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Salary Negotiation

kalzumeus.com

311–320 of 419 posts

Re: Salary Negotiation

#311
post #300

I've heard that negotiating a higher salary at companies decreases what you can get for bonuses/profit-sharing. Is that true?

It's unlikely to be -EV for you to do so.

Technically, the higher the salary they pay you, the less profit there is to share, so absolutely, a higher salary will reduce the profit sharing. (you can immediately see how this is massively beneficial to you, of course).

Also, your future raises might (or might not) be smaller if you come in on the high end of the range. Some companies have a formulaic "X%" type of system, which means you want to start as high as possible. Others target a ratio to some fictitious "market reference" where a higher initial salary will result in lower future raises, which STILL means you want to start as high as possible.

Some company somewhere no doubt has a policy that works as you describe/fear. The overwhelming majority do not.

Re: Salary Negotiation

#312
post #252

Earlier quoted context omitted.

This is a fantastic side-effect of transparent cultures and salary structure: people like you who, for reasons good or bad, do not want to work in this kind of environment, don't apply. You may believe that sets you apart as an "A player" and means we only hire B players. I believe the concept of A players and B players is false, and have discussed this here: http://danieltenner.com/2014/09/11/there-are-no-b-players/…

> where this kind of mindset will have all sorts of side-effects that will make it difficult to work with you. I find it difficult to work with people who are compensated less than me. I want my coworkers to be better than me. I do not want to work with people assessed as "masters" making $155,000/year in San Francisco, CA. I am accustomed to working with people being paid more. Full disclosure: Over four years ago,…

Thanks for the open follow-up response. Re-reading, I realise my previous response was a bit unnecessarily snarky. Sorry for that.

> I find it difficult to work with people who are compensated less than me. I want my coworkers to be better than me.

I much prefer that attitude to the opposite :-) Though surely even better is to work with great people whom you're learning from in a variety of ways, whether or not they are paid more or less or the same. A lot of the value that someone can bring to your life is not correlated with their value to the market.

> The lack of negotiation ability makes what might otherwise be a fruitful business relationship impossible. I do not believe that transparency and negotiations are mutually exclusive.

I can't speak for Buffer, but in GrantTree it is not that you cannot negotiate, but that you cannot negotiate in secret - so it's more a discussion than a negotiation (I hope... sample size is limited at the moment!). As I mentioned in my original post, we start the ball rolling by saying where we think you fit on the pay scale and why, and if that's not where you think you should fit you are welcome to engage in a discussion to help us get it right!

> Sincere counter-question: how can you retain talent with fixed salary ceilings? Why would someone stick around when they're leaving a ton of money on the table?

> If someone is developing their skills, is extremely productive, is increasing their worth, at one of these companies they can choose to leave money on the table (altruistically donating their higher value to a for-profit company) or leave. Are they a "bad culture fit" because they wanted to make what they are worth?

There's a really good question here and I don't have a great answer to it. If you or anyone has any suggestions I'd love to hear them. To an extent, part of my answer would be: surely that's true of any small company. People might grow faster than the company. When that happens, I guess they leave and move on to something else. I guess that's ok. It's not like everyone has to keep working for GrantTree for the rest of their life! People might leave for this reason or for another reason. I hope they then look back at GrantTree as a place where they grew and learned a lot, had a great time, made some great friends and did some worthwhile work. In that time, they contributed to GrantTree's growth as well as their own, so it's not like the company is left high and dry here.

And no, I don't think that makes them a "bad culture fit" in that sort of insulting way. It might mean they are no longer a good fit for working here. That's ok. People change. Companies change. Someone that was a good fit to work in a small 3-people startup is not necessarily a good fit to work in that company 20 years later, obviously. That doesn't have to be an insult or a put-down.

Re: Salary Negotiation

#313

Earlier quoted context omitted.

Indeed. We are in a highly competitive market, and have a number of interesting projects going on to disrupt that market that won't pay off immediately. If we don't manage our costs reasonably well we won't stay in business. Money is like rocket fuel. If you're accumulating it for its own sake, rather than to get somewhere, I'd say you're doing it wrong - but that's just my opinion...

If you are not paying top of market wages, one or more of the following has to be true: 1. You don't believe top developers are intrinsically 'worth' the amount that FB/Goog/Amzn/ and many other SV companies pay, that it's not a net win for the company to have top talent. 2. You think that you don't need top developers, that really you're just going to be fine recruiting a bunch of B players, and it's some other 'thi…

Most of our hires are not developers. We're not building cutting edge tech. We have some internal tools but I don't believe they require "top developers" by whatever metrics Facebook might use. That said, I think the few developers we have are exceptionally good - versatile, multi-skilled, quick learners, broad experience, the ability to conceive, manage and run a whole software project without very little help... and whatever they decide to develop, they do develop. As a developer myself, tech cofounder of my two previous startups, I rate them as excellent developers and would be happy to work with them on any project. One of them, with no academic credentials, is the smartest person I know.

Re: your second point, I don't believe in the concept of "B players". See http://danieltenner.com/2014/09/11/there-are-no-b-players/

I am sad that you see this as insulting. I'm not justifying anything. These developers (like others in the company) have largely chosen their own salaries. One of them is in the top pay bracket in the company. They also chose my salary, btw.

