Salary negotiations for techies (2011)

http://jacquesmattheij.com/Salary+negotiations+for+techies#

by pmoriarty • 12 years ago

299 226 12 years ago

Bahamut2• 12 years ago

There is one danger to taking stock that should be made more explicit - you weaken your future negotiation power with the company, since payment by stock already ties your hands some, especially if you haven't gotten past the 1 year cliff.

godzillabrennus• 12 years ago

Depends on how you take stock. If your on a vesting schedule that hasn't vested then you need to wait for your cliffs like mentioned. If you agree to purchase the stocks using warrants then you are in a better position.

RickS• 12 years ago

Do you have any favorite links/resources re: warrants?

frodopwns• 12 years ago

Here is another similar guide. Easier said than done of course. http://www.kalzumeus.com/2012/01/23/salary-negotiation/

bgentry• 12 years ago

I was coming here to post that same link. It's much longer, but contains many more specific situational examples, and more comprehensive advice.

clay_to_n• 12 years ago

Thanks for posting this, it's in the same vein as the original link but far more thorough.

jacquesm2• 12 years ago

Patrick has done a much better job at this than me and I wholly second this, please read his guide first, then skim mine to see if there is anything useful in it. When I wrote mine Patrick's did not exist yet, if it had then I would have happily skipped writing it.

eoghan2• 12 years ago

"If they can’t pay you what you’re worth, consider being paid in part in stock, but only if you truly believe in the product, the management, and the company as a whole."

Successful "techies" never work at companies they don't believe in.

It's quite telling that the author includes this "only if" clause.

Swizec4• 12 years ago

Successful "techies" never work at companies they don't believe in.

1) This is from 2011, it was slightly less of a seller's market for engineers back then. It was still a seller's market, but not as crazy as it is now.

2) The author is one of the top 10 all time contributors to HN. #3 in fact. And I don't think he deserves the snark from the last line of your comment. He's done some pretty cool things and I'd definitely count him as a successful techie.

That said your lackadaisical use of infinity is worrying. You shouldn't just throw it around like that. Most things have nuances. Life in particular.

eoghan2• 12 years ago

I'm sure he's a very prolific Hacker News contributor. My point is that people who optimize for short-term financial compensation ahead of employment with a company they believe in which is generous with its stock are the least successful in this industry—particularly financially, ironically.

minimaxir2• 12 years ago

Successful "techies" never work at companies they don't believe in.

This is an odd application of No True Scotsman: http://en.wikipedia.org/wiki/No_true_Scotsman

There are many nonobvious reasons for choosing to work at a certain company, even if you don't believe in the company (e.g. salary to support a family as the highest priority)

atom-morgan• 12 years ago

This post is a condensed version of an already short book I recently read - Breaking the Time Barrier [1]. I recommend reading both.

Like the author of this post says, calculating the value you're adding with your work is the only true way to accurately price yourself. It may not be as easy to do as someone who works in sales but it's worth your time to do so.

Shortly after reading BtTB, I had a new contract opportunity come my way. I doubled my hourly rate.

[1] https://www.freshbooks.com/breaking-the-time-barrier

gaius9• 12 years ago

Free food is such a no-brainer, if you're a manager. For £5 of pizza you can get £50-100 of work, easy, and the workers think they're getting the better deal...

Swizec4• 12 years ago

This is why I like to say "Just pay me more, I can take care of my own perks. Promise."

Sure, free food is great and all. But we're not kindergarteners are we? I'm an adult and I like to take care of my own food (and such).

Free beer and pizza is for helping your friend move. Or for giving a talk at a *camp event. It's not for producing hundreds of thousands if not millions in value for your employer.

cornellwright3• 12 years ago

As an employer that provides free food, I think there's more to it than that in that both sides receive more value. We don't provide free food in order to pay our employees less. We provide free food because we see a lot of value in everyone eating together and employees get a lot of value in just not having to think about lunch or spend the time to go out and eat somewhere.

