I've seen roughly this advice before, and while it is good advice, it's also only relevant to an insanely small subset of the population. Step 1 is basically "Be valuable and desirable to a...
I've seen roughly this advice before, and while it is good advice, it's also only relevant to an insanely small subset of the population.
Step 1 is basically "Be valuable and desirable to a company to the point they approach you, and also secure enough in your current position you can live without the offer". Now there are tons of people who don't leverage this correctly and thus are technically underpaid, but the vaaaaast majority of people do not fit this hyper specific situation.
Many companies will gladly just shred your application the moment you hiccup at all because they've got 100 more resumes sitting there to sift through and they're all as under-qualified as you are because the requirements make no sense.
To be fair to the author, he wrote this in the first 100 words:
To be fair to the author, he wrote this in the first 100 words:
I generally write as an engineer for engineers. Non-engineers can benefit from many of the same techniques, though the hiring market isn’t nearly as in your favor at the moment as it is for engineers in most major US metro areas.)
Oh sure, just making it clear since it's a zillion words, and even as an engineer you're not certain to command the respect this strategy requires. If you're at the point in your career where...
Oh sure, just making it clear since it's a zillion words, and even as an engineer you're not certain to command the respect this strategy requires. If you're at the point in your career where people are scouting you, I do really wonder how much an additional $5k a year matters given you're probably going to be WELL above the line where you're comfortable.
In a similar vein, though, it's not really about $5k deltas. If you're in the circle of people that get hired by your Googles and Ubers and whatnot, successful salary negotiations can be easily be...
In a similar vein, though, it's not really about $5k deltas. If you're in the circle of people that get hired by your Googles and Ubers and whatnot, successful salary negotiations can be easily be a $40k-100k difference in comp. Which isn't an insane amount of money, but still is noticeable.
Sure, but in the example he's giving, he's talking about $5k. 40-100k is certainly a major pile of cash that can easily change your standard of living, ESPECIALLY in the absurd cost of living...
Sure, but in the example he's giving, he's talking about $5k. 40-100k is certainly a major pile of cash that can easily change your standard of living, ESPECIALLY in the absurd cost of living area's these companies are in, but again this is already a niche article for a niche population.
Sure, but $5k is quite a lot of money in absolute terms, even with relatively high compensation. It's 6 months of groceries for a family of 4. If you had an extra $5k to invest in your 401k for...
Sure, but $5k is quite a lot of money in absolute terms, even with relatively high compensation. It's 6 months of groceries for a family of 4. If you had an extra $5k to invest in your 401k for the past 10 years, you didn't just gain $50k, you gained $102k if invested in the S&P500. If we're talking the past 20 years, that was $412k. That $5k over the course of a career could mean retiring a few years earlier. Even one extra year is a long time to be working if you don't have to be.
If you're a software engineer getting hired at all (made it through the interviews) there will be a conversation about salary, and from the point of view of a manager, hiring software engineers is...
If you're a software engineer getting hired at all (made it through the interviews) there will be a conversation about salary, and from the point of view of a manager, hiring software engineers is generally pretty difficult. Even if they're not Google, they're quite possibly competing with big tech for people.
Or at least it was like that. I don't know what the market is like now.
I read Step 1 more as "try to have a strong position going in to the negotiation" which I think is pretty sensible. If your position is strong, then you should 100% negotiate and get your company...
I read Step 1 more as "try to have a strong position going in to the negotiation" which I think is pretty sensible. If your position is strong, then you should 100% negotiate and get your company to recognise that. It's a terrible start to a commercial relationship if the company you work for doesn't respect you (i.e. compensate you properly), and probably a sign that they won't respect you when you work for them either.
Even if your position isn't super strong, by the point someone has given you a job offer they (a) want to hire you at some range of price points (and you would like to get a high value in that range) and (b) they have put in a lot of effort to get to this point (talked to people, advertised, filtered resumes, interviewed a lot of candidates, etc). If you're negotiating with a company which has an extremely standardised payroll (e.g. a factory or restaurant) you probably can't negotiate, but if not the person doing the negotiation will probably give you lots of things, if only you ask for them.
