
Salary Negotiations, Don’t be Tough, be Honest - jnorthrop
http://jnorthrop.tumblr.com/post/16631034370/salary-negotiations-dont-be-tough-be-honest
======
DanielBMarkham
Negotiating does not have to be adversarial, but it has to be _negotiating_.
That means both sides are willing to walk away amicably from the table.

If you're not willing to walk away, you're not negotiating -- you're just
having a conversation about salary. You've already decided you're staying; the
only thing being decided is how much money your feelings are worth. Not a good
spot to be in, for either you or your boss.

I like this author's advice to do a lot of research beforehand and have a
realistic idea of where the market is. You should also have a realistic idea
of what it would cost to replace you -- probably much more than market salary
for a similar job. You need to have an honest -- and fun -- conversation about
rates. To start that conversation, you need to be clear with your boss that
the starting point is your leaving to find a better job. (But this must be a
true statement!) Given that starting point, you both talk and share
information about how to reach an agreement you both like.

Yes, the emotional part is the worst. That's why you make those tough
emotional decisions before you walk in the door. It's also why you give your
boss plenty of time to step back and think through things dispassionately as
well. Coming in half-assed, with aggressive demands, is a good way to get
fired. Coming in well-studied, with no pressure and just trying not to rock
the boat, is a good way to stay at the same job and salary for the rest of
your life. You have to learn the art of working between these two extremes.

It has always amazed me the lack of education we provide people in
negotiation. It's the one business-related practical life skill that nobody
can do without.

~~~
WillyF
I don't think that both sides have to be willing to walk away for it to be a
negotiation. Both sides just have to believe that the other side is willing to
walk away.

------
jroseattle
I've found, more often than not, when a company takes a hard negotiating
position upfront with engineers, it ultimately proves to be penny-wise and
pound-foolish. Many times, what a company "saves" in negotiations is
immaterial relative to the hiree's compensation. In exchange, the company
immediately begins a relationship with an engineer on a sour note and sends a
huge signal about company loyalties and values.

I'd recruited an engineer to join my team, and he tells me his comp
requirements (90K salary). For the position, we budgeted 96k. A stellar
engineer and ideal team fit, I thought he was underpaid at that, but that's
what he asked for so I prepared an offer.

In preparation, the CEO (who signed off on such things) sets our initial offer
to 85K. I was surprised -- why would we not offer the candidate 90k salary?
The conversation went something like this:

    
    
      CEO: Offer him 85K.
      Me: Why? He asked for 90K, and we've budgeted 96K.
      CEO: I want to leave some room for negotiation.
      Me: Room?
      CEO: Yeah. I think we can get him to come down from 90K.
      Me: You haven't met him yet. Why do you believe he would accept a lower offer?
      CEO: I never take the first offer at face value.
      Me: I've talked to him, and he earns 90K in his current position. He doesn't want to
      take a pay cut.
      CEO: Well, let's see how much he wants this job.
    

I make the offer, and the candidate responds "I don't want to take a pay cut,
and can't accept your offer." The back-and-forth begins, and we finally come
to agreement -- at 90K.

And while the engineer accepted and joined our team, I could tell that the
offer negotiation made him uncomfortable and left a bad taste in his mouth. He
did a great job for well over a year, until he left for a new position. He
explained to me that he received a better offer, and that the other company
was "more inviting".

After his departure, the CEO lamented how engineers seem to have no loyalty.

Indeed.

~~~
lincolnq
This is a great story. It illustrates everything perfectly:

Why, as employee, you're probably getting played and that you should ask for
more money.

Why, as employer, it's advantageous to be magnanimous and not lowball the
employee.