I think most people get more value you out of the free food than if they were simply paid what it cost to provide. In the case of free food I see it as where both employer and employee do better with the in-kind perk than the equivalent cash alternative.

kelseyfrancis• 12 years ago

I once had a major tech company tell me during negotiations that "you can't really put a price on free meals", which I thought was a truly absurd thing to say.

jacalata2• 12 years ago

"That's valid, and that's why I'm going to consider them as $0 when calculating my total compensation".

patio11• 12 years ago

I have heard this line enough with regards to Google that I believe it is Standard Operating Procedure. Your counterparty knows they are in a negotiation. They have been in thousands of negotiations. They have a written list of words to say because they win negotiations.

You can adapt to this environment, for example by coming in with prepared messaging of your own, and not meekly acquiescing to their first offer when their second offer is their first offer plus the food they were going to give you anyhow. (News you can use guys: this is also Standard Operating Procedure.)

benihana2• 12 years ago

I feel like this is something that only inexperienced people fall for though. It's nice to get food, but perks like agency, autonomy, and trust are so much more important than free soda and pizza. Especially when I can get paid more and buy the kind of snacks I like.

wyclif4• 12 years ago

Agency, trust, and autonomy are great, but they're no replacement for rock solid health, vision, and dental benefits, plus a matching 401k. Now that's sexy.

Disclaimer: I'm married and a father.

gaius9• 12 years ago

It is a bit more complex than that, a generation of geeks have been socialised to believe that eating free pizza at work is "living the dream". Even guys who are well experienced in the industry can fall for it. There are a whole bunch of tricks a savvy employer can use that cost next to nothing compared to the overtime the workers do in return for it.

orblivion• 12 years ago

You may be right that it's not a win for the developer. But when talking about perks like this one, I don't understand why people approach analysis as if it's an adversarial relationship. A good deal for the company may also be a good deal for the developer. Why should I only accept a perk if I think I'm screwing over the company? However much they benefit from it, outside of assessing my negotiating position, is none of my business. To put another way, why would I expect to be offered a perk if it didn't benefit the company as well?

gaius9• 12 years ago

It becomes adversarial when its used as a substitute. E.g. companies who push the line that lower than market wages are compensated for by pizza, table football, beanbags, stock options...

clairity• 12 years ago

this post can be summarized by two concepts that are typically taught in business schools:

1) do value based pricing not cost-plus for your labor (ask for what the market will bear, not your cost of living plus some small 'profit' on top of that)

2) have a batna (https://en.m.wikipedia.org/wiki/Best_alternative_to_a_negoti...), i.e., another offer so you have leverage in the negotiation

i've ignored these tenets exactly once, and that remains an unpleasant memory for me. every other time, it's resulted in increases of 10-40% in comp & benefits. of course, you should balance comp with qualitative advantages, but the point is not to just let yourself get screwed. =)

stygiansonic2• 12 years ago

Getting around "cost plus" thinking is definitely a major point. I think developers, as a group, are generally concerned with the concept of fairness and "cost plus" thinking is a huge part of that. Take, for example, the top comment in this thread[0], which posits the solution to airlines' problem with SkipLagged as pricing a "ticket based on what it costs and a fair margin".

Things rarely work like that in the real world. This is not to knock the concept of "fairness" as being naive or useless, but rather just to point out economic realities: Companies do not necessarily price things in terms of "cost plus", but rather try to optimize. In some cases, they may sell certain items at below cost or near cost in order to attract customers for some other items.

In fact, negotiating for a market rate can be seen in the light of fairness and "cost plus". If you suspect you are underpaid, and research (Glassdoor, etc.) suggests this, then implicitly, your time is less valued than some of your colleagues. I doubt many would say their time "costs" less than others'; thus, would such a suggestion be fair?

0. https://news.ycombinator.com/item?id=8813138

z3t42• 12 years ago

Make sure you start high then request a 5% raise Every year! If you wait five years and request 25% it's Never gonna happen! If possible, try to get 2.5% every six month.

minimaxir2• 12 years ago

Make sure you start high then request a 5% raise Every year! If you wait five years and request 25% it's Never gonna happen! If possible, try to get 2.5% every six month.

