
How to Negotiate a Job Offer - kellegous
http://blog.upstart.com/2013/05/how-to-negotiate-job-offer.html
======
GavinB
The "Pre-Reqs" piece is not right. You really don't need to have another job
offer or a current job to negotiate. A while ago I wrote up this script for
how to negotiate a job offer with no leverage at all when you intend to accept
it no matter what: <http://bit.ly/1185CGm>

Most job offers come with leeway for negotiation, regardless of your
situation. All you really have to do is ask.

~~~
jcomis
What if they put the initial number on you? As in, they ask what you are
expecting?

~~~
eru
Actually, you always want to provide your own numbers first. That's what they
call `controlling the document' in the legal profession, and `anchoring' in
Psychology.

~~~
lawnchair_larry
It's more common advice to never name the first price.

I'm no expert negotiator but personally I think this depends on the situation.
In more than one case I've underestimated my worth and received more than I
would have though I could get away with asking for. Once they name their
price, I know it's their lower bound, so I'm comfortable asking for even more.

I think negotiating a salary has different dynamics than negotiating a sale.
For a sale, I would probably agree with the anchoring tactic.

~~~
eru
> It's more common advice to never name the first price.

Yes. But that doesn't make it useful. I recommend e.g. reading
<http://diplom.org/Zine/F1997R/Windsor/lawdip.html>

> In more than one case I've underestimated my worth and received more than I
> would have though I could get away with asking for.

Of course the other rule is: Know what you can get away with.

------
chollida1
> Pre-reqs – If you’re not currently working, and you don’t have competing
> offers, you’re pretty much out of luck. So task #1 is to make sure you have
> competition for your talents. Otherwise, you might be able to ask for
> something small around the margins (eg help with relocation expenses), but
> you’re not in position for serious negotiation.

This is so, so true. Having a strong BATNA is 90% of negotiating. When I
negotiate a package with someone, I want to do 2 things:

1) make sure I compensate them fairly. I've learned that skimping on salary is
penny wise and pound foolish. If an employee feels slighted by their
compensation they'll start looking for a new job immediately after starting
working with me.

2) make sure I'm not over paying and setting myself up for resetting my entire
salary structure. Raising salaries is part of doing business, resetting
salaries downwards is darn near impossible to do.

~~~
johnrob
I am baffled why managers rarely understand 1). In addition to slighting
employees, it makes them easy for other companies to poach. It's also messy
and expensive to counter offer once a resignation letter has been sent.

~~~
praptak
> It's also messy and expensive to counter offer once a resignation letter has
> been sent.

Not to mention that accepting a counter offer is a bad move. The offer might
just be to keep you until they find a cheaper replacement. Even if that is not
the case you will be perceived as risky - no investment in you, first to fire
during tough times.

On top of that it perpetuates the crappy tactic "pay peanuts until they
threaten to leave". Nope, counteroffers are for suckers.

~~~
betenoire
What do you mean "accepting counter offers is a bad move"? What would be the
point of negotiating then?

Is this referring to a counter offer after threatening to quit, a counter
offer during the hiring process, or both?

~~~
hfsktr
I would assume after threatening to leave.

Here's a thread from a while ago discussing counter offers:
<https://news.ycombinator.com/item?id=4970843>

From what I gather when you dislike it enough to quit you start to resent
little things. No more free coffee, no vacation, too many hours, office
politics/culture. Not the money.

