

Negotiating a Job Offer with a Company - mikeinterviewst
http://blog.interviewstreet.com/2012/01/negotiating-a-job-offer-with-a-company/

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tptacek
Prospective employers want your current salary so they can get a bead on what
the negotiating floor is. Most prospective employers hear "$80k" and
immediately assume "we can get this person for $88k". You might be worth $90k,
$95k, or $110k, but once you said "$80k", you gave the prospective employer's
HR team an excuse to play hardball: they know they're not going to insult you,
even if their opening offer is $20k lower than what they expected to pay the
role.

Don't tell people your current salary unless you _know_ it's going to help
you, and be wary of taking negotiating advice from anyone who thinks you
should disclose it as a matter of course.

Your current salary has _nothing to do_ with how much you are worth to a new
employer.

~~~
patio11
Without implying any bad will about the author of this post, who is a
recruiter, recruiters are incentivized to close deals, not to get you the best
possible package. It is possible that this background would convince a
recruiter that advice which is against your interests is still a good idea,
because if he adopts advice which will predictably results in employees
underpricing themselves, his conversion rate from interviews to paychecks will
improve, possibly dramatically. If his placements are routinely leaving $10k
on the table, that only costs him $3k per placement, which might on a
subconscious level either a) not be motivational or b) might be a totally
rational decision because of the increased volume of placements he gets by
advising people to take any reasonable deal.

My father is a real estate agent, and real estate agents have demonstrable
blind spots (seriously, academic literature exists on this) for negotiation
when negotiating for clients versus when selling their own homes. When they're
selling their own home, five hours of extra work might add $5,000 to the sales
price, so of course they go the extra mile. When they're selling a client's
home, five hours of extra work might add $5,000 to the sales price _but their
commission check only goes up by $300_ , so they'll generally opt to tell you
"That's a really fair offer. You should take it. Can we close this today? I
have a young couple who I'd really like to meet with now about buying a
brownstone, and the expected value of my time with them is way higher than the
marginal value of my time with you. Oh whoops did I just say that out loud?"

~~~
Peroni
I can see where you are coming from but ultimately I disagree. The strong
counter-argument in the comments here has prompted me to write a follow-up
post clarifying my position in detail so hopefully that will help eradicate
the notion that I would weaken a candidates negotiating position for my own
benefit regardless of whether I do it consciously or otherwise.

~~~
tptacek
But you're just one out of tens of thousands of recruiters. You have to
believe something pretty radical to think that recruiters on the whole are
immune to incentives.

We can safely assume that you're conscientious and that you go out of your way
to defend the interests of candidates. Then we can move on to telling
developers how to deal with normal recruiters.

This particular debate, just remember, is about whether you should disclose
your current salary to a recruiter or prospective employee. The answer is: you
simply should not do that, full stop. If you disagree, it would be helpful if
you disagreed directly and provided evidence for your view; that would be more
constructive than centering the discussion on your own professionalism and
ethics, which nobody wants to call into question.

~~~
Peroni
I had originally included a lengthy argument against disclosing your salary to
recruiters specifically. That element was removed due to the fact that the
post was aimed at graduates who most likely won't have to deal with recruiters
for a number of years. In my follow-up post I am dealing with both topics
specifically. Not negotiation but purely the facts as to why I think it's best
to withhold your salary from a recruiter and disclose it to an employer.

Fortunately I am not _just one out of tens of thousands of recruiters_. I've
been in this game for three years, prior to which I was on the other side of
the fence managing a team of 8 people, regularly interviewing potential
employees and entering negotiation battles as an employer with a strict
budget.

------
Drbble
This article contradicts the single largest pro-employee piece of wisdom
("don't walk up to the table with your cards showing") without providing any
supporting argument. What does your salary in an unrelated job have any
relevance at all to another company? Any company that asks the question has
shown that it is not "worth its salt" and so the "trust me" advice immediately
dissolves.