It's worth noting that due to compounding, these are not mathematically the same.

In 5 years:

5%/year: 27% raise from base

2.5%/6mo: 28% raise from base

z3t42• 12 years ago

Thanks! I was hopping someone would interpret that. Also, your boss probably hates these talks just like you do, and want to get you out of the room as fast as possible. So go low and often.

Bahamut2• 12 years ago

Depending on where you are and how good you are, 5% (or 2.5% semi-annually) annually is likely low. Any competent developer should be able to negotiate $5000+ raises in 6-12 months based on performance (or jump to a job paying much better).

heisenzombie• 12 years ago

Nice advice, but I feel like articles like this make marginal improvements to my comfort and skill at negotiation.

I think perhaps it boils down to unfamiliarity: I've done it a very small number of times, and it feels alien and weird. Especially some of the language used. Compare that with a manager who has hired $x employees a month for a decade, and doesn't think anything of it.

I wonder: Are there any videos available of negotiations (real or realistically faked) where one could build familiarity with what a successful negotiation looks and sounds like? I think that might be a useful addition to textual "how to" guides like this.

stygiansonic2• 12 years ago

I don't have any videos, but I've found this book, Negotiating Your Salary: How to Make $1000 a Minute[0] to be helpful. Sensational title aside[1], it's actually a fairly concise and easy-to-read guide with examples of questions/answers for various situations, strategies and counters to commonly-used negotiating tactics.

It's mainly focused on salary negotiations during/after an interview, but I get the sense this is what you were after. Apologies if this was not the case.

0. http://www.amazon.com/Negotiating-Your-Salary-Minute-Revised...

1. The title may not be so sensational in my experience; most negotiations don't take hours and thus while the effect may not be "$1000 a Minute", it may not be that far off.

jacalata2• 12 years ago

Try out Ramit Sethi's videos (http://m.youtube.com/watch?v=XY5SeCl_8NE). I haven't watched any yet myself but I've heard they are good. He also has an article on negotiation at http://www.iwillteachyoutoberich.com/blog/salary-negotiation...

mavsman• 12 years ago

Started watching that video and got 5 minutes into it. Thank you for sharing it. It shows good negotiation techniques but it brings out two thoughts/emotions in me.

1. This conversation is painful/awkward 2. Prepping for negotiations is stressful

wallflower• 12 years ago

As long as you do not own what is being produced you will always be in a 'time for money' situation. You are trading your time for money (sometimes 5% more a year - or 15% more a year, if you strategically play chess with the job market and your skills niche).

I believe we are all much better off if we focus on building our own niche community/product (a.k.a. http://javascriptweekly.com - the number of subscribers is not as important as the quality of the subscribers).

watty2• 12 years ago

I'm about to ask for a raise for the first time but I'm not entirely sure how to handle it. I've been with this company for 7 years and only received 2-3% increases the past 3 years. I interviewed at a competitor and they offered me a 20% increase, which I turned down.

During negotiations should I simply ask for them to match? I don't want them to think I'm actively looking for a new job but want to get paid my worth.

bsdpython• 12 years ago

Why did you turn down the offer? You are in a MUCH stronger position to ask for a raise with another offer in hand.

watty2• 12 years ago

Well they requested a quick response and it was a bad time for me to negotiate with my employer. They made it pretty clear that I could contact them if I ever needed a job.

NinjaTime4• 12 years ago

Leave! Then you will see how much you were worth.

charlesdm• 12 years ago

The easiest way to do this is to determine how much value your work has added to the company you work for. If the software you've worked on has added a million dollars in extra profit to the bottom line, that is a good starting point to start from. Secondary business objectives could count as well, e.g. increased customer satisfaction, innovation, etc.

A problem for many people is that it's hard to compute their exact value, or they are afraid to have that kind of discussion.