And it illustrates the power imbalance.

~~~
jroseattle
Very prudent. I try to be as straight-forward as I can with candidates, and I
insist on honesty from both sides.

As a side note, I originally wanted to offer the candidate 96K because I knew
he was worth it (more, actually.) But, the CEO decided to press on an engineer
who wasn't all that driven by money. A phenomenally poor decision.

I resigned from my position at a later date, and our hiring practices were not
without consideration.

------
tptacek
A worrisome mentality in the post and in some comments here: the words
"should" and "shouldn't", the concept of "fair", "feeling sorry" for people
who have to negotiate, the word "ridiculous".

I think you should be careful with sentiment analysis on a forum like HN. This
place is overwhelmingly populated with people for whom the concept of salary
negotiation is repellant. One could get a seriously skewed idea of what to
expect from negotiations from comments on HN.

The fact is, a huge number of places _that you'd actually want to work at_ are
going to treat salary negotiation as the business transaction that it is. Not
taking the transaction seriously is going to cost you thousands and thousands
of dollars.

It's true: the worst places to work will be the ones who are most aggressive
about negotiation. But that observation _totally misses Patrick's point_. You
don't have to get screwed by a hard-nosed negotiation to lose out on thousands
of dollars of comp. In fact, if you don't take negotiation seriously, you'll
lose thousands of dollars without even noticing, because your social norms
will blind you to what's happening. Patrick isn't just talking about how to
handle stupidly tough negotiations. He's talking about _all_ of them, even the
nice and friendly ones.

The range between your negotiating floor and the employer's negotiating
ceiling is the spread. Any dollar figure you accept below their ceiling is a
dollar you gave them. From the way people talk about negotiation on HN, my
guess is that 9 times out of 10, HN'ers take a number smack in the middle of
the spread --- meaning, they've coughed up high 4 digits (and often 5) back to
their employer. And they feel good about it! They write blog posts about it!

If you think you work on a team where you don't have to negotiate, because
everyone's grown-up and knows the score and pays people what they're worth,
seriously consider that you may (probably not intentionally, but still) be
getting played.

~~~
nostrademons
"It's true: the worst places to work will be the ones who are most aggressive
about negotiation."

I'm not sure that's true. Google is a notoriously tough negotiator - not just
for salaries, but for their food suppliers, data center locations,
acquisitions, basically everything - but it's also a pretty good place to
work. I've heard Warren Buffett and the Berkshire Hathaway properties are too.

The best people to do business with seem to treat negotiation as a business
transaction that they will press every advantage they have on, but then once
you're in, you're in, and they'll be loyal to you. And they expect you to do
the same. It seems to be worth cultivating that skill - respecting the other
party, but also respecting _yourself_ enough to ask for what you want and be
willing to walk if you can't get it.

Come to think of it, this is generally called "assertiveness" and is typically
seen as a desirable quality in life.

~~~
dpritchett
You'll still need to renegotiate regularly since the value of the relationship
drifts over time. Are you still worth exactly what you were on the day you
started your current gig?

------
barrkel
This also depends on the nature of the organization you're negotiating with.
The people first asking about your current salary / expectations of salary in
a larger organization will often be from HR, collecting information that
they'll feed up the organization, probably your boss-to-be's boss. The higher
up this goes, the harder the heads are at negotiation; frequently, your boss-
to-be, at the salary negotiation level, is just a go-between. He'll have an
expected budget, but to push higher he'll have to go to his own boss, and that
dynamic favours the company rather than the employee.

You need to balance the risk of getting off on the wrong foot, with the
potential that you can be leaving a _lot_ of money on the table - I mean, on
the order of quarter of a million to half a million dollars over the course of
your stay with that company is quite likely if you don't negotiate well - not
to mention a bitterness that can grow over time. And switching jobs may not
even be a cure here; if it's a job you enjoy, it's not much fun having to
leave it in order to get your worth on the market. It's best to get both.

~~~
kls
_frequently, your boss-to-be, at the salary negotiation level, is just a go-
between._

At most larger corps this is very true, I was a VP at a large company and I
would project my personnel need, I would also give a top end salary, which I
would provide as market + 10%. From there I never heard about salary, I gave a
go no go on hiring and HR worked out salary. It is a pattern that I have seen
a good deal in larger orgs.

------
nhangen
I'm in an interesting position because I just negotiated a raise, and am also
negotiating with candidates for an upcoming hire.

I earned my raise by first earning it in effort, but when it came time for the
negotiation I know without a doubt that if I hadn't made it clear I was
willing to walk away, I wouldn't have received the raise. The boss thought he
could appease me with talks on potential numbers, but I stood my ground and
said that I needed an answer within 24 hours. It wasn't until I, politely of
course, demanded a yes or no that I received a yes.