I think there's also a psychological element of successful people who manage things liking people who think like them (e.g. asking for more money) and the fact that you're negotiating makes the company (sort of irrationally) assume that because you're harder to get you're probably more valuable.
Of course you have to take into account the specific circumstances.
Since this was written in 2012, the author hadn't had a chance to read New Yorker's Lean Out: the dangers for women who negotiate By Maria Konnikova June 10, 2014.
In four studies, Bowles and collaborators from Carnegie Mellon found that people penalized women who initiated negotiations for higher compensation more than they did men.
Thank you for adding this to the discussion! It's very unfair that demographics make a difference, but unfortunately they do. In order to maximize your success, you need to understand how they...
Thank you for adding this to the discussion! It's very unfair that demographics make a difference, but unfortunately they do. In order to maximize your success, you need to understand how they weigh in and adapt accordingly.
One thing I strongly disagree with is this: The first number anchors the conversation. If you're informed (which you should be) and aggressively negotiating, you want the chance to do that. (The...
One thing I strongly disagree with is this:
Never give a number. (Bold in the original.)
The first number anchors the conversation. If you're informed (which you should be) and aggressively negotiating, you want the chance to do that.
(The following was expanded for clarity)
Let's say they're willing to pay 100 to 150. You have a rough sense of this from e.g. Glassdoor.
Scenario 1: They give a number first. They say "we're willing to offer you 100." You say "based on X I think I'm worth 150." They go "well... That's kind of a lot higher than our offer. We could go up by 10%?" You get 110.
Scenario 2: You give a number first. You say "based on X I think I'm worth 150." They say "well... that's more than we were going to offer. would you be willing to go down by 10%?" You say "sure thing." You get 135.
The only time refusing to give a number works for you is if you were about to drastically undervalue yourself. And in that scenario, they're still going to give you only as low as the bottom of the pay band. They're not going to think "hah what a sucker" and create new lower pay just for you.
You're cutting off an element there - it's about giving out an number FIRST. You can do the same thing, but simply be the second person to offer a number. If the employer makes the first offer,...
You're cutting off an element there - it's about giving out an number FIRST.
You can do the same thing, but simply be the second person to offer a number. If the employer makes the first offer, and it's lower than your expectations, you can simply make the same arguments - market research, past position, blah blah, should be at least X.
On the other hand, if they offer a number significantly higher than what you had researched, well, you take the dub and move on. Or even use that information to push more.
Another way to look at it, is that any offer the employer makes sets a floor on your compensation, since you know that they'd be OK with offering that much, and any number you say puts a ceiling on your compensation, since they know they don't need to bid higher than that. There is no advantage to giving out more information earlier.
The crux of my argument is that "[t]he first number anchors the conversation," so from that standpoint my whole argument is that you should give a number first (or FIRST). I think you may've...
The crux of my argument is that "[t]he first number anchors the conversation," so from that standpoint my whole argument is that you should give a number first (or FIRST). I think you may've missed that in my original comment.
The concept of anchoring is fairly well established in the behavioral psychology literature, which a lot of professional negotiating theorists draw on heavily.
n.b. Some of the behavioral psych stuff has been called into question or been extrapolated overmuch, but anchoring numbers during a negotiation is a pretty pure application of the what the researchers were originally testing.
Another way to look at it, is that ... any number you say puts a ceiling on your compensation, since they know they don't need to bid higher [...]
This is a reasonable counterargument. I would respond by saying this is what happens if you've done it poorly; your ask should ideally be just above their salary band.
In real life scenarios are more complicated; if you really have no idea what they might be willing to pay you then I agree that you should let them give a number and then work off of that. But the categorical advice of "never say a number" is - if I can be provocative for a moment - advice for people who are trying to not lose a negotiation, instead of for people who are trying to win one.