If you're being paid $75k a year, and you've added a significant amount to the bottom line, I doubt you'll have a hard time negotiating a $10-20-30k increase. Same goes for a new job: give them examples of achievements, and show how you were beneficial to the business.

Negotiating a new secondary offer is a great thing to do; it gives you additional leverage. If there's a chance a value creating employee will leave, there is no reason not to give a raise. You could use that offer to negotiate a 25-35% increase, if you can show the value you've created at your current company.

To put it bluntly, most employees are actually not worth that much. They get hired at the least amount possible, and they execute strategies, for the most part, set by a few people who are paid significant amounts.

I also like this Quora post: http://www.quora.com/What-kind-of-jobs-do-software-engineers.... Check out the first answer written by Amin Ariana; it explains things well.

seekingcharlie3• 12 years ago

I recently asked for (and was awarded) a raise. I have weekly 1-on-1's with my boss (CEO) - they usually go for about an hour & we simply talk about everything happening in the business/team.

At the end, I simply said 'Something I want to bring up is that I've looked at the market and I don't feel I am being paid adequately for the value I'm creating'. I'd be lying if I said it wasn't an awkward conversation. I didn't mention any number at all & was actually met with a slightly negative response, but a week later at the next 1-on-1, it was brought up again & I was awarded a 10% cash raise (I negotiated some ISO's too).

In your scenario, I wouldn't tell them that you interviewed at a competitor either. You can simply tell them that you've looked at other roles & determined market rate as being higher than what you're currently paid. Only use another offer as leverage if you are prepared to leave & take that offer.

Modesty aside, I'll also admit that I'm a high performer in our team & so I already knew that I had leverage. Something I've learned though is that unless you bring it up, it's never going to happen - there is no-one looking out for you unfortunately, so take the initiative & help yourself where you can - it equates to hundreds of thousands of dollars over your career.

d357r0y3r• 12 years ago

I think the dynamic at your company (where you're a direct report to the CEO) is a totally different animal than your standard corporate dev job. When you're working at a place that employs 1000+ people, these types of conversations are much less likely to go in the direction of the employee.

biafra• 12 years ago

I am unable to negotiate a raise (because I don't even try). I always got (10%-15%) more (in the next job) when I wanted to leave and looked for something else. Usually still having a job that I want to leave but not having to find something immediately allows me to to negotiate a higher salary. OTOH I never left a job just to get more money.

gaius9• 12 years ago

The conversation would go something like, I am ready to take the next step in my career, take on more responsibility, company B have offered me a role doing X, Y, and Z, but I'm happy here and would like to stay, is there anything you can do for me?

The trick is, make them think you are not looking, but that others are looking at you.

But you have to have the offer in-hand, and you have to be willing to pull the trigger.

chrisbennet• 12 years ago

Because you've been at the company for 7 years they may take you for granted. You didn't make any noise or leave when you didn't get a raise for 3 years so they probably don't consider you to be a "flight risk".

Another possibility, is that you've stopped increasing your value to the company. This is normal. Einstein probably wasn't reading patents any faster at 7 years than he was at 3 years when he worked at the patent office.

More importantly to you, the company may not be a place where you can "up your game" any further. You need to seek out new jobs where you can increase your knowledge and value.

johnward7• 12 years ago

Well I wouldn't have turned down the 20% increase I would have taken that to my boss. Did the same thing and was made a counter offer that was better.

beachstartup• 12 years ago

as a business owner/operator involved in everything from sales to hiring to vendor purchasing, here's the most important thing:

if you can't walk away from a negotiation, it's not really a negotiation. if you feel, at any point, compelled to stay even though your interests are not being met in a reasonable matter, you're going to get screwed - and it's your fault, not the other person's.

in a true negotiation both parties are attempting to find an optimum solution that solves for 2 sets of 'peer to peer' requirements. it's supposed to be a cooperative endeavor. if at any point it turns contentious, you back out immediately. the opportunity was never there. it was just an illusion. this is the hard thing for people to grasp.

unfortunately, for most people these are things you learn by doing. "not all that glitters is gold".