Now, in the hiring process, I have a limited amount of money available to pay
a new employee. I may be able to get another 10%, but not much more than that.
I do ask candidates to offer a number, not to screw them on salary but to know
how apart we are. If we're 20k apart, why should I waste their time stringing
them along?

~~~
prophetjohn
If getting the potential employee to offer a number is genuinely, purely in
the interest of not stringing them along, why don't you offer the first
number? "This is the salary allocated for the position. Is this a salary you
would be comfortable with?"

Now you have a way to both not string them along if you're $20K apart and to
not let them accidentally undervalue their own worth by a significant amount.

------
bluedevil2k
One little quick thing I've learned over the years, the more HR is involved,
the more likely it is that you'll be mislead and deceived.

~~~
gaius
Human resources look at you like you look at a server.

------
alexwolfe
Harvard Law School's free course on negotiations. Covers all aspects of
negotiations.

[http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcas...](http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=379064206)

------
PaulHoule
I like not giving a number.

It makes the other guy squirm.

He's worried not just that you'll get more chips, but that the whole deal that
he's worked hard to put together will fall through.

If you throw some number out at this point, they can just work you down. If
they throw out a number, you can typically work up, and if the number they
give is way too small you understand what you're dealing with.

~~~
jroseattle
If someone won't tell me their comp requirements to start, there is no
possibility I make an offer.

I need to know first-hand if we're in the same ballpark. If the candidate's
comp expectation exceeds the range we've selected, we can either move on or
adjust our pay scale for the position. If the candidate's comp expectation is
lower than the pay scale we've set, we need to evaluate if the candidate
really meets the position (assuming lower pay = less qualified candidate.)

Not to say the strategy doesn't work for some people, but it definitely fails
with me.

~~~
johngalt
I find it hilarious that you are trying to act as if this is anything but a
negotiation ploy on your part. If it's so vital that you know you're in the
same ballpark, why don't _you_ give the salary range up front?

When someone insists on a number "up front" with me, they get a high range. If
they insist on a specific number, the get one in the stratosphere. They've
forced me to price in all the risks. Without the interview I have no idea what
your organization is really like on the inside (I'm interviewing you as well).
By insisting on a number before the interview starts you send a very strong
"bargain shopper" message. So I'm pricing in the likelihood of:

-crappy benefits -unpaid overtime -future trouble with raises -my peers will only be people who fell for your tactics

Ask yourself if you want employees that think ahead, and evaluate a situation
like I do. You won't get them with your current mindset.

~~~
jroseattle
We pay better than market salaries. I don't "give" the salary range because
I'm searching for the right candidate. In most cases, we adjust our offers
higher than what we expected we would find in candidates.

These aren't tactics, they're filters to see where candidates are in line with
our evaluation and what we expect to pay them.

I can tell from your comments that you already assume I'm trying to screw you
over and repress your compensation. If you ever dealt with me, you would know
that's not the case.

Given the team we've constructed, I'm pretty sure we've got the right folks.
Thanks for the suggestions.

------
aurelianito
But a lot of times the other part is not being honest nor nice. See
<http://news.ycombinator.com/item?id=3521817> for an example.

I believe in tit-for-tit. Why should a potential employee be upfront when the
employer is not upfront?

~~~
m0nty
Personally, I would not work for anyone who wasn't being honest with me, but
I'm a bit old and gnarly like that. I believe integrity to be one of the key
ingredients in any work relationship, and I regret all the time I've wasted
working for and with people who lack it. Conversely, honest people are always
a pleasure to work for.

The last job interview I went to, I took with me the attitude that "if this
job isn't exactly right for me, I will say so and politely walk away." I put
on the table what I wanted to do, what my aspirations were, and how much money
I wanted. I made sure I was scrupulously polite and scrupulously honest. It
helped with the negotiations, and it helped now I've started the job - it
removes a lot of the confusion about my role, because we agreed it in advance.
(I've found too many people seem to think "sys admin" or "programmer" means
"general-purpose IT skivvy", which is another thing which ruins the work
experience for me. It still happens, but less so because of the prior
agreement.)

