In these sorts of situations, negotiation is much harder on a personal level, since the company is not a faceless entity. The company does have a face, that's the face you have to look into when you state your salary request.
On the other hand, it's also harder to accept being underpaid, because if you don't get paid what you're worth, you know the extra profits will go (almost) directly into the pocket of a person you will see daily at work.
Either my experience is exceptional, or your implication that money is the only thing that matters about a job is wrong.
Many people on HN, after a decade or so of amazon salaries, seem to have no concept of the real world.
I have the feeling, that i'm still having a similar amount of fun/happiness when i do my current job vs. my previous job but with more money.
More money means for me: less working later or nicer things now or faster/more stability & safety.
I have also seen enough people being afraid of quitting, people unable to quit, people who did not pull their weight, still complaining, still not quitting.
I have seen people not pulling their weight and being able to find a new/better job where they will still perform the same now just another company doesn't know what to do with them and just having them.
that said, I think a lot of young people have a poor understanding of how much saving early on can impact your retirement.
Smaller companies are often more flexible on other terms though, which is worth knowing. Often they can give you eg work from home options, different configuration of vacation days, etc. This if useful to think any for negotiation purposes.
So what? It's just like any other expenditure for the company. And it doesn't change the reality the owner is thinking about -- value of hiring you must be higher than cost of wages paid on a regular basis for it to work out. And probably high enough that they'd even bother trying to recruit anyways.
In a way, it's sometimes even easier to have negotiations in the owner because it's so much easier to up-sell them on added value you can provide because you are talking to the person who'd be willing to buy even more of just that. There's no one-size-fits-all HR determined range to deal with.
It does get a bit tricky if they're comp demands wind up out of band and then I need to decide if it's worth a higher level head count, but otherwise go for it.
The worst part was that he left after 8 months because he wanted more money (he didn't ask for a raise; he just found a better paying role) and I had to do all the hiring nonsense again.
HR people might be good for the company bottom line but they're not good at retaining staff.
Current company brought me in as a contractor at a good rate. Contract house had decent benefits, decent PTO, etc. It was very similar to the companies, just PTO was a bit less.
They eventually wanted to bring me on as a regular employee and offered about a 10% pay cut. WTF? I'm not dumb. I know they are paying a significant overhead to the contract house. I was honestly expecting a small pay bump when I came on as a regular employee.
I asked to stay a contractor and told them if they couldn't do that I guess I would have to take the salary they were offering. I didn't say I wouldn't stick around, but we both knew. They eventually came back with an offer at the same as my current salary, which was still a pay cut after the new benefits cost. Not big, but maybe a hundred bucks every two weeks on my take home.
Now they've converted another contractor to employee, who maybe played more hardball, but I'm pretty sure he's topped my salary even though he's clearly not as experienced and was making a lower salary before.
I'm deciding if I should do anything because there are now 3 senior's and I believe I'm the lowest paid. The other two guys are single white guys, and I'm Hispanic with kids.
I've previously noted the newest guy seems to have some lowkey racial issues with me, which is why I think he bargained so hard on salary. We discussed salary when we were contractors. He's always seemed to measure himself against me in a weird way.
You sure it's related to race? IMO bargaining harder makes more sense if/when you have extra information (e.g. someone else's salary), regardless of whether you love or hate that other person.
He was also hired at a lower level and doesn't have my experience.
Why bother fighting over 4 or 5 percent when I can just get another job in afew months that pay 10 or 20 percent more? I don't see the value, and obviously they don't either. I'm more astounded by the number of people who stick around at jobs for years getting very little pay or loyalty in return.
If they're pushing for more than HR wants to give, like I said I'm an advocate but the final say isn't mine if they're pushing tooooooo far off the calculated target amount.
Exactly, but the budget isn't infinite.
Assuming equal talent, I'd much rather hire 5 people at market rate rather than 4 people at 25% over market rate. The net cost is roughly the same, but we can get much more accomplished with 1 more person on the team. Even better, on-call demands are spread out over more people and vacations are easier to schedule.
In my experience, compensation requests are only loosely coupled to a person's abilities. Usually, the person's prior salary history is the driving factor, even when they don't reveal it (I don't ask). If you have a large enough candidate pool, it can often make sense to let the most aggressive negotiators go to the FAANG companies rather than jumping through hoops to overpay them relative to the rest of the team. The most aggressive salary seekers usually end up leaving for FAANG anyway, because they want the resume prestige as leverage in future salary negotiations.
