area is pretty critical to negotiating well - from both sides of the table. And this goes beyond generalities like "market salary" but to specific recent offers made for specific jobs at specific companies.
Honing the skill to determine whether or not a company is going to be able to pay you what you're worth is hinged on a few (apparently tricky) soft-skill-based assumptions:
- You can assess the company (quality, tier of engineer, etc.)
- You can assess your own market value, apparent worth accurately.
I like to give companies that I believe won't pay correctly the benefit of the doubt: I give a blowout number, xx% more than I believe I am worth. If I'm not met with resistance: I'm wrong and it hurts.
The interviews are to judge skill and if everyone wants to work with one another. There are also different leveling with the title, so they won't know the range until all the interviews are finished. And while money is important, it comes off as you're only interested in the money to the interviewer.
Your statement also says interviewer instead of recruiter, was that a mistake? I have never had an interviewer discussing salary range, maybe cost of living in the area, but not salary range for the role.
You're best off naming a range, with a stretch goal, and giving a little bit of context to the person asking. E.g., "I'm looking for $150-180k, but I'm interviewing with a few other companies, so anything in addition to that would really put this role at the top of my list. I'd really love to work for you, so I hope we can find something that works for the both of us."
Notice how there's an implied "+ $X" in there. That X-factor can make all the difference and with this approach you don't come off looking like someone who's just playing games.
Most recruiters immediately get the hint and you can gracefully exit if they're expecting to pay far below your current comp.
Edited answer to be less preachy.
In a few weeks I will have a job interview but the job is only partly interesting to me. I can earn my money without that job, so I can say no. And the chances that I'm really interested are currently 45% yes to 55% no. In that situation I would either tell him "I'm not interested if you don't give me a high number" or I would tell him something I consider high myself. His starting number is certainly much lower than what I would consider my "yes" range.
The best thing I did for my negotiation skill was to read up popular psychology books on influence. It may not make me a negotiations pro but just being able to name some of the dynamics and recognize some of the tactics puts me (or so I feel) at a far better position at the discussions.
E.g. it's easier to play football if someone explains the rules, especially if the opposing team is used to playing against players whoa are completely clueless of the game.
In this context "don't name a number" is analogous to "be aware of the leverage at play, and don't yield leverage to the other side unless you know where the game is".
In a good negotiation, if you give an info you can expect an info back, so that's also your opportunity to request something. For instance you may want to ask how the bonus structure looks like, or what's their view on remote work.
And gain from there, negotiation is not just about money.
How does one answer that, when you consider benefits, 401k, average bonus, etc. It could be $10k difference. So, I usually say I need to see the whole package they are offering to get you a number.
All of those other perks are either known, standard, or negotiable after the fact.
In general - save for a publicly traded company issuing RSUs - base salary is the most important factor to be optimizing for.
Better, since I didn't start, I was able to still negotiate on top of their initial offer.
So far the best we've figured out is to be the first ones to name a number, and be super-transparent about how we arrived at that number.
The reasoning is that "in a salary negotiation the first person to quote a number loses", so since we (as the employer) are in a naturally stronger position, we deliberately "lose" upfront to avoid forcing the other person into a negotiation dynamic where they're going to try and push it as high as they can, and we end up trying to push it as low as we can. I think everyone loses out from this, and it starts the working relationship with distrust.
Instead, we run a pay evaluation process internally, including feedback about the value of the role and the person from all the people who interviewed the candidate. We publish all that feedback, as well as the suggestion/reasoning of our pay trustees (a group of people who use that feedback to try to place the candidate on our pay scale), along with the number this maps to, and the full pay scale, and the list of how much everyone is being paid in the company so they know where they stand (anonymised, because not everyone is comfortable yet with someone who is not yet a team member knowing their salary).
So far we've successfully used this process once and it led to a great onboarding experience. It's a recent development. I hope it continues to work, and allows us to avoid the games described in this very helpful podcast. I thought I'd share it in case other employers here are struggling with the same question.
This won't work in every company. Have a read through http://danieltenner.com/open-cultures/ if you want to understand more about how we run the company - hugely important in making this work.
If you can't stay in business without underpaying a lot of people, your business is in trouble.
If there really is a difference in negotiating ability between women and men, it would seem far more beneficial to teach women how to negotiate for a fair wage rather than abolish the entire thing altogether. In fact, teach all employees to quantify their abilities and how much value they will provide to their employer. Demonstrate that if companies are unwilling to pay them a fair wage, that they should not devalue their employment.
But the most recent steps toward banning negotiation will ultimately hurt all employees. When companies like Apple, Google, and other Silicon Valley companies agree not to hire employees from each other, and threaten to replace tech workers in the US with less-expensive H1B visas, we should question their true motives. This newest idea of "banning negotiation" is nothing more than another tactic used by a profit-maximizing entity to reduce costs.
Let the market drive the compensation level. If "the compensation for the position - take it or leave it" is too low, then the company won't be able to hire anyone, and they will have to alter it over time.
If it's "take it or leave it" from the employee, you wind up underpaying people with humility, and overpay people who are overconfident.
Note: I'm not at one of the large companies that have been in these lawsuits, and lost an internal fight to move to the "one price" policy that I'm advocating for. I'm doing my best to implement it in my part of the organization, and even there it doesn't always work.