If you're the second person to say a number, you're working off of their reference point. If you're the first person to say a number, they're working off of yours. You want that reference point to be the biggest number possible, and it's more likely to be big if you're the one who said it.
I don't think anchoring really makes that big of a difference in this case. The hiring manager knows what kind of budget they have, and they well know what the market rate is for the role. The...
I don't think anchoring really makes that big of a difference in this case. The hiring manager knows what kind of budget they have, and they well know what the market rate is for the role. The information asymmetry favors the company. I really doubt there's many instances where, say, a hiring manager is hiring for a senior dev role, and thinks 200k is enough, but then you pull out the 500k ask and they're so blown away they'll move up to 400k or something.
Maybe for like a very small company, or contractor/freelancer work for a small company, where the person hiring just has no idea how much they should be paying. That's the only case where I could see it's necessary to try and "anchor" the offer with a high initial ask.
Otherwise, the hiring manager knows what's up, regardless of what they try to present, and your experience and performance in the interviews is enough to anchor the offer in the right place. If they still lowball you, then they were always going to lowball you - you're not going to shock and awe them with a number.
There's been some fairly convincing research suggesting that anchoring works even when you explicitly know that someone is trying to set an anchor, which is pretty interesting. To be clear,...
There's been some fairly convincing research suggesting that anchoring works even when you explicitly know that someone is trying to set an anchor, which is pretty interesting.
To be clear, anchoring is not going to magically get you out of the salary band that they're willing to offer. What it can do is move you towards the top.
you're not going to shock and awe them with a number
I think I've explained things poorly if this is what I conveyed. Anchoring the conversation by being the first to say a number is not about shock and awe, nor will it dramatically change the terms on the table. Negotiations are usually based on a reference point. Being the one to set the reference point means that you can affect, in a small but significant way, how high it is.
If the potential salary band is 100-150, asking for 150 instead of being offered 100 makes it more likely that the final agreed-upon number will be high.
I think where people go wrong here is that they are so worked up at the idea of throwing out a number that when they finally do give one it is wildly high or low. If you research the market and...
I think where people go wrong here is that they are so worked up at the idea of throwing out a number that when they finally do give one it is wildly high or low. If you research the market and are honest about what you can expect to be paid, suggesting on the high end of that don't ruffle any reasonable employers. There out an insane number though and it might.
For my current job I never gave a specific number, I said something like “Well the last startup I worked at paid $X and I’ve gained experience since then and there’s been some inflation, so we’d...
For my current job I never gave a specific number, I said something like “Well the last startup I worked at paid $X and I’ve gained experience since then and there’s been some inflation, so we’d need to go higher than that”. Just setting a floor.
That technique is sometimes the right call. That's especially true if you have very little info about what they might be willing to pay; if you need the job more badly than they need you; if...
That technique is sometimes the right call. That's especially true if you have very little info about what they might be willing to pay; if you need the job more badly than they need you; if you're in a minority group (especially a woman or black) at higher risk of being perceived as "aggressive" for negotiating hard; or a few other scenarios.
It's not the ideal path if you want the number to be as big as possible, though. As you pointed out, you're setting a floor. This is good: they'll offer you that floor plus x% - but also bad: they're working off of your floor.
I've seen roughly this advice before, and while it is good advice, it's also only relevant to an insanely small subset of the population.
Step 1 is basically "Be valuable and desirable to a company to the point they approach you, and also secure enough in your current position you can live without the offer". Now there are tons of people who don't leverage this correctly and thus are technically underpaid, but the vaaaaast majority of people do not fit this hyper specific situation.
Many companies will gladly just shred your application the moment you hiccup at all because they've got 100 more resumes sitting there to sift through and they're all as under-qualified as you are because the requirements make no sense.