Finally, handing out above market salaries isn’t without consequence for managers. When C-level execs look at compensation across the company and see a handful of managers with significantly higher compensation, they’re going to have higher expectations for that team. If a manager is constantly paying above-market rates but producing average or below average work, it’s going to draw attention. If I’m going out on a limb to give people above market compensation, the expectations are that much higher. I’m also going to be that much quicker to let highly compensated people go if they can’t live up to their compensation requests.
Having more people adds its own cost and there is a Pareto law in people's contributions.
Edit: Basically, IMHO, in terms of assembling the best team to deliver the best results it's better to keep things as small as possible. But in terms of internal company politics it's better to grow the team as much as possible.
You don't see any irony in offering "shit salaries" trying to build a salary comparison startup? What do you intend to do if and when candidates use your very popular competitor levels.fyi (which, just so you know, they already do)?
To actively hire at less than market range is to tacitly admit (whether intentionally or not) that you neither can afford nor adequately deploy the difference you're paying for. If that is the case, what kind of a message do you think that sends me about your serviceable obtainable market and your margins, your data quality, your growth, and how well you'll achieve competitive differentiation against your incumbents?
Don't take this the wrong way, but it almost appears as if you have resigned towards not being #1 in the space.
Based on my limited (10 years) experience I'm pretty convinced that there is little to no correlation between competence, confidence and compensation.
There are many people for whom work is not the most important thing in their lives. My expectation is that actively selecting for work not being the most important thing in someones life is an arbitrage that is under utilised and will create a much more sustainable company in the medium to long term.
Well, let's make sure to be specific about what we mean by those "for whom work is not the most important things in their lives." There are those for whom that's the case now, but who put in the work previously to attain the level of competence they need to do the job well. Then there are those who never reached competence because they never put in the work to attain it.
My guess is that you'll have difficulty attracting and retaining the former over the latter. Perhaps one assumption that's helpful to voice (and feel free to disagree with me here) is that most of folks in the former camp are going to have multiple offers and even a high FAANG/startup salary already -- that's because plenty of companies are fine screening for folks who want that and find sustainable work hours (== "work not being the most important thing in their lives") a key part of reducing burnout and the attendant organizational replacement costs. They just want the competence part.
And so that will leave the latter category. What I can say having interviewed hundreds of candidates (many as a hiring manager) at growth stage firms is -- it's hard to even recruit what you're willing to pay for, let alone getting more than what you pay for. Buying a lemon is expensive; you still pay the recruiting costs (either time or money) and you pay the opportunity costs to try and make a not so great candidate do good work. It's like trying to squeeze blood from a stone. It's a real seller's market for talent right now. I heartily encourage you to try and prove me wrong, and if you do, more power to you. But if you run into issues, perhaps consider a couple of the things I've pointed out.
There's no harm in trying to buy a lunch for less than the lowest median price, or for free. But you shouldn't be surprised if it's not possible. At a certain point, you'll probably get hungry enough that you'll realize that such a desire is penny-wise, pound foolish. The reality is that you need to pay market price for your lunch in order to eat.
At the very least pay market rate (i.e. an average salary) and then add benefits to turn average into good.
In my case my income really isn't the primary determinant of my household income. As the secondary earner being able to support the primary earner fully is of much more value to my longterm household income than fighting tooth and nail for an extra $20k p.a.
Since many competent people couple up into two earner households actively targeting the secondary earners by offering the things that are more valuable to them than money feels like a "society-hack" that should be achievable.
Work 60% for 50% pay or work 80% for 75% pay? Sounds like a raw deal to me.
There is, however, clearly something broken in the labour market though. The progressive income tax system in the UK means that someone working a five day week for ~$160k p.a. would only see a 12.5% reduction in net income if they could drop down to four-days per week.
That's assuming that negotiation skill is closely correlated with the skill you're actually hiring for, rather than being correlated with having read an article like this, or some other somewhat orthogonal knowledge.
If you want better than average people you have to be prepared to offer better that average compensation.
That's what it boils down to. The actual negotiation only moves things at the margin and the initial offer already tells if the company pays well or not. The company's reputation also already told that to candidates.
Of course it's indeed important for the candidate to get the best deal because, as mentioned in another comment, that has a knock-on effect over time.