Rather, there are many ways to approach this:
1. Salary negotiation could be included within curriculum at CS schools. (Schools would love if alumni made more money!)
2. Techniques could be included in books (like "Soft Skills"), podcasts, etc.
3. The culture in Silicon Valley could emphasize the importance of negotiating a fair wage.
Left to their own devices, companies WILL exploit those who believe that negotiation is "bad". Companies might not even do so intentionally, but might do so merely by hiring the cheapest employees who have the highest skills.
A side effect is that even if only 75% of employees negotiate to higher wages, the "market rate salary" for employees will increase. If, instead, 75% of employees did NOT negotiate, you'd see a depression in wages.
There is also the issue that the same behaviour is seen differently when coming from men and women. What is assertive in a man can be aggressive and offputting in a woman. Which means you'd have to have different kinds of courses for different genders, and it only starts there (more minority groups with less studies of what happens when they act the same as a white male). So, there is even more of a hurdle for potential training classes to overcome.
I think for very senior roles, individual negotiations still might make sense, as the value prop of those hires is highly variable and can have big impacts on the organization. But for roles like Software Eng I, and Software Eng II, etc... in the long run it is better for morale, attrition, and equality to use defined salary ranges. And you can still use bonuses to adjust compensation based on performance.
A friend recently had an offer, ready to sign, but the salary was lower than she wanted. She wrote back asking if there was room to move upward. She had the offer withdrawn.
I remember one of my first colleagues as a professional in this industry had to fight and fight to eke out a lousy 3% raise, despite being s superstar employee.
Later I found out that she was making 30% less than me, and They had just threw a ton of equity at me to try and keep me from leaving.
When did these Silicon Valley companies threaten to hire less-expensive H1B visas? Do you have any citation on this? Are the H1Bs working for these companies paid less than non-H1Bs? Looking at the publicly available salary data for these companies - AmaGoogFaceSoft kind - seem to pay their H1Bs very well.
Consequently, since they've eliminated the possibility for negotiation, I will never approach them for prospective employment.
A "master" engineer taking low equity living/working in SF only makes ~$155k: no thanks.
https://buffer.com/salary?r=1&l=10&e=3&q=1
In my humble opinion: this kind of hiring strategy rewards low performers who get lucky and dissuades and marginalizes A-players who know what they are worth.
You may believe that sets you apart as an "A player" and means we only hire B players. I believe the concept of A players and B players is false, and have discussed this here: http://danieltenner.com/2014/09/11/there-are-no-b-players/ . That said it is your right to believe this dichotomy exists and that you are on the right side of it. I put it to you that if you insist on having an A/B player dichotomy your desire for an environment which makes you feel worthy through paying you more makes you inherently a B player in the environment at Buffer or GrantTree, where this kind of mindset will have all sorts of side-effects that will make it difficult to work with you.
Almost all the people who we interview are very keen to work in this kind of environment. The last job we had opened (admittedly a relatively low skilled job) we had 200 applicants, interviewed about 20, and almost all those 20 were really, really keen to work in this open environment (and none found it a turnoff, though some didn't really understand what it meant). I like to think we hired someone who will be able to do the role very well and be happy doing it in our company. What I love about your comment is that you are far from alone to have this reaction, but because we are very upfront about our culture, people with your reaction never seem to apply. That's a win on both sides: you don't waste your time interviewing with us, and we don't waste our time interviewing you.
I find it difficult to work with people who are compensated less than me. I want my coworkers to be better than me.
I do not want to work with people assessed as "masters" making $155,000/year in San Francisco, CA. I am accustomed to working with people being paid more.
Full disclosure: Over four years ago, I was receiving offers $10,000+/year more for like roles (SF, FTE, backend development). I would certainly not proclaim myself a "master," either. Especially not 4 years ago.
> I love about your comment is that you are far from alone to have this reaction, but because we are very upfront about our culture, people with your reaction never seem to apply.
Please do not turn this into a matter of "culture."
I find nothing wrong with a culture of transparency. I find Buffer's actual compensation packages problematic.
The lack of negotiation ability makes what might otherwise be a fruitful business relationship impossible. I do not believe that transparency and negotiations are mutually exclusive.
Sincere counter-question: how can you retain talent with fixed salary ceilings? Why would someone stick around when they're leaving a ton of money on the table?
Entirely my opinion: this is potentially the A/B dichotomy.
If someone is developing their skills, is extremely productive, is increasing their worth, at one of these companies they can choose to leave money on the table (altruistically donating their higher value to a for-profit company) or leave. Are they a "bad culture fit" because they wanted to make what they are worth?
Problem with this approach is that inevitably part of the formula is also "level" -- so you just converted one problem (negotiating $) to another (negotiating level.) That is when the real tricky people come in -- those who want a high level and just manage others, often adding no value (good managers add a lot of value, but if you tell people that the only way they can make more money is by being manager or senior managing level, then you force people who should not be managing into managing roles.)
This is actually a separate issue. A healthy engineering organization needs to have parallel technical and management tracks, with similar growth opportunities (both compensation and responsibility) at every level. On the tech track, think about a path that leads to CTO.
Of course, you'll still get people (in either track) arguing they want a higher level than they merit.
His trick was to write a minimum of 0 as in if you're not satisfied with his job he won't take your money, supposedly he got much better offers doing the negociation this way, probably because he gets the other party to give a number much higher than what they would otherwise have said. Also it may have been for contracting work and not an employee position. (Can't remember where I read this, probably on hn though).
