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Common mistakes in salary negotiation

interviewing.io

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Re: Common mistakes in salary negotiation

#111
I used to work in trading and I think some of the principles I learned there apply directly to salary negotiations.

Two key things I think about all the time are price discovery and competition. Price discovery means that in some illiquid markets, you don't really know what a thing will trade at unless you try to trade it (which itself reveals some information to the counterparty but that's not important in the job case)

From that point of view, I am always surprised to hear people who hate interviewing, are reluctant to interview, etc. Interviewing is the only real way to learn "the market" - what offers to you would actually look like, and other information as well. Like if you always get offers at the low end of a range - or if you always fail interviews - is very good signal that you can act on.

Competition - when we traded bonds, we'd always go to multiple dealers for quotes. The dealers would know that we always ask at least X of their competitors by rule, so they knew that whatever number they gave us, we'd compare against others. That prompted them to strike the balance between a good deal for them and a price we'd actually accept. From that point of view, the best negotiating advice is to have multiple offers, because (1) you see what the highest one is (2) you can see how close or dispersed they are and you can infer something from that (3) they give you leverage. EG: let's say you want job X most, but job Y gave you $20K more on the offer or whatever. You can always tell job X "I'd love to work with you but it's hard to accept a lower offer, can you match?" This isn't even a game, you'd be saying this sincerely. Or, if your offers are close, you can push the highest one a bit because you know they aren't so far out of the norm with more confidence.

Re: Common mistakes in salary negotiation

#112

You can have this conversation: You: Ok recruiter, is there a budget/range set aside for this position ? Recruiter: Yes it is $x-$y You: Ok I can work with that. My expectation is ideally $x+ z% Scenario 2: Recruiter: Hey, what are your salary requirements ? You: Ok recruiter, is there a budget/range set aside for this position ? Recruiter: Or goes "No but I am interested in learning what is your requirement ideally"…

> Even if it was less than what they would have paid, why should you care if you are happy

This is a weird argument. It seems like you're saying "these scenarios are fine even if they lose you money." I would argue that "you should care" because most people would, all things being equal, like more money. The point of a job offer negotiation is to optimize a few different variables, of which "money" is generally a (or the) primary one.

If saying a number first (as you do in all 3 of these scenarios) reduces the ultimate amount of money get (it generally does), you should not do that.

Re: Common mistakes in salary negotiation

#115
post #105

You can have this conversation: You: Ok recruiter, is there a budget/range set aside for this position ? Recruiter: Yes it is $x-$y You: Ok I can work with that. My expectation is ideally $x+ z% Scenario 2: Recruiter: Hey, what are your salary requirements ? You: Ok recruiter, is there a budget/range set aside for this position ? Recruiter: Or goes "No but I am interested in learning what is your requirement ideally"…

Mine almost always goes like this: Recruiter: How much are looking for? Me: Could you please provide a range for the role? Recruiter: no, please let us know what you want Me: relatively high but not crazy number Recruiter: No, that's too high Me (in my head): why did you ask me then Me: Ok, please let me know what is reasonable Recruiter: some number that may or may not be acceptable Me: asks for a bit more if number…

IME you could have gotten the higher number if you'd avoided saying it.

Because you surrendered a number almost immediately, they have decided that you're inexperienced and so deserve less money.

I think a better strategy is to not answer: "OK, I think it's fine if you don't want to talk about salary right now. I'm sure you pay competitively. Let's focus on whether I'm a good fit with the team first."

After the engineering team has told the recruiter that they want to move forward with hiring you, you have more leverage to negotiate.

If you're finding that your opening bid is always rejected, it's probably because you don't know what's a good number to name. (Lots of people sneer at this but I don't think this is some failing on your part--companies pay tons of money for this kind of salary data which is how they know it.) In this case, you should just do anything you can to avoid naming a number first.

Re: Common mistakes in salary negotiation

#116
It's an interesting article but I hope it would not just dismiss wasting time:

> The main question recruiters ask up front about money is: “What are your compensation expectations?” They claim that it’s because they want to make sure that you’re not so far off in your expectations that interviewing with that company would be a waste of time. This is a nonsense reason — very few companies pay so much below market that it would be a nonstarter

I down want to earn "market" or "average". I want to earn what makes sense for me, regardless of how much above (or below, although that would be weird) market it may be. Or I want my conditions to be specific enough that the whole thing is worth it (benefits in terms of remote, medical, etc).

I also don't want to waste time interviewing a lot if there's no minimum bar that's close to my goal. I can always say no, and the part of aligning interviews so that you get offers at the same time makes a lot of sense, although it can be hard, since it's easy to overload yourself with interviews.

Every second wasted preparing for interviews is somewhat wasted, regardless of the experience you gain from it, so you want to minimize it. One of the biggest keys is probably leaving at your own pace so that you feel perfectly comfortable saying no. "No" gets you renegotiations pretty fast because you've made the sale. You just don't want to keep making the sale many times fruitlessly.

There's also a lot of "right time and right place" going on with interviews, so being open to change and knowing what you really want is important.

There's a point where you also know your value enough that you don't have to play so many games or stress that much. It works quite well and gives one job satisfaction.

Re: Common mistakes in salary negotiation

#117
post #105

Earlier quoted context omitted.

Mine almost always goes like this: Recruiter: How much are looking for? Me: Could you please provide a range for the role? Recruiter: no, please let us know what you want Me: relatively high but not crazy number Recruiter: No, that's too high Me (in my head): why did you ask me then Me: Ok, please let me know what is reasonable Recruiter: some number that may or may not be acceptable Me: asks for a bit more if number…

IME you could have gotten the higher number if you'd avoided saying it. Because you surrendered a number almost immediately, they have decided that you're inexperienced and so deserve less money. I think a better strategy is to not answer: "OK, I think it's fine if you don't want to talk about salary right now. I'm sure you pay competitively. Let's focus on whether I'm a good fit with the team first." After the engin…

Sorry, I guess my brief summary wasn't clear, I basically do what you say and avoid the discussion as long as possible. You are 100% correct you are in a much better position when the technical folks want you vs some random recruiter.

Re: Common mistakes in salary negotiation

#118
post #32

Earlier quoted context omitted.

Consider, thoroughly, the hypothetical lottery jackpot. What is it you would choose to do, pursue, aim for, if money were no object and you had nothing except your inner volition to drive you. Would you spend your days reading, exploring philosophy and knowledge? Or would you travel and see the world you've yet to traverse? Maybe you're an individual striving toward community and you want to focus on family, friendsh…

Did you study at the Haber Institute?

This is a very specific interrogative. What leads you to consider it as a possibility?

Re: Common mistakes in salary negotiation

#119

I work for a Fortune 100 company. Years ago they wanted to make sure that everyone in the same job was making the same amount of money (they were especially trying to make sure women were making as much as men). So they had an outside consulting group look at everyone’s salaries and adjusted them as needed to make sure they were all the same within $1. I ended up getting a $15k bump. They review it again every year t…

It sounds like a great way to miss out on talent that can command a salary higher than the average, while simultaneously attracting talent for whom this is a good deal.

Sure, it sounds that way, if we assume that negotiating skill and job performance are tightly correlated. But why should we assume that?
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