To be fair to the author, he wrote this in the first 100 words:
Oh sure, just making it clear since it's a zillion words, and even as an engineer you're not certain to command the respect this strategy requires. If you're at the point in your career where people are scouting you, I do really wonder how much an additional $5k a year matters given you're probably going to be WELL above the line where you're comfortable.
In a similar vein, though, it's not really about $5k deltas. If you're in the circle of people that get hired by your Googles and Ubers and whatnot, successful salary negotiations can be easily be a $40k-100k difference in comp. Which isn't an insane amount of money, but still is noticeable.
Sure, but in the example he's giving, he's talking about $5k. 40-100k is certainly a major pile of cash that can easily change your standard of living, ESPECIALLY in the absurd cost of living area's these companies are in, but again this is already a niche article for a niche population.
Sure, but $5k is quite a lot of money in absolute terms, even with relatively high compensation. It's 6 months of groceries for a family of 4. If you had an extra $5k to invest in your 401k for the past 10 years, you didn't just gain $50k, you gained $102k if invested in the S&P500. If we're talking the past 20 years, that was $412k. That $5k over the course of a career could mean retiring a few years earlier. Even one extra year is a long time to be working if you don't have to be.
If you're a software engineer getting hired at all (made it through the interviews) there will be a conversation about salary, and from the point of view of a manager, hiring software engineers is generally pretty difficult. Even if they're not Google, they're quite possibly competing with big tech for people.
Or at least it was like that. I don't know what the market is like now.
I read Step 1 more as "try to have a strong position going in to the negotiation" which I think is pretty sensible. If your position is strong, then you should 100% negotiate and get your company to recognise that. It's a terrible start to a commercial relationship if the company you work for doesn't respect you (i.e. compensate you properly), and probably a sign that they won't respect you when you work for them either.
Even if your position isn't super strong, by the point someone has given you a job offer they (a) want to hire you at some range of price points (and you would like to get a high value in that range) and (b) they have put in a lot of effort to get to this point (talked to people, advertised, filtered resumes, interviewed a lot of candidates, etc). If you're negotiating with a company which has an extremely standardised payroll (e.g. a factory or restaurant) you probably can't negotiate, but if not the person doing the negotiation will probably give you lots of things, if only you ask for them.
I think there's also a psychological element of successful people who manage things liking people who think like them (e.g. asking for more money) and the fact that you're negotiating makes the company (sort of irrationally) assume that because you're harder to get you're probably more valuable.
Of course you have to take into account the specific circumstances.
Since this was written in 2012, the author hadn't had a chance to read New Yorker's Lean Out: the dangers for women who negotiate By Maria Konnikova June 10, 2014.
Thank you for adding this to the discussion! It's very unfair that demographics make a difference, but unfortunately they do. In order to maximize your success, you need to understand how they weigh in and adapt accordingly.
One thing I strongly disagree with is this:
The first number anchors the conversation. If you're informed (which you should be) and aggressively negotiating, you want the chance to do that.
(The following was expanded for clarity)
Let's say they're willing to pay 100 to 150. You have a rough sense of this from e.g. Glassdoor.
Scenario 1: They give a number first. They say "we're willing to offer you 100." You say "based on X I think I'm worth 150." They go "well... That's kind of a lot higher than our offer. We could go up by 10%?" You get 110.
Scenario 2: You give a number first. You say "based on X I think I'm worth 150." They say "well... that's more than we were going to offer. would you be willing to go down by 10%?" You say "sure thing." You get 135.
The only time refusing to give a number works for you is if you were about to drastically undervalue yourself. And in that scenario, they're still going to give you only as low as the bottom of the pay band. They're not going to think "hah what a sucker" and create new lower pay just for you.
You're cutting off an element there - it's about giving out an number FIRST.
You can do the same thing, but simply be the second person to offer a number. If the employer makes the first offer, and it's lower than your expectations, you can simply make the same arguments - market research, past position, blah blah, should be at least X.