I've seen too many people with low salaries get "exceptional" raises of 5% when everyone in the company gets 3%. So you have an employee who works his way out of tech support into dev admin but he's the bottom of a very large band. There is no hope for that person to get to salary parity when mountains have to be moved to go from 3% to 5%.
This assumption is wrong. Read about the anchoring effect. Your process still seems fine though.
I'm not sure that there is an individual solution to this problem. EVERY company (or most companies) would have to be ultra-transparent about their salaries before people can trust something like this, which works against how a lot of high-profile companies currently compensate (i.e. fixed salary ranges, highly variable bonuses)
On the employee side, best to get out of the question as quick as possible. One thing to say is, I have offers higher than that already. They can find out your current salary, but the other offers, doesn't have to be disclosed.
If anything, a person would know even better how much they are "worth". E.g. they know the necessarily short interview wasn't accurate.
None of those factors are why someone is worth $X salary.
You say I'm worth $X. I go get a job offer for $Y. If $Y > $X, you were mistaken.
It's both as easy and as hard as that, for candidates. If you want to get anywhere close to your earning potential, you'll have to have more than one option when job seeking.
It doesn't matter what you're paying other employees or whether that information is known to employees.
EDIT: To clarify, this is about market value, not intrinsic value.
Any salary formula is entirely arbitrary. We have a pay scale simply because it is a useful tool for conversation, not because it represents any sort of intrinsic property of the person being placed on the pay scale.
If your main concern is getting paid as much as possible then we're probably not the right place for you to work anyway. We try to pay well but we certainly can't afford to pay as much as, for example, banking, or Facebook. Importantly, we have no interest in trying to sucker someone into working with us if money is their primary motivation. They won't like it here.
To answer a likely reflex-response to this: that doesn't mean we think people should be working for free, or that we judge people who want to earn more money. It's totally fine to want to make more money. Different people have different expectations and requirements at different stages of their life though.
Are you a charity doing good work with orphans? Or are you a business trying to make as much money for the investors as possible? If the latter is true, why wouldn't someone work for you with "money as the primary motivator" ?
(This is not Rhetorical, I actually know nothing about your business. But I do see this argument a lot from companies that are 100% for profit and do nothing to better the world)
Our view of business is that, much like humans, it can achieve and balance multiple objectives. You want to make money: does that mean you want only that to the exclusion of or above other objectives like finding love, raising children, being a good person, etc? I assume not. We want to make money: does that mean we want only that to the exclusion of or above other objectives like having fulfilling work, working in an open organisation, being respectful of others, etc? No.
[1] Though opening up the shares to employees within the next couple of months... it's taken a while to put the right system in place. Options wouldn't work because we have no intention of ever selling the business.
Edit: Given your clarified question, I will also add that what we do is to help other tech businesses to raise government funding so they can develop cool tech. Many of them have raised money from investors - I don't think that necessarily means that their only purpose is money (though it's certainly true of some). See argument above.
> a business trying to make as much money for the investors
> as possible? If the latter is true, why
> wouldn't someone work for you with "money as the primary motivator" ?
It is possible to offer a fair return on investment without having to take every possible step (ethical or otherwise) to maximize profitability.
For the overwhelming majority of people, the decisions about work are a balance of competing interests.
I could go out and get a part time job working on weekends, and make more (overall) money, but I don't because the money I make in 5 days is enough, and I place some value on my free time.
But the reverse it true, I could probably convince my employer to let me work 4 days a week for a 20% pay cut (or 0 days a week for a 100% pay cut), but that would drop my pay below the level I want/need in order to support my family and be able to do things on the weekends.
I could quit my current job and go back to working in finance for more money than I make now. I don't want to. I've done that, and I prefer the work I'm doing now, even if I'm paid 20% less.
I could quit my current job and go work for a charity and make 50% less than I do now. I don't want to take that sort of pay cut.
It's because of these balances that we have some well educated, highly employable people making a (relative) pittance as school teachers. And why some people spend their evenings doing open source "work" instead of taking on a second job.
Very few professionals in western countries have money as the single primary motivation to work. Once you can afford to pay your bills and maintain a comfortable lifestyle, you become quite willing to trade off the extra money to increase your overall enjoyment of life, whether that means more leisure time, or more interesting work, etc.
It is quite reasonable for for-profit companies to aim to provide a compelling work environment through factors other than pure financial reward.
It's also quite reasonable for workers to select job opportunities based entirely on the financial reward (though I think that's actually relatively rare).
That company and that worker are probably not a good fit for each other.
No belittling intended.
If money is not your primary motivator, why can't you pay more?
Considering that founders are making themselves fabulously wealthy on the backs of their employees, I think we'd all appreciate a little bit more respect than you're showing when you poo-poo employees who want something more closely approximating 1/4 of the share they actually deserve.
The team has themselves set a target for wages to 40% of revenues, in line with your suggestion. I would have set it higher (and in fact right now our wage bill is closer to 60%) but that was not my decision to make. The 40-60% is of course not evenly distributed, though I would also quite like the thought of that, but the team themselves decide how to allocate it, so I guess they're doing the best they can.
I find the reality you perceive distasteful too - and I agree that it is widespread and it is sad that that is so.
That kind of phrasing is generally code for, "We pay crap wages and expect you to live at work."
There are many, many people starting from far worse conditions, though, I'm not complaining. I had a stable childhood, a good education and I have great friends and parents and an amazing wife and cofounder. That's worth way more than any trust fund or inflated property.