I told my personally retained recruiter my previous salary, under promise of
confidence, only to hear it quoted back to me by the hiring manager. I watched
the same thing happen on the other side when I sat on a hiring committee. Why
would anyone believe him? Divulging your current salary is basically asking
for that plus 5%.

~~~
tptacek
To pile cynicism on top of cynicism, remember that recruiters have the same
incentive structure as real estate agents: they make their money on deal flow,
so they're motivated to spend as little time on you as possible.

Giving a recruiter your current salary allows them to be choosy about where
they send you. It may keep you away from lower-paid opportunities, but also
might keep you away from more senior roles.

Not generally a fan of recruiters at all, really. If you code and you're good,
you'll do better on your own.

~~~
patio11
Wow, we _really_ think alike. I posted the same thing and then saw this.

------
gergles
The advice about "disclose your salary because companies are honest and fair
actors" is still incorrect. Companies are entering into a business deal with
you, and they will negotiate it like they negotiate every other business deal
- trying to pay as little as possible for the product they want.

The author of this post, as a recruiter, is incentivized to get you to
disclose your salary (see the excellent post by patio11 above). It is still
never to your advantage to do so, unless you are grossly overpaid.

The point about not signing NDAs/IPAs is good, and you may be able to
negotiate these (I negotiated away the most onerous part of the IPA at my
current job by simply lining through the offensive part and initialing, but
you may not be that lucky.)

The general advice for any negotiation is still "he who says a number first
loses" and you should still go into it with that mindset, regardless of who
you're talking to (a recruiter, a hiring manager, HR, whatever.)

Your past salaries have nothing to do with what you will cost the new
employer, and software people absolutely _have_ to learn this if we ever want
each other to be able to negotiate effectively and raise the salary floor.

------
bermanoid
Does anyone here have any experience (and advice about) negotiating against
intellectual property clauses? I'm particularly interested in whether fairly
large companies are ever willing to give these up, or if it's just part of the
price one has to pay for accepting employment.

Right now I'm working as a consultant with a team that keeps trying to
convince me to consider coming in-house; up until recently, moving wasn't an
option for family reasons, but now, it's become more realistic. It's a great
team that I really enjoy working with, and I'm sure that the offer would be
more than fair (my current consulting rate implies a pretty tight range for an
offer, one that's in line with what they pay their engineers currently), but
unfortunately, they are a subsidiary of BigCorp, and I know for a fact that
BigCorp places some restrictions on outside projects, and that makes me
nervous - having had to aggressively edit my consulting contract so that it
was reasonable (to be fair, they accepted those edits without undue drama),
I'm all but sure that their employment contracts are going to be very
restrictive, and likely include full IP transfer clauses, not to mention long
term non-competes and NDAs. State of California, if it matters.

Is it a complete pipe dream to hope that I might be able to get them to strike
some of those restrictions, or will some big companies play ball on those
matters? Non-compete clauses that terminate after a reasonable period I can
(reluctantly) accept, but losing the ability to do open source work and/or my
own projects would be too much for me, I'd rather just keep on keeping on as a
consultant...

~~~
tobiasSoftware
I really want an answer to this too. I just graduated, am nearly broke so I
need my first job. However, I have several ideas for a startup that I want to
implement soon, I'm at the point where I can have a working business within a
couple months. The problem is that I know getting a startup to the point where
you can live off of it will take much longer, thus I NEED a real job, and want
the startup just to be a few hours a week on the side for the next couple
years. However, this startup is my life dream, I don't care if I can't live
off of it but I need to get it out there and see what happens at least, and I
am pretty sure I would turn down a job if it prevented me from doing that. So
I'm kind of stuck if companies will truly demand me to turn over any
programming that I do during my employment with them.

~~~
rmc
There is no hard and fast rule. There are loads of Real Jobs™ that don't
require any sort of NDA/IP thing. It is definitly not 'standard' for all tech
jobs to include that. Also, if a contract has that stuff, you are free to
negotiate that. There is no philosophical difference between negotiating about
salary, and negotiating about out of hours work.

There is a shortage of IT talent. Ergo you are in a strong bargaining
position.

------
skrish
"In reality, the only things you need to focus on away from the actual salary
are specific details surrounding Intellectual Property Agreements and Non-
Disclosure Agreements. More and more companies are stifling their developers
creativity by restricting them from contributing to open source projects...."

Agreed. This is something that is essential to consider. With stackoverflow
karma, github check-ins & the like becoming a way to evaluate your expertise,
this is something that should be considered carefully.