Not always the case but when you get to the tipping point it's because things
went too far already.

~~~
betenoire
That makes sense to me, once I've decided to move on, I'm done: it's not about
the money at that point. But since the article was about job offers, and so
were most of the comments, I thought I may have missed something.

------
lumens
There is definitely good advice here, but a word of caution: Don't miss the
forest for the trees.

I've spent a lot of time helping people negotiate job offers. The predominant
theme is that offers will vary a bit, and some negotiation may be necessary,
but the couple thousand dollars on the table during the discussion is
virtually meaningless.

For most of the software devs reading this article, we're talking about a
couple of percent of your overall compensation -- an amount that, given the
demand of developers in the market today, will end up being taken into account
during your first performance review anyway. If you’re good, your employer
will want to keep you around and compensate you accordingly.

During negotiations your main priority should be getting the job that’s the
best fit. If it really is the best fit, the company will be presenting you a
fair offer. It may not be on the top end of normal, but optimizing for price
is bad practice when negotiating salary (much like VC term sheets).

Truly enjoying your time at work and being fully engaged and happy with your
job is worth tens, if not hundreds of thousands of dollars.

I’m not suggesting that you accept below market offers. Instead, I’m trying to
illustrate that how much you will enjoy each hour of the day _is_ part of the
offer, though it’s not written on the document a prospective employer presents
you.

Full disclosure: I’m the founder of Mighty Spring
(<https://www.mightyspring.com>) and our aim is to help people find great
fitting opportunities quickly and easily, while making these salary
negotiations much simpler in the process.

~~~
ISL
_... the couple thousand dollars on the table during the discussion is
virtually meaningless._

Perhaps in relative terms? After living on a grad student's salary for years,
it's clear that even a thousand dollars can be rather powerful.

~~~
lumens
Definitely relative -- this is a reference to 'most software devs reading this
article'. That being said, once you reach a compensation level that lets you
cover your expenses, it's wise to start thinking in these terms, even when the
relative percentages rise.

Happier workers tend to perform better, which in turn make meritocratic
performance bonuses greater, raising the overall compensation of those
workers. Enjoyment of one's job and compensation are tied much more closely
than some people realize.

------
hjay
A bit of an addition to the note on not starting a long-term relationship on
the wrong foot with your future employer.

I do think negotiating a job offer is very important. It doesn't benefit
anyone if you are feeling undervalued/underpaid at a job. Work performance
will take a hit, team dynamic will slowly shift, you will wake up every
morning dreading to go to work.

However, I do think there is a need to resist the urge to treat negotiation
like a game. Sure you may have gotten the best offer possible for your
skills/experience, but how much do you need to be satisfied and do your best
work? If you get hired having massively oversold yourself and the value you
bring to the team, are you sure that would be a good start for your new job?

I recently negotiated a 7.4% increase on my base pay for a new job. I could
have easily negotiated a 16% increase but I didn't. I want both parties to
start the relationship happy. If either side feels like "did I just get
cheated out of X?", that is a loss for me. Sure, any relationship may go bad,
but why start a relationship if it's not going to be sweet to begin with?

~~~
roguecoder
It's called "capitalism". By accepting lower-than-possible wages you are
merely distorting the market and boosting corporate profits.

The only thing being negotiated is how much of the surplus you get and how
much they get. They won't hire you if you aren't going to be worth
significantly more to them than they are paying you (thanks to sticky costs).

------
jtbigwoo
One more thing from someone who survived a couple startup bubbles: Don't value
shares as more than a dollar or two unless the company is the equivalent of
Microsoft in the 1990's. It's easy to talk yourself into a "small" valuation
of $10 or $20/share when the shares are much more likely to be worth $0.

~~~
csbowe
There is really no way of knowing how much those options are worth without
knowing the size of the pool and valuation of the company, anyhow. I treat
these as monopoly money unless I actually know what percent of the company I'm
being given. Lots of things, namely reverse splits, before an exit can greatly
affect the value of those shares!

~~~
aaronbrethorst

        I treat these as monopoly money unless
        I actually know what percent of the
        company I'm being given.
    

Knowing your percentage doesn't make it any less monopoly money.
<https://news.ycombinator.com/item?id=5771831>

------
conroe64
Here is a quick tip, especially for those non confrontational types. When the
company makes an offer, just say "Hmm.." and pause for a bit. If the person
offering the job is insecure in what they are proposing, they may think you
are about to decline and this may provoke them into upping the offer.

If they don't up the offer, it's easy to just say yes after whatever they say
next. So, you aren't really risking anything.

~~~
roguecoder
I bought a car this way once. It was the last day of the selling season and
the dealership was really, really close to meeting some goal. Every time I'd
break eye contact and look thoughtful they'd lower the price.

I have never felt so powerful in my life :)

~~~
ams6110
That's just what they wanted you to think :)

------
Xcelerate
So, as a new employee out of college, if someone offers 100K, and you reply
with "130K and we have a deal" are you going to be 1) laughed at and rejected
2) rejected 3) considered?