Not necessarily. The first employer says I'm worth $X to them. The fact that I may be worth more than $X to another employer is not a contradiction.
In general, there is nothing "wrong" with a particular employer and applicant being unable to agree on a mutually satisfying salary. It doesn't necessarily mean either party made a mistake in the salary negotiation.
The only data point that matters is the one where you got hired and started receiving paychecks, all others are not factors at all.
I don't understand that. If an employer offers $X, I'd say that means the applicant was worth at least that much to the employer, assuming the job offer was legitimate. I suspect it's fairly rare to get an offer for $X, only to find out that the employer was lying and won't actually pay that much.
The $Y amount may be higher than $X because you are actually worth $Z to a median company, and $Y > $Z because that particular company is in the 90th percentile at turning developer work into revenues, and $Z > $X because that company is in the 20th percentile.
So, generalizing, the company that is capable of offering the most to you is going to be better at managing development teams, which is usually a symptom of being a better employer overall.
When I say you're worth $X, I mean: "you're worth $X to me".
If you get a job offer elsewhere for $Y, you're still worth $X to me.
Not at all. Company A may value you at $X, and company B may value you at $Y, and they may both be right.
You can offer $x and explain your reasoning, but if $x < $y, you might not get any candidates. Don't then complain about the "shortage of qualified tech workers".
What's my house worth? Who knows until I go try to sell it?
I find the most important part is being able to walk away, If you negotiate from a position of weakness or need you are behind already.
If I am hiring I know what I can afford to pay, what I think the position is "worth" and what I want out of it and make an offer according.
I like ideally to pay for work not for hours etc, if you give me what I want I don't care if I am paying you $3000 dollars and you worked a half hour and slept for a week out of town, I would consider that smart and efficient.
I find its the person who is applying that has the power not the company and I think that's an important lesson for people who are applying to learn. If "they" are not willing to pay me what I want, that puts us on a bad start already.
I think you are assuming the person applying has some sort of safety net (a current job, savings, alternate income.) That is where the BATNA comes into play. Sure, if you are already making an acceptable amount of money to meet your needs, aren't overworked/over-stressed, and relatively satisfied then you are indeed in a position of power. If you need to get hired some place within 2 months and have been having trouble getting a job then you very well might not be in a position of power. Not all people have the ability to walk away.
So you hire someone in a weaker position for less or even exactly what they're worth: 6 months later, when they're now in a stronger (employed) position, they find a new employer and you're stuck with the ramp-up and churn tab.
It's a seller's market right now. The biggest advantage an employer holds is the disparity in information; most underpaid people aren't aware they're underpaid.
In some ways its much like dating, does anyone really want the desperate type ?
The alternative to not working is, eventually, losing almost everything you have. The alternative to not having a romantic partner is, well, not having a romantic partner. You're not going to die from lack of love.
For those that aren't good at faking it until they make it (negotiation): obtain the opportunity to walk away.
Take the position as offered and immediately begin seeking new options.
I would also say never pretend, actually be willing to walk away. Someone good at psychology or picking up subtle clues will see right through pretending.
Anyway you slice it being desperate is never good, don't be desperate.
I think this question has been answered and studied quite well. If you have a significant lapse in employment (with or without explanation) or are obviously needy, prospective employers will have negative biases that directly translate into less compensation.
I'm just saying that OP sounded like he was saying "if they don't meet your demands, walk away." Which is great advice if you can afford to take it.
I want to be prepared going in, so the plan was: They have a price, I counter. They counter in the middle. I either take that price or walk, that's it. No further negotiation. Reduced the stress by just sticking to that.
I've done this a couple times: the first time the dealer came back with a better number, and I took it. The second time the dealer was way low and I sold on the private market for 100% more.
The real key is to separate out variables. Negotiate only on the bottom-line cash value of the car(s), and know when to walk.
Last car I bought, the dealer tried to play hardball and told me there was another individual looking to purchase the same vehicle for more. I told them to take the other offer, and put my coat on. I should have gone over and introduced myself to the other guy.
The idea that a car is a scarce good is a fundamental ruse that car dealers have been establishing for decades.
The car would be at an auction somewhere, not a car lot, if it were actually a scarce item.
Never fall for the "it's going to sell fast!" story. Great. So it does sell fast, there'll be another truckload of them next week.
If I take my wife I play it cool and say "hmm, it's okay" and my wife starts arguing with me, "no it's great what are you talking about" and the salesman gives me a look of pity before naming his price. Oh god.
I would say it almost never works out this way, more likely you end up doing a lot more work than you originally imagined and thus bringing your hourly way down. There's also a strong incentive for the buyer to manipulate this to their advantage.
The exception would be very small and predictable jobs (tasks?) but for everything else my advice would be to always get paid based on hours actually worked.
Two months into joining, the shuttle went from free to paid. Ouch. Then, the manager expected me to stay late 3x a week, which meant i could not even take the shuttle 3x a week, and instead have to take a taxi. Still not enough salary to buy a car + insurance + parking. Then policy changed and 401k match disappeared. Finally, policy changed and all conference reimbursements ended. Final blow -- my PDP is tied to 3 conference posters a year, so i pay out of pocket for travel/registration/hotel.
By the way, the work is great, but i'm paying so much out of pocket that i'm getting the hell out of there. Sucks for me. Sucks for the manager too -- I spend half the day now doing eLance projects.
