As stated in the article, it's best to ask them for their budget. If I have any interest at all I clearly state these two things on first contact with a recruiter:
1. I don't discuss my current or past compensation.
2. Before I engage at all, I need to know what the baseline salary and compensation package is for the role in question.
If they're coming to you, you have 100% of the negotiation leverage.
Recruiters are often paid x% of one year's base salary. In this case, your interests are aligned with the interest of the recruiter.
In my experience, recruiters are 'box checkers'. They have little to no knowledge of your skill set or the skills required for the job outside of buzz words that can be printed on a resume. The reason recruiters ask for your salary is not to engage in price fixing but to ensure that they pursue a placement where 1) the candidate is getting a pay bump and 2) the candidate is priced competitively.
> Recruiters are often paid x% of one year's base salary. In this case, your interests are aligned with the interest of the recruiter.
Not entirely. It may be in your best interest to walk away from a position that is not offering as much as you want. On the other hand, the recruiter gets 0 if you walk away or are passed over because someone else asked for less. So it is in the recruiters best interests to get you placed somewhere, even if somewhere is a little lower yearly salary because they undercut competition.
> The reason recruiters ask for your salary is not to engage in price fixing but to ensure that they pursue a placement where 1) the candidate is getting a pay bump and 2) the candidate is priced competitively.
No, it's so you don't look like your biting off more than you can chew, which looks bad on them. If you move from somewhere with a low pay rate to somewhere higher and you try to get that big pay bump, they're going to tell you that you can't because you don't look like you're worth it based on your previous low pay.
> It may be in your best interest to walk away from a position that is not offering as much as you want.
YES YES YES YES YES. This is far more important than any salary disclosure. The recruiter is asking so they don't waste any one's time on a deal that will fail because of price.
> On the other hand, the recruiter gets 0 if you walk away or are passed over because someone else asked for less. So it is in the recruiters best interests to get you placed somewhere, even if somewhere is a little lower yearly salary because they undercut competition.
The problem is that you're willing to sign for a lower salary. Disclosure has no impact on you accepting or not accepting the offer, it just helps ensure the offer will be accepted when/if presented.
> No, it's so you don't look like your biting off more than you can chew, which looks bad on them.
Seriously, if your recruiter is telling the hiring company information that makes themselves look bad...they most likely are not going to close the deal. If your current would be seen as 'too low' to the client, then they won't disclose your current salary.
> If you move from somewhere with a low pay rate to somewhere higher and you try to get that big pay bump, they're going to tell you that you can't because you don't look like you're worth it based on your previous low pay.
If your recruiter tells you that, then drop them. Great recruiters know that the value of the candidate is driven by the current market, not the candidate's current pay.
My recruiter for my current position didn't ask me about my previous salary information and instead asked me what I wanted to make.
I ended up getting a 1.75x pay bump. I know what I am worth, and I was getting underpaid at my previous job (but at the time when I got that job, the market wasn't as hot).
The problem with positions that pay a commission of sale price or new job offer is that they are great at convincing you that everyone is on your side when they likely are not.
For example lets assume a recruiter can only find job offers for 1 candidate at a time, and it takes on average:
- 1 week of work to find a 10% better offer
- 2 week of work to find a 40%+ better offer
It would seem like that 40% better offer is definitely worth the work, but for the recruiter it may not be.
If engineers makes say $150k, and the recruiter gets 10% of their new salary, they would make $16.5k from 1 week of work, or $21k from 2 weeks of work. If they can turn 1 candidate per week at $16.5k they will end up making more than if they spent 2 weeks per candidate, so they have little to no incentive to actually get you a better offer if it takes more work.
Not to mention recruiters are more likely to work with companies multiple times per year and an individual maybe once per year, so it is likely in their best interest to help each company get the best price on a candidate rather than help the candidate get the best offer possible.
Maybe the better response is "I tell you mine if you tell me yours"? If you know how much the recruiter is taking home, you can get a sense of their incentives.
It's also important to weigh these costs at the margin. If they have a candidate who will sign faster and for less money, the recruiter isn't going to advocate for you.
While recruiters do often work with a small set of companies, the challenge of the job is supply, not demand. They are paid to find employees, not to find employers. Even if they're working with a single client, in a hot market this will have next to no impact on salary pricing.
The difference between you making 130k and 150k may only be 2k difference for the recruiter, which in the interest of getting the job filled is very small. However to YOU, the difference is 20k which can be life altering.
The recruiters's interests and your interests are not as aligned as you may think. Freakonomics covered this with Real Estate agents trying to sell your house.