I've always been one to just accept whatever -- "Yeah, that sounds good!" --
but I'm consciously preparing myself to avoid this tendency after I finish
grad school.

~~~
vidarh
You will almost certainly be considered. I've negotiated my offers up anything
from 20% to 50%, which means usually my first counter-offer was higher than
that.

I'd _never_ just say yes.

By the time someone has made the decision to make you an offer, they have
invested time in you, and will be psychologically invested in their decision -
nobody likes "losing out", and so they will look for reasons to meet you. As
long as your counter-offer is not ridiculous (and tacking on 30% is not), they
will negotiate.

Just don't across as making hard demands, and give _reasons_ even if they're
total nonsense. People yield more easily if you give them an excuse to.

The irony is that people also tend to feel they made a better deal if they
have to fight for it, even if they end up giving a lot.

~~~
StockOptionCnsl
Well said.

------
300bps
As someone who has been in IT for over 20 years and makes multiples of the
highest salary used as an example in the article, I can state that I agree
with all the advice given.

The post does a good job of walking the fine line between getting what you're
worth and coming off like a conceited jerk.

There are more advanced salary negotiating techniques and ways to get into
positions to negotiate your salary but those tend to be situation specific.

~~~
lawnchair_larry
You make >$300k _salary_ in IT? Please share your advice.

------
pmorici
Salary negotiation really dampens my enthusiasm for potential employers. Maybe
it's just the game and I'm being unreasonable but getting a low ball offer
makes me question what kind of place a company would be to work at.

------
victorhn
I suck at this stage of the new job process, at my current job i took the
first offer which was "decent" money , largely because i didn't have much
options (This is like dating).

My excitement about my new job and salary lasted about 3 months, from that
point i feel like i am being underpaid, is it worth to try to renegotiate my
salary when i have been only 3 months in a company? Otherwise how long should
i wait to ask for a raise?

~~~
johnrob
If you are indeed underpaid, the first thing you need to do is get better
offer from another company. At that point, your current company has to match
or you leave.

Don't ask for more without an offer - it might work out but you risk
compromising your current position without a having a backup.

~~~
antjanus
If you ask for a higher pay based on an offer from another company, you're
already screwing yourself over.

Your current job MAY accept your pay increase but if they do, there's already
a break in trust. And you're setting yourself up for being replaced. You may
as well take that new offer right now.

Better option is to negotiate based on skills, experience, responsibilities,
and other factors.

~~~
byoung2
_You may as well take that new offer right now._

That has been my strategy 4 times in the last 6 years. You can get a much
bigger raise if you switch companies than if you stay and wait for a raise. If
I had stayed at my first programming job, even with generous 10% raises every
12-18 months, my salary would only have increased by 50-70%. Instead, by
switching jobs, I was able to get 20-35% raises each time, and now my base
salary is 113% higher than it was 6 years ago.

~~~
bconway
Beware that this can come back to bite you. If I look at someone's LinkedIn
profile and see a slew of jobs listed in months, not years, their resume is
going in the (metaphoric) trash. I need to get at least 2 years out of people,
preferably 3 (on the low end).

------
daniel-cussen
> Leave something on the table

This is super important. In business, everyone is trying to make money, and if
you don't help others achieve that goal, you are a dysfunctional
businessperson. And generally, leaving some value on the table translates to
better relationships with people—a natural consequence of giving people what
they want. An employer becomes a boss when he or she can't get you to pull
your weight.

You need to deliver.

------
pan69
The article mentions a signing bonus. Does anyone have an idea on how common
this this and in what type of situation asking for a signing bonus is
appropriate and what some of the common numbers are in these cases?

~~~
lumens
Signing bonuses are fairly common. It's not a number that is well-arrived at
by picking at random. The figure should be based on a calculated value
exchange: ie,"I'm not fully vested at my current company, and will be giving
up $5k worth of stock options if I leave. I'd like to have a $5k cash signing
bonus as part of any new offer I'd take to offset that."

~~~
StockOptionCnsl
Well said. It's all about finding some "reason" to have a bonus -- something
given up to take the position. Like someone said above, it doesn't have to be
a great reason. Just a reason.