Another common one to look out for is 'projected bonus'. Where you find out that you make 1/2 of what you thought you agreed to, but the manager says "Making that much is up to you! You could make that number with bonus" (if you hit your ultra stretch goals that the company could change at any time).
These are both reasons to insist on an offer letter with the salary figure clearly stated. Also pay attention to the background of a hiring manager. This kind of BS mostly comes from people who were previously in a sales role.
What part of the work is actually "great" btw. I would guess you don't have any other job yet. Because everything sounds very horrible.
I'd argue the job isn't that great.
- say that your salary expectations depend on the work, the people, the work hours, vacation policy, etc, so it's too early to discuss salary, or
- ask what the company pays people in the same position. They won't tell you, but that establishes concretely that it's private information.
If they do share the information with you, you can respond with "my expectations are higher", or "that's within my expectations". And then if they persist in asking yours, you can choose to answer or to stonewall. You got the data, so now the mystery is over and you have control of the conversation.
This comes across weak, phony, and panderish:
> I think the best way to answer the current salary part is to say something, like that you’re not comfortable sharing that information, and you prefer to focus on the value that you can add to the company, and not what you’re paid at your current job
This sounds clownish, like playing a game:
> “Well, if you’re trying to qualify me for a range, why don’t you tell me the range, and I’ll tell you if I’m in the ballpark?”
This sounds wonky and comes across as an insincere:
> “I’ve been entrusted with a variety of information by my current firm. I intend to keep their confidences on that sort of thing. They consider their salary compensation private.
By making clear that you don't have enough info about the opportunity to properly value it, but recognizing that they need to qualify you based on their range, you're putting the ball firmly in their court to bring more data to the table.
Companies who remain firm about not giving out any info but demanding a salary from you are probably not places you want to work.
Years of experience in the client's stack are a pretty good proxy for whether the employer will want to talk to you.
3rd-party recruiters? They just want you to take the first offer you get so they get paid. Tell them whatever you want.
This way, you make the whole "current salary" irrelevant. The point is that any good employer will NEVER let go of a candidate who is an excellent fit for their role but they had a huge gap in current vs desired. They only let go of candidates who either are not a good fit OR are asking for a very very high number that is literally out of the budget assigned (more applicable to larger corps.). But then again, it has nothing to do with current salary crap.
I've always requested to keep my current salary secret, but I've never met a hiring manager/HR recruiter that's ok with this. I suppose knowing what I make comforts them that their offer isn't completely crazy, but I think it's also evidence of a disturbing bias against the unemployed/underemployed.
There's a very simple position to take here: "My compensation is a function of the value I will be providing to your company, not the value I provide to my current employer."
Be assertive. At least in the United States, short of a backchannel reference check, a prospective employer has absolutely no way of confirming anything you say - a fact that can be brought to light if this kind of question ever comes up.
At the moment, for good talent, it's a seller's market.
> evidence of a disturbing bias against the unemployed/underemployed
There is a definite bias against un(der)employed. This has been well studied. Furthermore: your BATNA while employed is infinitely better (for most people).
That is: I'm really senior in my field, with 25 years of experience, and for several years I've been commanding top dollar. (I'm worth it, too!) But often I start discussions with would-be employers (or clients), wherein the work sounds enjoyable, and they clearly are falling in love with me... and then a half hour later (or three days later) we come around to money ranges, only to discover their budget is half what I'd consider accepting.
I can end off with, "I hope you do really well, so that you can afford me sometime soon!" but I'm always saddened and frustrated by the process. Because by that point I'm imagining how cool it would be to do that job.
How do I signal to a client, "I'm expensive -- and worth it!" without saying, "Hey, can you afford me? Because otherwise let's not even talk."
1. This is just the reality of negotiation: sometimes you'll find out you're pretty far apart when they finally make an offer. The value of your time matters, but in general I think the payoff when you DO command top dollar at a good company is worth the time investment. (Think of this from a Sales perspective - they deal with hundreds of leads, often narrowing them down to the best-qualified leads and closing only a few deals. That time working with unqualified leads is not wasted per se, it's an investment to get to the good leads where they make their money.) 2. Signaling is important and you should continuously do this throughout your interview and negotiation process. My one-sentence strategy summary for interviews is "You're telling them a story about how their company will be better if you're a part of it." Your job in the interview processes not to save time—it's to get the best job offer possible so you can negotiate or walk away if it's not a good fit.
I realize this is controversial, but I think it's best to not think of interviews that don't lead to job offers as time wasted, but as time invested in finding a good fit. If you're interviewing for a huge volume of jobs that always end with an offer far below your range, you may want to evaluate whether you're applying to the right jobs. But if you occasionally interview and find out that they can't met your pay requirements, you can just move on to the next opportunity.
One last thing: Make sure you're doing market research to determine the value of your skillset and experience in your industry. If your market research confirms your salary expectations, then keep interviewing. If it doesn't, then it's possible you're at a company that really values your work and you might consider the opportunity cost of leaving.
Does this help? If I can clarify anything, let me know!
First, I was a bit shocked to hear that Fortune 500 companies with $USD revenue in the billions would hire senior managers and want to pay them what would be considered an entry level salary for a good programmer right out of university, but honestly, I've defaulted to just telling them my salary because I want to avoid all the time wasting that multiple interviews would require, just to get to the point where they really like me, and would I please consider their great position where I'd have more responsibilities, longer hours, at half the salary...