This is the distinction between third-party recruiters and first-party recruiters. When I was hired via a third-party recruiting company, all negotiations happened via the recruiting company on behalf of myself. This was successfully because, as you mentioned, our interests were aligned, and as a result, I went from a 60k a year role to a 120k a year role. On the other hand, when I moved on from the 120k a year role, I dealt with first-party recruiters, where their interests were aligned with the hiring company, which means attempt to bring me on as cheap as possible. In the later case, it is clearly not in your best interest to disclose salary.
It should be like this but I doubt that that's exactly how it works in real life.
Say that a recruiter gets a 10% of your salary, and you get an offer for $90.000, so they get $9.000 for their work.
Your value could be higher, let's say $120.000, so the recruiter can make $3.000 more. But the situation from the recruiter POV is:
a) Make $9.000 now and work on another hire
b) Waste time negotiating and possibly lose the $9.000 just to make $3.000 more
Actually not. 50-50 chances of getting 10% of $70,000 is 50% chance of getting $7,000
20-80 chances of $80,000 is 20% chance of getting $8,000
it's actually in the recruiter's interest to force you into accepting a low offer right away rather than possibly getting another offer by your current employer or another offer through an acquaintance
But of that lower number makes you walk, then the deal is off. Having a minimum salary is far more effective in negotiation than any disclosure of pay.
That's why they tell you things like "if they extend you an offer be prepared to accept it" and if you tell them your salary they'll pressure you into accepting an offer you would normally refuse.
The problem here isn't that you disclosed your current salary, it's that your 'must have' salary is too low. Tell your recruiter "I need $x minimum", and they will get you $x or not work with you.
Ignoring the recruiter problem for a second, should I ever feel obligated to disclose salary information? I have had potential employers straight up ask me what my current salary is, should I just tell them I'm not going to answer that question?
- "I don't feel comfortable sharing that"
- "I'm still looking at a couple different options and don't want to pigeon hole myself"
- "What salary is being offered with this position?"
If they take issue with your non-response, its a (small) sign that you might headed towards a non-ideal working environment.
You should never feel obligated about anything when negotiating (afterwards, yes, keep your agreement it will help your in the long run and is the right thing). Your goal is to get the best possible deal for yourself.
Internally, sharing your salary with co-workers is federally protected speech. You could argue to a recruiter that your salary exposed publicly is sharing trade secrets.
You're right. Doesn't mean there is a general stigma against doing so, is generally frowned upon, and can put you into a position to be fired because of "something completely unrelated but yes, totally related"
It's also moral and ethical. It's the cornerstone of collective action. It is information that can NEVER hurt either you or your coworker, because someone is going to have to justify a salary in one direction or another as a result. Never, ever hesitate to share your salary information with anyone who wants to know.
Ashamed that it's too high? Work to get your coworkers raises. Ashamed that it's too low? Time to open negotiations, either with your current employer or another one.
This is useful advice. I'm in Canada and thinking (and trying!) about moving to states in very near future. honestly it's been challenging dealing with this.
Here are few conversations (from what I remember):
Amazon Recruiter: So how much are you making right now?
Me: I'm in Canada and I'm interviewing for a position in NYC, how's that relevant. In my Province, we've a central database with salary stats. If you've something similar, I can use that to come up with a number backed by data.
Amazon Recruiter: I'll get back with that info (he never did!)
Generic Recruiter: How much in CAD dollars you make right now?
(Me thinking: Do you've any idea about conversion rate? If so, you'd not be asking this)
Me: Sorry I can't provide that information.
Recruiter: Just so you know when you work with US recruiters, this is a standard requirement that you must provide your current salary for us to be able to proceed.
Me: Thanks, I think I'll have to find someone else (and we ended there).
Based on news articles it seems it is difficult for tech companies to find good people but it is equally difficult for individuals to weed out these recruiters trickery from my experience.
Glad to see that asking for salary is not 'standard' requirement!
The recruiter I went through this time around when I got hired didn't ask me about my previous salary at all. Instead he asked what I was looking for, and ended up giving me a higher number (hourly rate) than what I had asked for.
This is definitely a hard lesson to learn for many. Recruiters often cite that it's a routine question. But just because it is, doesn't mean you should answer it.
I've seen some recruiters straight up refuse to work with me when I wouldn't disclose my current salary. Very glad they did.
Ask yourself how much of a salary increase would I like to see, then add that to your current salary and say that sum when asked. The recruiter knows you are not going to take a salary that is below what you currently make, so they will have to offer you a good salary or give the job to somebody else.
Also go read "A Strategy of Conflict", which will enable you to understand and analyze all sorts of negotiations.
Seriously, read this post, listen to this post. I am a terrible negotiator (as in I have taken pay cuts because jobs seemed interesting and paid sticker price for cars) and hate it like 95% of the rest of software engineers but it's how the game is played and we're both ourselves individually and ourselves as a group a disservice by not protecting this information.