Still, things aren't 100% perfect, but I feel the way I conducted the
interview for this job is one I will use again, whether it be full-time
employment, freelance or contract work: be honest, be polite, and be prepared
to walk away.

~~~
mgkimsal
"I would not work for anyone who wasn't being honest with me".

The big point in the earlier discussion this week was that _you don't know_ if
the other party is being honest. They can do background checks on you, credit
checks, employment history checks, etc (with your consent of course), but you
have no idea about their background. With public companies you can read some
info about them, but it's not personal, nor does it go in to departmental
politics and budgets and such.

A potential employer saying "our hands are tied, we can only go up to $75k for
this position" may be telling the truth, or they may be lying. _You can't tell
the difference_. That was the gist of the earlier posts.

"Be prepared to walk away" is core negotiating advice for any commitment -
marriage, car purchase, job search, housing, etc. Not having the guts to walk
away means you will make decisions based out of fear, rather than out of a
position of strength.

~~~
m0nty
> "our hands are tied, we can only go up to $75k for this position"

If I needed $80k, I would then say "I'm sorry, but I have expenses to pay, a
family to keep. I can't work for less than $80k." If he insisted, that's when
I would shake hands and walk. It wouldn't matter, in fact, if he was being
honest or not. That's my limit. In this case, it's no different to bidding on
eBay: I have $80 for this purchase, if it goes higher I will maintain self-
discipline and drop out of the auction.

~~~
mgkimsal
The overwhelming majority of people won't just walk away. They get hyped up in
to 'negotiations' and start panicing if they can't get what they want/need.

It's less so in the IT world right now, but in most other fields, there's much
higher unemployment. People don't "just walk away", and often accept a
situation that doesn't fit their wants/needs, because _needing_ income ends up
trumping everything else.

For someone not in IT right now, who needed a job, they're at a strong
disadvantage because of the information imbalance during interviews. Congrats
on you being a rather rare individual who actually does what is recommended
(walk away) - most people don't. And it comes back to not being able to tell
if the other side is lying. And in some cases, being desperate enough to work
for/with someone who they suspect or know is lying, but needing the job bad
enough.

~~~
m0nty
It has occurred to me that being in IT is possibly one reason I can do this,
but otoh I have noticed that companies increasingly want to "commoditise" IT
workers, so repeatedly low-ball their offers until they get someone who is
willing to work for low pay and goodwill. I must admit, that has sometimes
been me, but it won't happen again ;) Also, I have been in situations where I
_needed_ work, and I think now it would have helped if I had adopted my
current strategy. It's a bit like dating: look too needy, get neglected. Look
confident, people think you're worth having.

------
johngalt
Don't use honesty as an excuse for letting someone pick your pocket. Here's
what happens when Mr. Niceguy mentions his requirements first.

You: I'm looking for $90k

Boss: Oh I think we can get you there, we start everyone at $70k then adjust
based on performance. Perform well and you'll get there (you won't).

You: Oh, well I'd prefer $90k to start, and the position is worth $90k.

Boss: We don't make exceptions, and you don't really meet requirements X and Y
for the position. But we'd like to give you a chance to learn here.

You: No I really deserve 90k, I might go 85k with the proper benefits.

Boss: Ok so will start you at 75k, and our normal benefits package of barely
subsidized medical/401k/2-weeks vacation is easily worth 10k. Glad we could
come to an aggreement.

You can be tough _and_ honest. Negotiation isn't about being dishonest. You
can negoatiate very well and be honest the whole time.

~~~
Symmetry
Presumably then Mr. Niceguy then walks out the door, if he was actually being
honest about requiring 90k.

------
artsrc
This is a game which is in general one sided. The employer knows more, and has
less stake in this deal (more market power).

A one sided information delivery from you essentially makes you even less
powerful.

The only way this works is if your boss decides to be fair or good for you for
their own reasons.

------
chrisbennet
Remember companies need _you_ in order to make money. I had lunch with a guy I
used to work with the other day and he was telling me that he was having a
horrible time finding engineers to _even come in for an interview_. This is
north of Boston, not Silicon Valley either. Good engineers have more options
now than we're accustomed to.

When a recruiter/HR person/interviewer asks you about your salary
requirements, ask them what sort of engineer they are looking for:

A) average (you don't want to work there) B) above average or C) way above
average

If they answer "way above average" you can say "Well, there is your answer!"

When a company doesn't want to pay much, its a signal that they don't place
much value on engineers.

------
publicus
Work with a recruiter, get lots of offers, let them bid the salary up, then
take the best offer/job.

It's really that simple.