Recruiters are easy: "What is the client's targeted range for this position?" or "What have you placed other people for at this company?"
If the top-end of the range is within some arbitrary percentage of your target, pursue, otherwise: "no thanks!"
You're missing a step in your sales process, which is the qualification part. Before letting a conversation go into much details or letting it turn into an interview call, take control and state that you'd like to to spend 10-15 minutes asking questions to make sure they're a good fit so you can make best use of each others' time. Then ask:
- "So tell me, why are we talking here today? What is it exactly that brought us into this conversation?" [Let them throw up their problems on the table, but only in broad strokes.] (~5-10min)
- What their decision process is and how they'll fit in [in passing] (~1-2min)
- How urgent it is for them to fix the problem [if it's not clearly urgent] (~1-2min)
- What their ballpark budget is [~2-3min]
Most prospects resist giving a figure at this stage. A trick to get them to give a ballpark is to announce a scary-sounding range. As in "hold, the type of contracts I work on start at $5k and go as high as $500k. I don't necessarily need your specific number, but can you at least let me know where you more or less fit in that range so I can know how much I can help you?"
Sometimes, there's an obvious and intuitive mismatch between what their problem is and the budget they're willing to allocate towards fixing it. If you suspect they've deeper pockets than what they said, you can occasionally hold their hands and walk them through their own numbers. e.g. "Hold, let me try to see if I get it right. You just told me your team of 6 engineers was on this for 4 months and failed to make this work. Depending on how you pay them that likely makes it a $150-250k type of problem. Are you sure your $20-30k budget range will allow you to solve it?" [Then see how high they could actually go, without negotiating or promising anything on your end.]
That way you won't waste time going over prospect problems for hours on end without the slightest clue of whether it'll be worth your time or not. If they're clearly under your number, say it up front upon [dis-]qualifying them. Either politely stop the conversation there, or spend the rest of your meeting giving them a few good pointers. [Then ask for a few referrals.]
With appropriate qualification, you'll get those referrals and the respect.
I enjoy both what I do and the company I'm at, which puts a clear floor on what I'll entertain. If I can't get confidence early in the process, it leads to a lot of wasted time. In practical terms, that means I invest less than an hour before figuring that out. ("I'm pretty happy here and my current comp starts with an X" often cuts the conversation off right then, which is ultimately best for both sides. It's just business.)
I won't say that I'd never consider a pay cut to change roles, but I work for money, for me and my family, and I'm going to try to maximize my and my family's happiness (financial security included).
How do you word it on your resume? (I'd like to steal the verbiage. <grin>)
If you believe that you have a position for which you honestly think I'd be interested, please feel free to contact me. I insist however on restricting phone calls to principals only. I have too much to do in my day to field cold-calls from head-hunters looking to fill their Rolodexes with my name or the names of my colleagues. In fairness to my company and my colleagues, I won't assist you on a fishing expedition.
If you are a headhunter reading this, please take a moment to consider whether the position you have to fill truly fits like a glove, before investing your precious time (and mine) on a phone call. Headhunters are encouraged instead to e-mail, as this takes less of your time, and is less intrusive to my workday.
Thanks for your consideration.
(That's maybe a little aggressively anti-headhunter, especially if you're in job-search mode, which I'm not. I have nothing against recruiters per-se, but I also don't want to chit-chat on the phone with them unproductively for both of us...)
Still you have to know what you're going into. If I'm looking for a 40/hr week gig (consulting or staff), I'm going to be less thrilled with 20 hours a week.
I don't quite understand who's "side" they are on - on one hand, it seems reasonable to tell them the real range i'm looking for upfront so they can narrow the search, on the other hand they might reveal that to the employer..
(I can see how it would work negotiating this as an already-established employee where you're a known quantity to the employer and they'd rather not lose you altogether, but not how to get that kind of setup from the start with a new employer.)
If you're a super-hotshot ninjastar who wrote Rails and founded a Linux distribution that now runs the Japanese train system, then you could probably get both a spectacular salary and part-time hours, but realistically the two will not go together for most people. (Which, incidentally, is a typical problem for women with families and one of the reasons their salaries remain lower on average.)
- "Are you guys open to the idea of a lower salary, in favor of an extra day off? I'd love to work on my wood working, and spend time with my kids... Time is more valuable than money right now".
v.s.
- "I'll take that salary, and I want an extra day off every week."
I think it's unwise to reveal your willingness to be paid less. Mostly because you should never reveal your willingness to be paid less. Never leave money on the table.
1) Post salaries with job descriptions. (e.g. seneca.systems/careers/growth/go-to-market-strategist-product-marketer)
2) Pin salaries to job position[1]. We do not allow individuals to negotiate their salary separately from their position. If you have the same position, you make the same salary.
[1]: https://github.com/SenecaSystems/employee_handbook/blob/mast...
This is great from a company perspective, but it essentially allows a company to get an employee at a much cheaper rate. Employees with more experience will get the same pay rate for the same job as someone with potentially much less.
Since all companies don't do this, I probably wouldn't ever work for your company knowing this is your policy. I bring much more value to a company with all of the experience and knowledge that I've gained.
At my last 9-5 job, I was able to get paid almost 20% more than many of my co-workers because of my negotiating skills and experience.