Re: Salary Negotiation

#314
post #303
post #5

We're really trying to nail a good way to deal with salary negotiations when onboarding people, at GrantTree - one that gets out of this "gotcha" approach to salary. So far the best we've figured out is to be the first ones to name a number, and be super-transparent about how we arrived at that number. The reasoning is that "in a salary negotiation the first person to quote a number loses", so since we (as the employ…

The problem with this approach is that no matter how transparent you are or what numbers/ranges/data you give, the candidates on the other end will always think you're taking them for a trip. It's the same problem that car salespeople at "no-hassle" or "no-haggle" dealerships deal with. Even though they really cannot budge on their out-the-door price, you'll still have tons of people trying to eat at their already mi…

There's definitely a problem there, I agree. In practice, the people that we take to that stage of the interview process typically have quite a lot of self-awareness and also know a fair bit about our company by then, so so far it's worked out alright. But I definitely see that that could be a problem with some people. As I said elsewhere it's not something any company can just implement without thinking about it and have it just work. It takes a lot of work in many areas of the business.

Re: Salary Negotiation

#315

Earlier quoted context omitted.

Practical example: my current employer pays me the same in base salary as my previous employer paid me in base salary + duty + overtime. Oh, and they do it without ever telling me I ough to work more. For me this translates to happily walking the extra mile. It also means my wife is ok with me working a bit extra here and there because I love my job. And it means a whole less paperwork and talk about overtime or not.

I would float to you the idea that what you're reacting to is not necessarily the higher wage but the fact your new employer seems to trust you more and perhaps even care about you more.

Very possibly yes.

But it sure helps when telling my wife I should work a couple of extra hours.

Re: Salary Negotiation

#316
post #243

Earlier quoted context omitted.

I would agree with your first statement "good for learning" if learning would be about maximing each result of a learning experience. But actually learning is more efficient if you do mistakes that you can evaluate and make decisions based on them. And if you don't say a number you don't make a mistake. Therefore I would say that not saying anything may increase your knowledge of your value but it doesn't increase yo…

That makes no sense to me. What does being underpaid teach you?

Nothing. But finding out how you ended up being underpaid does. The mistake was not getting a paycheck but the bargaining for the amount. The difference between what you should get and what you get is money you pay for your education.

Re: Salary Negotiation

#317

Earlier quoted context omitted.

Want to name some numbers? Ideally with context. I'd like to know how high is high in SV. Especially for junior positions.

I'd say this thread is not a bad first approximation for what you are asking for (but note that high side has a lot of variance and is very much context, person, and importantly, timing dependent and the uniquely highs are always underrepresented in these threads, almost by definition): https://news.ycombinator.com/item?id=11314449 As a skilled junior person without having/being known for specific connections/experti…

Can you define inertia in this context? Does it mean the risk of staying stagnant in a lower paid position?

Re: Salary Negotiation

#318
post #302

Earlier quoted context omitted.

Everyone is talking about this but no one is saying it: how much are your services worth in general? Would you share? Anyone is welcome to answer, not just Tactic. I'm just curious. I'll go first. I know developers that make 70 a year and some that make 120. It does depend where you live of course, but for me personally I need 90K minimum or I won't consider any gig, anywhere. If I can't get that, I go into subsisten…

Myself I'm worth about $120k given my experience, the market I'm in and what is standard for benefits in my area. (Minneapolis/St. Paul) And I have had no issue with that. The key to me on top of that is that I am satisfied with that salary. It is not one that would make me look elsewhere with any urgency. Yes, I could try to negotiate more, but I feel no need to and believe that if I got more the company would be pa…

Just to add another datapoint, I'm also in MSP, and I'd say ~120k is where I'd value myself as well, though I ended up taking less than that for my current gig because I wanted to work with Erlang (amongst other things), and it was an opportunity to do so. I'd +1 everything you said.

Re: Salary Negotiation

#319
post #139

I've heard this "don't name a number first" advice so many times, but personally, it never seems to work. My current comp is significantly higher compared to others with my level of experience. So when I refuse to give a number, the recruiter ends up guessing a number that is significantly lower, and making a lowball offer. I've also had many other experiences where after many hours of interviews, I find out that the…

I am a recruiter and I will tell you this: you should abandon this advice, for certain. It's funny - probably the best advice anyone ever gives on negotiation is exactly the opposite of "don't name a number first." It's "anchor high." You should be anchoring to a number that is high but realistic, and negotiating from a position of strength. This is especially true for senior- and late-career individuals who have som…

I generally tell a recruiter on the first phone call to tell me the salary range. If they refuse, I tell them I'm not interested. If they name a range that's low, I tell them what I'm looking for, and see if they're able to budge. If not, I tell them I'm not interested. Sometimes the range is higher than I'd initially expected and end up pleasantly surprised.

Either way, I don't talk numbers first and I still don't waste time with places that can't offer the sort of salary I'm after. I'm not going to even bother with a phone interview if I don't have a firm number in hand.

Re: Salary Negotiation

#320

Earlier quoted context omitted.

I am a recruiter and I will tell you this: you should abandon this advice, for certain. It's funny - probably the best advice anyone ever gives on negotiation is exactly the opposite of "don't name a number first." It's "anchor high." You should be anchoring to a number that is high but realistic, and negotiating from a position of strength. This is especially true for senior- and late-career individuals who have som…

I honestly never understood the notion of not naming a number first (that is if you know what you're worth). Take the number you want to make, add 15%, and they'll likely negotiate down to the actual number you want. It's really not that hard. Take this as an example: Say you currently make $80k and you want a 10% bump. So you're looking for $88k. Take that number and add 15%. Your ask is now around $100k. They may s…

The rationale (which I don't agree with) is "what if their range is a lot higher than your guess? Then you're losing out!"
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