Jacqued• 12 years ago

That's a very enlightening bit, especially for people who are not used to negotiate stuff all year round.

For me it boils down to this : I try to be as comfortable walking away as I would be accepting an offer. Otherwise I just don't enter any negotiation phase. Also when expressing salary expectations, I try to aim high enough to be sure they will not accept my initial demand. If they did that'd be a sign I just left something on the table.

However, it can be most difficult to put oneself in a position to leave the table. Developers are in a very privileged position in this regard. For most employees walking away could mean being out of a job for several months and employers know this.

Terr_3• 12 years ago

if you can't walk away from a negotiation, it's not really a negotiation.

Reminds me of a quote from a G.K. Chesterton book:

"But surely it is a very old principle of law that a leonine contract is not a free contract. And it is hypocrisy to pretend that a bargain between a starving man and a man with all the food is anything but a leonine contract."
He glanced up at the fire-escape, a ladder leading up to the balcony of a very high attic above. "I live in that garret; or rather on that balcony. If I fell off the balcony and hung on a spike, so far from the steps that somebody with a ladder could offer to rescue me if I gave him a hundred million francs, I should be quite morally justified in using his ladder and then telling him to go to hell for his hundred million. Hell, indeed, is not out of the picture; for it is a sin of injustice to force an advantage against the desperate [...]"

http://gutenberg.net.au/ebooks05/0500421.txt

curiously2• 12 years ago

A tech employer in Vancouver once told me that if an engineer tries to negotiate for a higher salary that is a signal that they care only about money and that they wouldn't be good hire, regardless of their experience and skillset. This is one of the "big" tech companies in Vancouver, BC. Never mind the hundreds of small sweatshops here.

NinjaTime4• 12 years ago

I once had a interviewer ask me "How much would it take for you to work for us"?

I told him that I didn't understand the question and so he said "How much do you need to live on?"

I asked him how much does it take for him to live on? He walked out and so did I.

hueving• 12 years ago

The last person to leave an interview isn't really "walking out".

ido2• 12 years ago

I don't understand your objection to his original phrasing - he asked you what your salary requirement is?

UK-AL3• 12 years ago

And yet that's exactly what company is trying to do.

zyxley• 12 years ago

I'm very happy to be with a company that has a standard policy of yearly 10-15% pay increases. We tend to do unexciting and sometimes just plain weird contract work for other companies, so my company has to pay us what we're worth to keep us around.

NinjaTime4• 12 years ago

Which company is that? I will send them my resume right now.

ryanmonroe2• 12 years ago

I found this video useful.

https://www.youtube.com/watch?v=km2Hd_xgo9Q

vmarsy• 12 years ago

I just finished watching it, Very interesting! I tried to find more information about the video, here's what I found:

An article from Harvard Business Review from the speaker[1], He summarizes the main points:

1) Don’t underestimate the importance of likability.

2) Help them understand why you deserve what you’re requesting.

3) Make it clear they can get you.

4) Understand the person across the table.

5) Understand their constraints.

6) Be prepared for tough questions.

7) Focus on the questioner’s intent, not on the question.

8) Consider the whole deal.

9) Negotiate multiple issues simultaneously, not serially.

10) Don’t negotiate just to negotiate.

11) Think through the timing of offers.

12) Avoid, ignore, or downplay ultimatums of any kind.

13) Remember, they’re not out to get you.

14) Stay at the table.

15) Maintain a sense of perspective.

Here is a quick summary from "BatMasterson" on that forum [2], they are useful for those who watch the video

Dr. Malhotra makes some good points.

I've summarized quotes from his lecture (not the entire 15 points) here:

1. Think about who you are and what you want do to in your life. Pick the right choice

2. What is not negotiable today may be negotiable tomorrow.

3. Stay engaged.

4. The Mike Tyson allusion: "Everybody has a plan until they get punched in the face"

5. Get the why they're asking what they are asking.

6. If they make an ultimatum, generally speaking, (you can) ignore it.

7. There is no right answer to every situation -The Star Trek Captain trial allusion where the answer is Yes...provided that, considering this...

