Talking About Money • Hacker News Board

Re: Talking About Money

#361

Post by bigtunacan » Sat, May 02, 2015, 4:16 PM UTC

eropple wrote: post #236

bigtunacan wrote: post #221

Earlier quoted context omitted.

While dealing with recruiters can be a hassle their goals align much more closely with ours if we are maintaining the fallacy that only the money counts. Recruiters are typically paid a percentage of your salary so they want you to receive the highest salary possible since that is the best payout for them as well. My experience with recruiters is they want to know how little it will take for you to accept the job, bu…

> While dealing with recruiters can be a hassle their goals align much more closely with ours if we are maintaining the fallacy that only the money counts. Recruiters are typically paid a percentage of your salary so they want you to receive the highest salary possible since that is the best payout for them as well. No, this isn't true, and this misconception is explicitly why I invoked the realtor problem. If the re…

I think we are essentially in agreement here. I said that recruiters goals more closely align than realtors, but I need to clarify. While a realtor can represent us in either the purchase or sale I'm considering representation of a purchase. Here the realtor's goal is directly at odds. I want to purchase the house as cheaply as possible, but the realtor wants the largest commission so they want the price to remain as high as possible.

The recruiter wants the largest commission possible and I want the highest salary possible. Notice I said these "more closely align". You are right, it is not a perfect alignment. The recruiter would rather get some commission rather than none. If they are afraid you may take an offer on your own or from another recruiter they may try to get you to accept a lower offer. This is why I work with recruiters I trust and I establish clear non negotiable guidelines up front. "I am looking only for promotional level opportunities. My current salary is X; do not trouble me with positions unless the salary is paying a minimum of X + (X * .3)".

With this type of relationship we must establish clear guidelines. If we fail to stick to those guidelines then it is on us.

Re: Talking About Money

#362

Post by lkiernan » Sat, May 02, 2015, 4:22 PM UTC

beachstartup wrote: post #264

Adrock wrote: post #233

Earlier quoted context omitted.

They may not be getting paid that much because they can answer your "stumpers." You might be better served by using the interview to find out why they add so much value instead of trying to prove that you're superior in some way.

uh, well, my stumpers include, "why should we pay you 200 grand?" which should naturally flow into a conversation into the amount of value this particular engineer or executive will bring to my organization. here's another one: "how will you pay for yourself in 6 months?" i'm no longer technically competent enough to stump an extremely talented engineer on a technical question. not really sure where you get the 'supe…

By providing 101k of value?

Do people know enough about what you do and how you do it to give this answer at interview stage?

Re: Talking About Money

#363

Post by fredkbloggs » Sat, May 02, 2015, 4:36 PM UTC

wonderthrowaway wrote: post #289

tptacek wrote: post #234

Earlier quoted context omitted.

Serious question: if you value equity at 0, then ( ceteris paribus ) given a choice between (1) an offer at $150,000 and 50 basis points and (2) an offer at $150,100 and 0 basis points, you should choose option (2). Given that: why should any employer offer equity?

Great question. To the parent to your post: look, when you're picking a job, you're essentially buying the stock with your time, if not with part of your comp. Unless you're a true W2 mercenary, you should accept upside at a discount like tptacek's hypothetical. So the GP got burned in 2001? That's a dumb reason to swear off all exposure to life-changing upside, forever, no matter what the expected return. Unless you…

Your choice of words is telling: "mercenary" and "shark" are overwhelmingly negative. By characterising people who disagree with your assessment of equity that way, you risk being perceived as a confidence man. Con men sell hope to the greedy at a steep markup; they are perfectly willing to use guilt if that's what it takes to reel in the mark. Anything to get someone to buy into their schemes for their own profit; in this case, by accepting worthless scrip in lieu of proper compensation. If you don't want to be perceived as unscrupulous, you should reconsider how you characterise people with different values.

I didn't get burned in 2001. I watched a bunch of people who thought they were rich suddenly realise that not only were they not rich, they were also out of a job with no prospects, through no fault of their own. I wasn't personally harmed; I rather enjoyed paying 40% less rent and spending half as much time commuting. Nevertheless, it was a magnificent learning opportunity for a young engineer, just as the bursting of this bubble will be for others. For anyone who prefers to learn the easy way, the takeaways were:

1. The market price of your equity is determined by almost every conceivable factor except the merits of your own work.

2. So few companies succeed in a way that makes your equity of life-altering market value that you should approximate the probability as zero.