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kibibyte
I have seen a lot of posts and advice like this about increasing your starting
salary by negotiating with your recruiter. However, I am a college student
looking for an internship. How much of a negotiating position would I have? Is
it even advisable for me to try negotiating, considering that I'm only a
college intern?

~~~
rmc
Can you programme FizzBuzz? If so, then you could consider getting a paying
job.

Unless you really, really want to work at $BIG_COMPANY, and you could only get
an internship with them, or you are only looking for something for 3ish
months. If you are looking for 'experience' and you have a year, get a paying
job.

~~~
kibibyte
I'm looking for 3-month internships currently. I suppose that it wouldn't be
advisable in this case, would it?

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derekja
I was at MSFT for a decade or so and several times saw folks who turned down
the first offer get a second offer that was much more to their liking. The
hiring manager has to really want you in order to push back sufficiently with
HR, but if you're unhappy with the offer and willing to risk losing the job
I've seen it pay off...

~~~
patio11
_willing to risk losing the job_

In almost all cases, the original offer is still on the table. "Negotiating
with the decisionmaker will cost me this offer, so don't negotiate" is
something which is only really believed by engineers who are -- and I say this
with love -- abominably incompetent at negotiation. This is regrettable, since
skill at negotiation matters a whole heck of a lot more than skill with Chef
or mastery of Postgres trivia for determining both the instant results of the
negotiation and one's larger career trajectory.

Still working on that blog post on negotiation, should be up early Monday for
more elaboration on this.

~~~
xiaoma
As someone who's been on the other side of the table (in multiple businesses),
I really can't agree. In most cases, a business has a desire to fill a
position fairly quickly, and especially in start-ups and small businesses,
cost is a major concern. In larger businesses or governmental organizations,
HR regulations and bureaucracy become a major factor.

I've personally filtered out dozens if not hundreds of otherwise qualified
people due to salary concerns without a second thought. In two cases within
the last six months I've seen the party who pushed for a higher salary reach
out again only to find the position filled.

My guess is that you've never experienced an employer's market. It may not be
one in silicon valley, but it is for most engineers around the world. Being a
white guy in Japan, and then a guy with a popular blog following, you've had a
far, far different experience than a typical engineer.

~~~
tptacek
It is not an employer's market for talent in any place that needs talent.

You're probably right that line-of-business developers at Fortune-100
insurance companies on the east coast have a harder time than SFBA devs. But
don't overgeneralize: in _software companies_ in the US, it is a seller's
market for talent.

So, two specific responses:

(1) You can in general safely push back on the first offer from any company
--- this practice is so time-honored that it gets a chapter in _What Color Is
My Parachute_, which is among the most anodyne sources of career counseling
out there. Hiring managers, even at office furniture companies in Grand Rapids
Michigan, are prepared for you to reject the first offer, and they've
deliberately calibrated their first offer to deal with that.

(2) Technology companies everywhere will in 2012 go out of their way to work
through salary negotiation. It doesn't matter if you're in SFBA, Seattle,
Austin, Chicago, or Cleveland: if they're hiring for talent (ie, if they're
actually a tech company), you're not going to spook them. Wherever they are,
they have gotten used to the idea that candidates hold the cards and are
likely at any point to decide to relo to Mountain View to work for 1.5x as
much as you can pay them.

~~~
xiaoma
I never mentioned the US. I'm in Beijing and absolutely flooded with resumes
from hard-working, talented people.

Before you automatically write off all of China (as well as India and other
nearby countries), consider that engineering is moving at a rapid pace here.
Not only are some internet companies ahead of western counterparts (e.g. free
to play gaming models), but there's simultaneously a boom in materials
engineering, medical devices and clean-tech.

I realize that the US is particularly insulated from the market realities, due
to a difficult immigration system amongst other things. I can't really comment
much on the specifics. But those sorts of distortions don't don't generalize
to the entire world, and they won't last forever.

------
heliodor
Worst. Advice. Ever!

Go read some classic negotiation texts instead. If you're in the process of
getting a job, you owe it to yourself to spend at least five hours reading
about and grokking negotiation.

Do yourself a favor and never share your salary info with someone looking to
hire you. They don't share their numbers, do they? So why put yourself at a
disadvantage?