People overestimate negotiation as a "skill." It's not. It's leverage, it's BATNA. Negotiation is having more than one offer and using that to explore the difference between the initial offer space and the maximum offer space between firms based on a basket of offers. The skill is in getting an offer from more than one company in the first place.
And I would wager that if you're hiring professionals, having that kind of ownership and thoroughness is often exactly what you want to hire for, even more than the direct experience.
But for some tech companies, having 4 engineers at that level is way more useful than 5 engineers 25% less expensive. Your average per IC intellectual horsepower is higher. You often get to solve problems a different way -- to use your example, maybe the on-call burden ends up being lower even being a smaller team because those 4 engineers will find a way to make it so.
I hear people justify not negotiating by saying things like “I’m worried what they’ll think of me” or “I don’t want to create trouble”. This is what people think I care about, but don’t.
And as others have said, absolutely this is different for small companies where they’ll feel it more personally.
Are you sure of that? Two people can usually accomplish much more than one person, but how much more do you achieve with 5 people rather than 4?
My guess would be that adding the fifth person to a team increases productivity between 5-15%.
I'm in a 4 person team currently, give me an additional project manager and productivity will soar as devs can focus on technical aspects, rather than being inefficient at PMing for a mediocre output (at least that's my expectation, you never know in advance I suppose)
If the work is embarrassingly parallel, then 25% more. (5/4 = 1.25, of course)
If there is too much work for four people to function effectively, perhaps more than 25%.
If the work requires a lot of inter-process communication, perhaps less than 25%.
That will come much later in the company’s trajectory.
One small exception to this from my n=1 experience is that all other things being equal, when hiring Barbara would rather pay at the low end of the range and then be generous with a raise, than pay at the top end of the range and have to fight to get you a raise.
That first performance review and raise set the tone for years to come, and good managers want it to be a happy experience for everyone.
—-
But that’s only if all other things are equal. Barbara doesn’t want to lose you to another employer by over-negotiating, so ask for what you want.
Let her worry about fighting for your first raise. That’s the job she signed up for.
However, the company doesn't have infinite money to pay candidates. Compensation comes out of our budgets. The more we pay each person, the fewer people we can hire overall. This is fine if you're really hiring someone with above-average productivity at above-average compensation, but it becomes a problem if you're paying above-average rates for average productivity.
Higher compensation cuts both ways, though. If an average candidate is demanding above-average pay, why would I go through all the work of getting authorization for higher pay just to hire an average candidate? If I'm going through the trouble of getting approval to increase the pay for an open job position, you can bet I'm going to search for higher performing candidates to match that higher compensation.
Usually, when a junior candidate starts requesting senior level compensation, I just give up and hire a senior candidate instead.
Also, higher compensation comes with higher expectations. Businesses have ups and downs and layoffs are a fact of doing business. When budgets shrink and headcount must be reduced, the first people to go are those with relatively high compensation for their productivity/skill level.
But no, it's not simply about having a "win" over the candidate or making power moves during the hiring process. You have to think of hiring as company vs. the entire candidate pool, not just yourself vs. the hiring manager.
Right, but remember that you're not pivoting around the initial offer number.
The hiring manager is pivoting around their budgeted range for the position. If they already offered 20% more than expected to hire someone and that person comes back requesting an additional 5-10K bump, that could put them 25% higher than expected.
Generally speaking, the people playing hardball to get an extra 5-10K are the same people aggressively negotiating the base salary number. I've given people offers for the exact salary they requested, only to have them come back and request another 5-10K just because they're intent on negotiating more at every step.
Candidly, it starts to become easy to spot the aggressive salary negotiators. Many of us current managers grew up reading things like patio11's negotiation guide back in 2012, and we're basically experts at spotting people using it against us now. When aggressive negotiators come along without an obvious BATNA, the easy method is to offer them 5-10K lower than your final offer and let them "negotiate" back up to your target number. The hiring manager wins the negotiation, but the candidate gets to feel like they succeeded in the negotiation. Happens more than you might expect.
(what theptip said below)
Why not just offer the top range and be clear with the candidate that it's the top? If the candidate has a competing offer for more, it means you're paying below market rate and you should address that problem as a business.
> Usually, when a junior candidate starts requesting senior level compensation, I just give up and hire a senior candidate instead.
I think the cynical thing here is not the take but the company you're working at. You use the weasel phrase of "the company doesn't have infinite money to pay candidates" but that just papers over the real elephant in the room: the correlation between what you pay candidates and how much value they generate for the company. If ICs are a cost center, then of course you'll treat them like commodities and try for min-risk rather than max-upside.