3. You will not live long enough to accumulate enough wisdom to beat the market; that is, you are not better than average at identifying early-stage companies that are much more likely than average to be successful as in (2).

4. More generally, humans don't live long enough for buying variance to be a good strategy unless you are desperately poor. Otherwise, sell variance any time you can do so ev-neutrally. If you simply must buy variance, pay as little ev as possible for it. Flips and roulette are good; the lottery and buying stock on margin are bad.

"Life-changing upside" changes very few lives, even fewer deservedly so. If we lived 100,000 years, it might make sense to take a few thousand gambles on early-stage startups; the variance would mostly work itself out, and after a while you might even be able to tell who's likely to succeed so that your choice of employers would be +ev. In one 40-year career, forget it. The path to true wealth consists first of an inexpensive lifestyle and second of salary maximisation. Higher ev, lower variance.

(first paragraph edited for tone)

Re: Talking About Money

#364

Post by tptacek » Sat, May 02, 2015, 4:43 PM UTC

fredkbloggs wrote: post #363

wonderthrowaway wrote: post #289

Earlier quoted context omitted.

Great question. To the parent to your post: look, when you're picking a job, you're essentially buying the stock with your time, if not with part of your comp. Unless you're a true W2 mercenary, you should accept upside at a discount like tptacek's hypothetical. So the GP got burned in 2001? That's a dumb reason to swear off all exposure to life-changing upside, forever, no matter what the expected return. Unless you…

Your choice of words is telling: "mercenary" and "shark" are overwhelmingly negative. By characterising people who disagree with your assessment of equity that way, you risk being perceived as a confidence man. Con men sell hope to the greedy at a steep markup; they are perfectly willing to use guilt if that's what it takes to reel in the mark. Anything to get someone to buy into their schemes for their own profit; i…

There's a way to make an argument without calling your counterparty a "con man". I'm more on your side than the parent's side (though the idea of valuing equity at zero is illogical). I think your comment would be stronger without its first paragraph.

Re: Talking About Money

#365

Post by sdenton4 » Sat, May 02, 2015, 4:47 PM UTC

ransom1538 wrote: post #350

Posting your company salaries does a few things: 1) It promotes mediocrity. 2) Creates a political cesspool. 3) Ties the hands of hiring team. 1 - Excellent people want to go places where they can make more. When excellent people learn about public salary postings the first thing they will worry about is the perception of other employees. I suspect they will just avoid conflict and work somewhere else. Really think a…

1. Government and schools sit under enormous political pressure to keep salaries low, as part of a larger agenda to 'drown it in a bathtub'. This pressure keeps school salaries so low relative to the amount of responsibility and regulation that one has to be a bit crazy to choose teaching as a profession. Universities get to take their choice of the PhD students they produce; their hiring problems are more a problem of funding than worker supply. And the military I know little about.

2. Businesses need to ensure that their workers are focused on product quality over internal politics. That's a failure of culture, full stop. These internal politics, if not focused on individual salaries, can instead focus on project head count, building fiefdoms, etc. In short, if you fail to manage internal politics, you'll have these problems regardless of whether employees know what they're getting paid.

3. Yeah, capitalism's a bitch, huh? Funny how all of the 'power of free markets' rhetoric dries up as soon as it's turned back around...

Somewhat more seriously, this mainly shows that you need to peg employee salaries to a minimum of market rates, so that they aren't unhappy when that new market-rate hire comes on, and then go above this minimum based on performance. It's not that hard.

Re: Talking About Money

#366

Post by serve_yay » Sat, May 02, 2015, 4:51 PM UTC

lscore720 wrote: post #235

IkmoIkmo wrote: post #34

Earlier quoted context omitted.

Crazy. I'd definitely send a quick note to someone higher up if you can get a hold of him/her. I know, not worth the time, a hassle etc. But a typical CEO worth his salt will crush something silly like that in no-time, if you really want to hire good people this is the type of person you want to fire. I mean, hell, asking the question is one thing. I can live with that. But turning that into some kind of litmus test…

Recruiter here. Some may not like this answer, but: honesty is the best policy. Bluffing, or LYING, could backfire - especially if things escalate and they eventually learn about this. It's bullshit, especially for those who began their careers during a time of salary deflation. However, the right employer will NOT base your future salary solely on your current. It should simply be one data point in the process - you…

> Recruiter here. Some may not like this answer, but: honesty is the best policy. Bluffing, or LYING, could backfire - especially if things escalate and they eventually learn about this.

Hahahhaa, I like that you even all-capsed "lying". Give me a break.