I just have to shake my head when I see so many people fighting for less power, rights, and inevitably less money and calling it a 'win'.
But, this doesn't really matter to me anymore. I've owned my own company for the last 5 years and don't need to negotiate my own salary.
I know what I can do and I know how much money I want to make. A company advertising a job with a salary attached would get some bonus points in my evaluation just because of their honesty and willingness to step out of the bullshit negotiation game, but I'd also know up front whether their expectations corresponded with mine. I'd only apply if it sounded like a reasonable offer, and if it sounded like a reasonable offer, why should I hesitate to apply?
Your perspective must be very different from mine, because I am totally failing to see this from a point of view where I can make your words make sense.
I think this comes from HR and leadership which can't quantify what the right balance is for comp vs their BATNA.
For engineers this is especially challenging because metrics are hard to come by and correlate with the $$$ going out the door.
I got to say this almost never happens in the big5 companies nowadays. There are countless internal trainings for recruiters specifically not to do stuff like that and especially anything remotely similar to what you see in pop-culture. I mean what are the chances none of your candidates would have seen "Suits" or "The Wolf from Wall Str." after all? Even if you manage to hire somebody below their market rate it will be just a few months hanging out with peers and he will find out and be resentful.
So you're absolutely right, the worst thing for a hiring manager and a potential employee to do is set themselves up into adversarial positions of who can best manipulate and "break" the other person first. Because a company built with employees and management who can't trust each other, and are in constant underground wars to gouge the most out of each other, is bound to get trounced by competitor companies in the open market
So I don't agree with that statement. He was basically a new grad, so the standard offer was probably obtainable especially considering he knew employees at that company. And they still did not make him an initial offer that was competitive with other places.
Well if I didn't get a fair initial offer then the manager must think the risk of me finding out will not affect his goals. I accept that, as long as they accept it too. But I don't want to find out I was lied to and then expect me to be loyal.
ME: "Ok so you are willing to pay me 200k to work 8-9 hours a day, how about paying me 100k to work 4-5 hours a day?"
THEM: "sounds awesome"
http://www.seelectronics.com/reflexion-filter-x/ http://www.seelectronics.com/reflexion-filter-pro/
Not sure of RRP in Japan, but someone is selling the RF-x on eBay US for $80. (I don't have one myself but I've been meaning to get one for years, didn't even know they had a home-studio model until just now.)
Don't let the recruiter hang up on that first phone screen without satisfying yourself that they could make a competitive offer. Otherwise, you're just wasting time. They should have the same desire, hence this is only an issue with bad HR departments.
It's not worth it to jump to salary immediately. You come off as either selfish or naive.
So yes, I've done it. You get to the end of that call, and you realize you haven't talked compensation. So you tie in with interest and next steps: "Sounds like I could be a great fit for this position, and I look forward to talking further with the team to confirm that. I do want to make sure we're on the same page in terms of compensation..." Then you go from there.
Or, if framed appropriately, expensive and valuable.
Your time is money. You do not want to waste it on a role that has compensatory packages beneath what you'd be willing to take. You are a professional doing another professional a favor.
Framing this correctly is a bit more nuanced, however.
If you're talking to an external recruiting or staffing agency, however: immediately jump to salary. They will not hesitate and have no opinion on you as a candidate. You're saving their time and they're not emotionally staked in the possible negotiations to come.
The company and the candidate write on a piece of paper a salary. The company should write the number above which it is not willing to pay the candidate. The candidate writes the number under which she/he is not willing to work for that company.
The numbers are disclosed. If there is an overlap, they sign a contract and the salary is the average of the two numbers. Otherwise, there is no hiring.
Edit: the parties can play this game only once
in fact, this system punishes honesty even more than the current one -- if I am honest and the other person is dishonest, the dishonest person wins because they will pull the average in the direction they want and I get a worse deal than if we were both honest.
Say the company honestly wants candidate ufo 130k or less. Company plays is dishonest card and writes down 110k. Then the candidate leaves and there is no hire. If company had been honest she would have hired a fitting candidate for 125k, less than the most that company was willing to offer (130k).
the company is willing to hire her at up to 150. But instead, they say 130.
She gets hired at 125 as a result. If they had negotiated, they certainly would have settled closer to 150. Her honesty cost her 12k/yr. The company profits immensely from its dishonesty as long as they say a number just above the candidate's lowest.
If I don't know what you'll say (and can't play the chances with multiple candidates/employers), I should say what's true. Otherwise, it seems I could expect to gain in any given "game" by raising/lowering my request until I'm at 50% confidence that our ranges will overlap.
Already off to a bad start. Just like we assume that advertisements without a salary range will be shitty salaries, employers assume applicants who dodge this question have a shitty BATNA. A good answer to this question is "x% more than I'm making now, and high enough to outbid competing offers from companies A, B and C." But if you want to avoid answering the question, a good response is "you advertised at 80k-100k, and that is admissable, but you will need to beat offers from companies A, B and C."
Generally, in a startup the last thing I want to spend time on is replacing good engineers because their salary was below market.
In short- If I want to hire the person - I just give them the number they ask for. Recruiting is the worst time sink and better to spend time on retaining the folks you have and improving your business.
It seems far more likely to me that Patrick has made it such a focus for him to share this advice is that he is intensely aware of it, rather than what you said.
For example, we talk about "The Dreaded Salary Question". Here's an article I wrote that discusses this question in detail along with what to expect and exactly how to respond: https://fearlesssalarynegotiation.com/the-dreaded-salary-que...