Why do you say 95% of software engineers hate price negotiations? This would imply 95% of software engineers are unaware of their fair market price and thus feel ill prepared for the most critical negotiations process of their foreseeable future (even if that future extends only a few months or years). It's only a job - you offer time and professional experience for a set price and the prospective employer evaluates the value proposition.
Society at large does not work as a huge family - this does not mean that it's a dog eat dog world but it's good to have some negotioations theory under ones belt as one becomes a seasoned professional.
If you do that, you're only going to get an offer slightly above what you currently make. Even if you're way above market, it's worth having them make the first offer. You can potentially negotiate it well above your current compensation from there.
If cash is your only metric, I agree. When I'm negotiating for equity at a startup, what the "big boys" paid is a good metric for my expectations on equity+cash comp -- I understand you can't give me "big boy" cash, but "funny money" is very near free - so let's talk percentages...
This is a tough one, because you don't want to waste your time on jobs that wont pay you what you're worth, so stating that you make X and need X + .2X is a good way of weeding out the crap. The author does sort of advise this with the notion of giving a salary requirement, but I've had friends who've used this term and companies have ignored it, thinking they are bluffing. Also, I do see how you could short change yourself if their actual budget was higher when you state your salary or salary requirement. I've found the best thing to do is to apply to multiple places and see what kind of offers you get (and then to pit those offers against each other).
The ideal is not to say nothing, but to know what you're worth and state that politely.
Most candidates who say nothing are either underpaid or overpaid and are trying to dance around that, instead of simply reframing the conversation to be about your market value.
Sure, don't tell them what you're earning. Tell them what it would take to get you to leave... plus 15% for the inevitable downward negotiation with the manager. If your current employer is unwilling to pay you what you think you're worth, you have an obligation to yourself to go into the market and find compensation that matches your expectations. With few exceptions, compensation discussions with your current employer should be mutually exclusive from compensation discussions with other firms. Businessmen don't want to get into bidding wars when they can avoid it.
The frustrating thing about this is that the entire concept of salary negotiations is one of the prime causes of unequal pay between genders.
The entire culture of a company trying to offer you less than you're worth so that they can save a few pennies is disgusting.
There shouldn't be salary negotiations - people who do the same job should be paid the same salary. If you want to negotiate for extra vacation days or a signing bonus or whatever, fine, but not salary. Just pay people a fair salary and pay them the same.
The current salary negotiation setup is extremely detrimental to people and should be eliminated, not encouraged.
Is there a crowdsourced list of startups that use shady recruiting practices somewhere? Not too long ago I was approached by a recruiter for a Unicorn company that repeatedly refused to move forward in the process before I disclosed my "accepted salary range" (asking for their budget, as people have suggested, gave me no response either). This was before I had even met a single person employed at the company. Normally I would have gone around the person in question, but this experience left a really bad impression of the company to me.
It depends. If this a decent headhunter, and not just some chump recruiter trying to find lukewarm bodies, then they are trying to answer the question:
"What will it take for you to switch jobs?"
No problem with telling them your current salary- their goal is to offer you something better, and you can straight up say I'd need 30% more to switch. Remember, they get paid a % of your salary to get you!
Eh, obviously. Now imagine my surprise when I came to Hong Kong and started to see candidates' current salary on their CVs without even being asked for it.
Not to mention that many companies do 'require' it. Next time I should claim it's confidential. Just to see how they react to a novel situation.
I've done this. It makes recruiters very, very uncomfortable. It lets you retain all your bargaining power. It's also very, very hard to stick to, since there's often an employment offer on the line.
Never never. The market is competitive. Just tell them "I'd be interested to hear how your company/client values my experience" or "I'm open to competitive offers". I've received crazy good job offers by simply never revealing salary.
Disclosing your salary to fellow employees helps them by increasing their ability to bargain effectively with their employer. (and disclosing salaries to each other helps both of you)
Similarly, disclosing your salary to a potential employer helps them by increasing their ability to bargain effectively with you.
Disclosing to everyone would do away with the issues raised by the article. If everyone knew everyone's salary, there would be no underwater price-fixing scheme, and disclosing to recruiters would do no harm to you and your colleagues' negotiating positions.
That's a rather poor interpretation of the study. The study profiles salary among different income groups, not the difference between $110k/year and $120k/year.
I read the paper but grant my ability to understand it is limited. My interpretation is built on what's discussed at the end of Kahneman's Ted presentation: https://youtu.be/XgRlrBl-7Yg?t=1015
Is that why the downvote? I linked the paper people can make their own interpretation... that's at least as praise worthy as "common sense".