~~~
Maert
How common is this in Europe? For example, is relocating to another country
something that might be a good reason for asking a signing bonus? How do
companies see this?

Note I'm interested in experiences from Europe, I think that there's lots of
hiring "cultural" differences between the continents...

------
halacsy
i think article is just wrong as it is. Maybe because I'm on the other side
hiring engineers. But we don't negotiate salaries. Two factors: what makes you
happy/enough (do not think about your salary but about your challenges) and
what can we expect from you. I don't care how much money you would make at an
other company, because you want to join our company. The first part is very
personal. People having mortgage and two kids just overvalue themselves.
Immigrants in US (and I guess everywhere) just don't need as much money as
they don't see the neighbour's grass.

~~~
mc-lovin
Most companies are willing to negotiate, especially when you have a counter-
offer. So in general, it is good advice. Most companies do not have the
attitude of "I don't care how much money you would make at an other company,
because you want to join our company" because they know that most people value
some combination of enjoying their work, and how much they get paid, not just
one or the other.

>The first part is very personal. People having mortgage and two kids just
overvalue themselves. Immigrants in US (and I guess everywhere) just don't
need as much money as they don't see the neighbour's grass. Can you explain
what you are saying here? Are you saying that only immigrants are willing to
take the offers you make, or that you make higher offers to people who
overvalue themselves?

~~~
halacsy
sorry for the noise. I was wrong. I can't make the case.

------
ams6110
One thing to keep in mind, specifically about positions in academic
institutions, but perhaps others: you have to get what you can get on your way
in. Once hired, you will not get more than cost-of-living raises (if that)
with perhaps a percent or two leeway for performance. The only way to get a
real raise in these organizations is to get promoted to a new position, which
is why they are constantly doing internal reorgs and creating new titles and
reporting lines for the same bunch of people.

------
gangst
Everything said in the post is easy to conclude if you learn a little bit
about negotiation and understand some more niche things like how to valuate
shares of a company.

------
hippich
on contraire, i would recommend always negotiate price you want and not settle
if "you are going to work for this company anyway". Reason is simple - every
year what you earn gives you 3% less purchasing power on average. If you are
not getting at least the same increase in income - you are losing.
Unfortunately, not all companies consider annual salary increases and ones
which do - do it on their own discretion.

So you have to have something in back pocket when it is time to leave this job
and look for new opportunity and use you current wage as a leverage to get
more. As such, you should make sure you are compensated fairly. It is just
like bonus vs. early salary increase. Higher base salary means higher base
salary for the next job (and for current one higher bonus, higher annual
increase, etc). Do not settle for bonuses/stocks/"unlimited" vacation and any
other similar tricks.

------
StockOptionCnsl
This is very helpful. I've been impressed with my Stock Option Counsel
clients' thoughtfulness in the "Run the Numbers" step. This is not easy with
private company equity offers, but there is a right answer for each person if
they put some thought into it.

------
dsr_
So... is that photo of Tom Cruise licensed properly?

------
bengrunfeld
My method is to do a full analysis of their company, and then make a very
nicely formatted doc listing everything that I thought was bad, and a full
explanation of how I would improve it if I were hired there.

Essentially, by using this technique, you've created a job for yourself, and
given yourself value before you've even started there.

Then, when it comes to salary negotiation, you choose the highest available
figure of their range and say with enormous balls that you're worth it because
of all the things you can do for them - re your doc.

Works a charm for me every time.

~~~
rubberband
I think this is an interesting idea, but wouldn't it come off a bit preachy?
Like "I haven't even worked for your company _one day_ and I already know a
better strategic direction to take it. Your management is useless. Hire me."

Maybe I don't have a good enough imagination on what to analyze, though.

~~~
bengrunfeld
Since I am in marketing and web development, I go through all of their online
assets and their front-end code/design.

So far, this technique has gotten me 3 good paying jobs, because I'm not
trying to please them in the interview, I'm trying to show them how I can help
them become a more successful company. Plus you win the high ground. You just
have to do it in a constructive and respectful way.