And we go into more detail in this episode.
To put a finer point on it: A lot of the reason I created Fearless Salary Negotiation is specifically to address the factors you mentioned. It's why a lot of my examples in the book involve software developers and related topics.
If I can clarify or elaborate on anything that was vague in the episode, please let me know so I can give more detailed information!
Thanks for your comment!
EDIT: I am on the fence about this, but I think it's extremely pertinent here. I mentioned I coach people and this is a big reason why. If you're a software engineer and you're tentative about negotiating, I can help you. https://fearlesssalarynegotiation.com/coach
I'm not even going to touch upon the fact that the skills that a person can use to negotiate more effectively will almost certainly make them a better and more valuable employee (even if they are just a developer/engineer).
Tech workers are not islands unto themselves. The faster they learn this, the better.
If you identify as non-assertive and aren't interested in compensating for that during negotiations, you're going to get a particular result.
If you identify as non-assertive, but are willing to concretely work against that tendency for an aggregate of fifteen minutes to a max of two hours during negotiations, you're likely to get a much better outcome.
I personally found his advice extremely actionable, and I'm keenly aware that I struggle more with being assertive in negotiations than probably everyone I've ever worked with.
I'm very sorry if this comes off as insulting, but I have only ever known two developers who really needed much more basic advice than what Patrick is offering here, and I believe that both of them are mentally ill. (One has Asperger's Syndrome, and the other, I strongly suspect, has severe clinical depression which is going undiagnosed and untreated.)
Now, if you are in this situation yourself, it is absolutely worth your time to seek treatment, or at least research and practice using coping mechanisms that apply to the issues that you struggle with most. Seriously, just memorizing a few new sets of behaviors and then "executing the program" in appropriate situations can profoundly improve your quality of life, in ways that go far beyond getting a fatter paycheck.
If you want to discuss any of this with me further, feel free to contact me at afishionado@gmail.com.
As a candidate for a job, before you go to any interview (even a phone screen) you need to know what the local market salary range is for the type of job in you are applying for. If you don't know that, you're in a position of weakness and any amount of verbal judo isn't going to be useful.
A good hiring manager will not try to cheat you - they will make you a fair and reasonable offer. It might be at the low end of reasonable, but nevertheless it will be reasonable. If they give you a ridiculous lowball, they're not a good hiring manager, and at that point you should just walk away. Even if they come back with a reasonable offer. You don't want to work for a company or a boss that thinks that's ok to do to people.
A good hiring manager will not ask you your current salary. They might ask you early in the process: "what are your salary expectations?". It is acceptable to not name a number and just say something to the effect of "competitive market salary" which should signal to the hiring manager that you know what that range is, as does he, and you're good with that. If you need to give a number, just state range near the top of the local market salary range and move on. Yes, there's a theoretical risk that you've anchored yourself lower than they might pay, but you've anchored yourself at the top of the market range - not exactly a terrible outcome.
Caveat: this advice might not apply when dealing with a recruiter.
Always ask for more than you think you'll be able to get.
Ignore talk about culture if they think that makes up for salary - it doesn't.
Even if you don't know anything about stock options, it will walk you step-by-step through the numbers you need, give you a value, and show you the math behind that number.
Right now I'm earning a good chunk less than my coworkers with same or lower working experience and it's slightly annoying. On the other side I know of a really good coworker that earns even less than me.
I'm a strong supporter of open salaries. Don't give people who can negotiate better more but implement a system that applies to everyone the same. Take seniority into account, work experience, a base and calculate the salary of every engineer based on that. Fair and open.
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I've seen a salary number printed in the initial job ad. If that number doesn't work for me, I don't pursue the ad. If they ask me for a number, that's the number they get - with the observation that it was printed on the ad.
Your options really come down to whether you want to truly remain a "programmer" in which you may have to make some concessions to compete with the other programmers in the market. Your responsibilities remain that of a programmer. Or you have to take on a manager/director/architect role which is less programming skill and more people management skill with a lot more responsibility.
Instead of being seen as a curmudgeon who could be replaced by four college grads, you're an external, automatically-trusted authority who commands a healthy day rate.
It's just a matter of optics. Though that life isn't for everyone.
I am working for a company in the Metal industry as a software Developer. I am working very independently.
I guess "How to break the cycle of greed" probably wouldn't go over too well with them or their target audience.
Technically, the higher the salary they pay you, the less profit there is to share, so absolutely, a higher salary will reduce the profit sharing. (you can immediately see how this is massively beneficial to you, of course).
Also, your future raises might (or might not) be smaller if you come in on the high end of the range. Some companies have a formulaic "X%" type of system, which means you want to start as high as possible. Others target a ratio to some fictitious "market reference" where a higher initial salary will result in lower future raises, which STILL means you want to start as high as possible.
Some company somewhere no doubt has a policy that works as you describe/fear. The overwhelming majority do not.
Compare job hopping and seeing 15+% base salary bumps each hop to possible, but not definite (often meager) raises + possible bonuses: rarely is the prospect (gamble) of a bonus worth the career trajectory + salary hit.
Because measuring business value of output of individual developers on a team is not easily done, and other output measures (e.g., SLOC) tend to be things that, if tied to pay, would create obvious adverse incentives.
It's not easy to measure the value of someone's work, even years later, and certainly not immediately.