Salary Negotiation: Make More Money, Be More Valued (2012)

Exactly, but the budget isn't infinite.

Assuming equal talent, I'd much rather hire 5 people at market rate rather than 4 people at 25% over market rate. The net cost is roughly the same, but we can get much more accomplished with 1 more person on the team. Even better, on-call demands are spread out over more people and vacations are easier to schedule.

In my experience, compensation requests are only loosely coupled to a person's abilities. Usually, the person's prior salary history is the driving factor, even when they don't reveal it (I don't ask). If you have a large enough candidate pool, it can often make sense to let the most aggressive negotiators go to the FAANG companies rather than jumping through hoops to overpay them relative to the rest of the team. The most aggressive salary seekers usually end up leaving for FAANG anyway, because they want the resume prestige as leverage in future salary negotiations.

Finally, handing out above market salaries isn’t without consequence for managers. When C-level execs look at compensation across the company and see a handful of managers with significantly higher compensation, they’re going to have higher expectations for that team. If a manager is constantly paying above-market rates but producing average or below average work, it’s going to draw attention. If I’m going out on a limb to give people above market compensation, the expectations are that much higher. I’m also going to be that much quicker to let highly compensated people go if they can’t live up to their compensation requests.

  > Virtually any amount of money available to you personally is
  > mouse droppings to your prospective employer.
  > They will not feel offended if you ask for it.

(a) I interviewed with Wealthfront last year. They offered $160K, which was lower cash comp than any of my other offers. I tried to open the door to negotiation. The recruiter and the dev lead then got on the phone with me to awkwardly explain that no, they don't negotiate with candidates, and what makes me feel like their offer is inadequate? Would I really want to miss the opportunity to work for an exciting company over some marginal sum of money? Yes.

(b) The money you ask for is a pittance on the company's balance sheet, but you're not negotiating with the company. You're negotiating with someone in recruiting. From hanging out with HR, they talk a lot of shit about candidates who they consider difficult, and have a lot of ways of making the experience less pleasant for the candidate, even if it's not clear what this means for the company's ability to attract talent.

That's a somewhat defeatist perspective. Don't think of yourself as "I ONLY do x,y,z", but rather as "of course I do x,y,z but more importantly a, b, and c too! (where a, b, and c are things that are very valuable to company).