Re: Talking About Money

#367

Post by fredkbloggs » Sat, May 02, 2015, 5:04 PM UTC

mathattack wrote: post #349

madeofpalk wrote: post #252

Earlier quoted context omitted.

I don't know about should , but an employer would offer equity because employees will often overvalue it. IMO, equity is a great benefit. You might not get the most comprehensive benefits package, or you might work more hours at early stage company. Instead, you get equity.

In addition to relative value, equity has other benefits. It increases the "One team" spirit, where everyone rises and falls together. It also puts in a sense of fairness. If the firm thrives, it's not just the CEO and VCs who get rich. There are downsides (lack of control of share price, and some freeloading) but for startups it's a great tool. The effectiveness shrinks a bit for large firms.

The effects you describe are probably specific to the individual. Having worked for several companies from tiny startups to gigantic megaliths, I can tell you that I never felt any of those things regardless of my equity package. I may be cynical, you may be naive, or both.

Companies succeed by being in the right place at the right time, being lucky, having good connections, and having leaders who make the right decisions. If any of those is missing, failure is certain. If they're all present, failure is merely likely. As a rank and file employee, you can sometimes cause a very small company to fail but you can never make any company successful. You're just there to execute; execution is at least somewhat necessary but never anywhere near sufficient.

The idea that making my economic outcome dependent on so many factors over which I have no control whatever is not merely expedient or regrettably unavoidable but explicitly fair would be silly if it were not so abhorrent.

Re: Talking About Money

#368

Post by rmc » Sat, May 02, 2015, 5:04 PM UTC

IkmoIkmo wrote: post #34

marktangotango wrote: post #9

>> Most important takeaway about salary negotiation, by the way: disclosing a previous salary is almost always against your interests because it pegs your new salary to that plus 5% rather than your value to the new firm minus a discount, which is a brutal mistake I had a phone screen with an HR drone once (Cerner Inc. to be exact \waves) part way thru she asked me my current salary. I declined to provide that inform…

Crazy. I'd definitely send a quick note to someone higher up if you can get a hold of him/her. I know, not worth the time, a hassle etc. But a typical CEO worth his salt will crush something silly like that in no-time, if you really want to hire good people this is the type of person you want to fire. I mean, hell, asking the question is one thing. I can live with that. But turning that into some kind of litmus test…

Question for you all, are there any negatives to bluffing?

In many countries the employer does the employees tax, and they will be able to see how much you earned in that calendar year. Being hired under false pretenses is fraud and means you could be legally fired at will at any later date.

People in the USA might be used to this (since this is very common), but in many places with actual employment law, this is a bad deal for the employee.

Of course, that's only if you lie to them. If you just don't tell them the salary, then they only find out after you are hired and hopefully have a nice proper salary.

Re: Talking About Money

#369

Post by rmc » Sat, May 02, 2015, 5:05 PM UTC

anigbrowl wrote: post #105

kamaal wrote: post #71

Earlier quoted context omitted.

You can get fired if they figure out you have been fudging the figures and 'lying' to them. I'm not sure how they would know, but if they do, it can create problems for you.

Error-level analysis of the Jpeg. As you say, if it comes out later that could have bad legal consequences - the term is 'detrimental reliance' and the dishonest person could conceivably face fraud charges. Even if not, it could easily become a a career-damaging topic of gossip.

Scan pay slip, edit in photoshop, print out doctored image, take photo with digitial camera. :)

Re: Talking About Money

#370

Post by rmc » Sat, May 02, 2015, 5:08 PM UTC

Nicholas_C wrote: post #37

marktangotango wrote: post #9

>> Most important takeaway about salary negotiation, by the way: disclosing a previous salary is almost always against your interests because it pegs your new salary to that plus 5% rather than your value to the new firm minus a discount, which is a brutal mistake I had a phone screen with an HR drone once (Cerner Inc. to be exact \waves) part way thru she asked me my current salary. I declined to provide that inform…

I had a similar experience with a recruiter. I asked why and she couldn't come up with a compelling answer, she just said "That's just how it is, we need your salary." She escalated it to her manager and he pulled the same. I eventually complied but not without telling them I didn't ever receive a good reason and it makes zero sense and I couldn't see how it would do anything but hurt me. Funny enough I ended up gett…

Is anyone here a recruiter and can shed some light as to why the hell these people are so adamant about getting my salary???

If the company is willing to pay €80k, and you were on €50k, then they can offer you €60k and tell you how great it is that you got a €10k raise!

It's all a way for them to pay you les.