On the other hand, if they offer a number significantly higher than what you had researched, well, you take the dub and move on. Or even use that information to push more.
Another way to look at it, is that any offer the employer makes sets a floor on your compensation, since you know that they'd be OK with offering that much, and any number you say puts a ceiling on your compensation, since they know they don't need to bid higher than that. There is no advantage to giving out more information earlier.
The crux of my argument is that "[t]he first number anchors the conversation," so from that standpoint my whole argument is that you should give a number first (or FIRST). I think you may've missed that in my original comment.
The concept of anchoring is fairly well established in the behavioral psychology literature, which a lot of professional negotiating theorists draw on heavily.
n.b. Some of the behavioral psych stuff has been called into question or been extrapolated overmuch, but anchoring numbers during a negotiation is a pretty pure application of the what the researchers were originally testing.
This is a reasonable counterargument. I would respond by saying this is what happens if you've done it poorly; your ask should ideally be just above their salary band.
In real life scenarios are more complicated; if you really have no idea what they might be willing to pay you then I agree that you should let them give a number and then work off of that. But the categorical advice of "never say a number" is - if I can be provocative for a moment - advice for people who are trying to not lose a negotiation, instead of for people who are trying to win one.
If you're the second person to say a number, you're working off of their reference point. If you're the first person to say a number, they're working off of yours. You want that reference point to be the biggest number possible, and it's more likely to be big if you're the one who said it.
I don't think anchoring really makes that big of a difference in this case. The hiring manager knows what kind of budget they have, and they well know what the market rate is for the role. The information asymmetry favors the company. I really doubt there's many instances where, say, a hiring manager is hiring for a senior dev role, and thinks 200k is enough, but then you pull out the 500k ask and they're so blown away they'll move up to 400k or something.
Maybe for like a very small company, or contractor/freelancer work for a small company, where the person hiring just has no idea how much they should be paying. That's the only case where I could see it's necessary to try and "anchor" the offer with a high initial ask.
Otherwise, the hiring manager knows what's up, regardless of what they try to present, and your experience and performance in the interviews is enough to anchor the offer in the right place. If they still lowball you, then they were always going to lowball you - you're not going to shock and awe them with a number.
There's been some fairly convincing research suggesting that anchoring works even when you explicitly know that someone is trying to set an anchor, which is pretty interesting.
To be clear, anchoring is not going to magically get you out of the salary band that they're willing to offer. What it can do is move you towards the top.
I think I've explained things poorly if this is what I conveyed. Anchoring the conversation by being the first to say a number is not about shock and awe, nor will it dramatically change the terms on the table. Negotiations are usually based on a reference point. Being the one to set the reference point means that you can affect, in a small but significant way, how high it is.
If the potential salary band is 100-150, asking for 150 instead of being offered 100 makes it more likely that the final agreed-upon number will be high.
I think where people go wrong here is that they are so worked up at the idea of throwing out a number that when they finally do give one it is wildly high or low. If you research the market and are honest about what you can expect to be paid, suggesting on the high end of that don't ruffle any reasonable employers. There out an insane number though and it might.
For my current job I never gave a specific number, I said something like “Well the last startup I worked at paid $X and I’ve gained experience since then and there’s been some inflation, so we’d need to go higher than that”. Just setting a floor.
That technique is sometimes the right call. That's especially true if you have very little info about what they might be willing to pay; if you need the job more badly than they need you; if you're in a minority group (especially a woman or black) at higher risk of being perceived as "aggressive" for negotiating hard; or a few other scenarios.
It's not the ideal path if you want the number to be as big as possible, though. As you pointed out, you're setting a floor. This is good: they'll offer you that floor plus x% - but also bad: they're working off of your floor.
Yeah it's better than nothing. But I ended up getting a very generous package. Not too exciting on the salary front but way over market on equity.
Awesome! I'm glad it worked out well.