And then you'll lose those great junior candidates to companies like those I've worked at where they rocket up from junior -> mid level -> senior -> manager -> director in the time it might take for junior -> mid level at your company. Now if you were that junior candidate, is it a good idea to work at your company or should I assume that your company frankly isn't that compelling and as a savvy candidate I should bet on a better horse and a better jockey?
There's nothing cynical about saying that. But it will look cynical from your perspective.
If you allow candidates to negotiate, then the employees of equal caliber who don’t negotiate will earn less, and this will cause angst when (not if) they compare their comp bands.
Allow candidates to tweak their package by moving value around between the buckets for cash comp, equity, vacation, etc., but keep the total comp determined narrowly by your assessment of their level.
I don’t fully buy into this principle for startups (since leveling is really difficult without a large population to compare across) but I think this is a less cynical explanation for why a hiring manager might not negotiate at all. It’s a slippery slope.
Now, your manager might try to convince you that's this is not the case so as not to give you a raise but they obviously do have adjustment margins.
Assume it's French cheap staffing companies (90% of the employment market there), akin to tata or infosys for foreign readers.
There is a very narrow salary band for the position depending on university and age. They won't bulge for one euro. They'll simply keep looking for candidates to find a cheaper one.
They are well aware that their salaries are low. They see their offers refused time and again. They see candidates leaving in droves for better positions/industries as soon as they can. Doesn't matter, it's just business, gotta stick to the salary grid.
Thinking you're going to work for Google after reading English articles, is really harmful when the closest FAANG office is thousands of miles away in another country.
I am from minor city in Europe, with no FAANG presence, but I found another company with similar engineering first principles. Nobody cares about education and promotions are fully merit based.
NVM you are from France, right?
You really don't have any such companies?
You're extremely lucky to have found a good opportunity in a good company. I will guess back that you live in a major metro area.
France has very little tech industry for many reasons that would be too long to cover. Even the largest national companies that need technology do not hire. If you're familiar with the myth that it's impossible to fire in France, in short that's true, once you have a job it's for life. One consequence is that no company is open to hiring, they only resort to staffing/outsourcing agencies.
This is caused by overly restrictive and rigid labour law. Companies offload that problem to staffing companies. This is a way to go around restrictions and to increase flexibility in the marketplace, but actually employees (at least very qualified ones like engineers) do not really benefits.
That being said, it is possible to find permanent positions and I never worked for a staffing company ('SS2I' as it used to be called) when I was in France.
One would call it Dunning–Kruger, but it's probably merely lack of self-awareness combined with arrogance.
That's absolutely key and always true.
This is also compounded by the fact that companies often have salary bands and that annual salary increases are usually a percentage of the existing salary.
So negotiating the best starting salary is very important and has effects years into the job.
Don't downvote me for suggesting this, I'm trying to expose a weakness. I suspect more likely scenario is what @jghn shares, wherein HR is the one with the offer power, to avoid the hazard I suggested.
Also, would you actually want to work at a company where people are bleeding the company for their own benefit? I cannot even imagine the toxicity. Even hearing the offer I would be so gone.
Strictly speaking, this is not necessarily the case (although it might be, but you probably won't make a career at such a company.)
Bob's job is to make the company money. If one guy is asking $300k, it doesn't necessarily follow that Bob could hire five guys working for $30k and come out way ahead.
I've been saying this to people for years, and I'm glad to hear someone else say it. As a hiring manager, I'm not paying your salary out of my own pocket, so I don't give a shit if you want (and get) an extra $10k. My job is to fill the headcount that I've got, so as long as it fits within budget, whatever.
I don't think anything less, or more, of people who ask for extra - I usually forget by the time the person starts the job. It's not my money. I don't care.
And neither does "the company" - a corporation is an abstract legal entity that is incapable of human emotions. It's not going to get mad at you because it thinks you're greedy. Don't anthropomorphize it.
At least at my company (and from what I understand, most companies) it's a lot easier to get a pay bump when you're negotiating the offer, than it is to get a raise/promotion. When you're getting a job offer, you're a one-off special case and there are a lot of unknowns. When it's performance review season, everyone is potentially getting a salary increase, so there are tighter budgets to stick to. My advice is to get what you can up front, and worry a bit less during the annual cycle.