Re:Salary negotiations for techies (2011)
by stygiansonic on Sunday January 18, 2015 @03:23PM
(#8908715)
Getting around "cost plus" thinking is definitely a major point. I think developers, as a group, are generally concerned with the concept of fairness and "cost plus" thinking is a huge part of that. Take, for example, the top comment in this thread[0], which posits the solution to airlines' problem with SkipLagged as pricing a "ticket based on what it costs and a fair margin".
Things rarely work like that in the real world. This is not to knock the concept of "fairness" as being naive or useless, but rather just to point out economic realities: Companies do not necessarily price things in terms of "cost plus", but rather try to optimize. In some cases, they may sell certain items at below cost or near cost in order to attract customers for some other items.
In fact, negotiating for a market rate can be seen in the light of fairness and "cost plus". If you suspect you are underpaid, and research (Glassdoor, etc.) suggests this, then implicitly, your time is less valued than some of your colleagues. I doubt many would say their time "costs" less than others'; thus, would such a suggestion be fair?
1) do value based pricing not cost-plus for your labor (ask for what the market will bear, not your cost of living plus some small 'profit' on top of that)
2) have a batna (https://en.m.wikipedia.org/wiki/Best_alternative_to_a_negoti...), i.e., another offer so you have leverage in the negotiation
i've ignored these tenets exactly once, and that remains an unpleasant memory for me. every other time, it's resulted in increases of 10-40% in comp & benefits. of course, you should balance comp with qualitative advantages, but the point is not to just let yourself get screwed. =)