8. These people like you but you are not their only concern.

9. Negotiating w/ your future boss is not the same as negotiating with HR "adapt-to-each".

10. Don't be in a mad rush to get offers

11. Tell the truth. Resist the temptation to tell even a small lie.

[1] https://hbr.org/2014/04/15-rules-for-negotiating-a-job-offer

[2] http://www.wallstreetoasis.com/blog/how-to-negotiate-your-jo...

No1• 12 years ago

The main tenet of this blog post is that you should argue for your compensation based on the amount of value you add to the company.

That's nice in theory, but the techies' dilemma is that it's often difficult or impossible to put a hard number on the value they have added.

How many customers were retained because you decreased response times by 100ms? How many customers were gained because of that slick UI you created? How many discounts were not handed out because of downtime that wasn't suffered because of your cautious error handling and exemplary testing? How much money was saved because of that documentation you made that helped the new hire ramp up faster?

Even when you can put a hard number on work you've done, like decreasing hosting costs by $15k per month, isn't that why you're paid so handsomely already? How are you going to do that again next year? (Why haven't you done it already?) Wasn't it a group effort?

The reality is, you're basically going to get paid based upon what your employer has deemed everyone else in your position is earning, plus or minus some % based upon experience level, your reputation, and how badly the company needs the position filled. If you don't like that, time to go into management or sales.

ryanmonroe2• 12 years ago

The value you add to the company is not based on how many customers were gained from your completion of task X or similar metrics. If you decrease hosting costs by $15k per month and only get paid $5k per month but dozens of others would do the job for $3k, you aren't in a good position to ask for a raise.

Your value to the company is how much it would cost, in time, effort, and money, to find a replacement(s).

lifeisstillgood2• 12 years ago

Time effort money multiplied by risk of getting less value

That's the important component - the volatility of performance has a major impact on price of an option !

7Figures2Commas• 12 years ago

The subtle point that's lost in so many of these blog posts is that value-based pricing is a model for consultants. Employees are not consultants.

Consultants are typically brought in to solve specific problems that are perceived to be high-value. If a company hires a consultant to sustainably reduce hosting costs by $15,000/month, a good consultant will probably have no problem pricing the engagement as a not insignificant percentage of the savings over a reasonable period of time. Good luck trying this as a rank-and-file employee. If you're that good and are serious about maximizing your earnings, become a consultant.

cat9• 12 years ago

You can address most of those concerns with algebra, some light research, and Fermi estimates.

This is not a problem where you need precision, just a reasonable level of accuracy and a well-presented argument.

drdeadringer• 12 years ago

... and Fermi estimates

I can figure out which algebra to use and what light research to perform... but may you please educate me on these "Fermi estimates" regarding salary negotiation?

hnriot6• 12 years ago

the real world doesn't work this way when people are involved.

hnriot6• 12 years ago

there are all kinds of intangibles not mentioned here. what if you have an idea that transforms the company's sales numbers or you dream up a better way of doing the builds that reduces integration bugs. So many ways an employee contributes intangibly.

you're right, pay is basically what your peers make +/-

nitrogen• 12 years ago

These "intangibles" can still have a value assigned. Each integration bug eliminated by an improved build process can have a cost assigned to it by using the average time and money cost of previously fixed integration bugs. Example: "Each integration bug costs 1hr of senior dev time at $100/hr fully loaded and 8hrs of junior dev time at $50/hr. The new build process produces X fewer integration bugs per month, for a savings of X*$500 per month."

"Transforming" the sales numbers should also be measurable. Example: "Before, salespeople were closing x% of deals and missing scheduled followup on y% of contacts. Now (x+5)% of deals close and only (y/2)% of contacts are mistakenly dropped."

gaius9• 12 years ago

Yes, particularly in the UK the vestiges of the old class system are that no matter what price the market clears at a blue-collar worker can never be paid more than a white-collar manager.

So if you are in a situation where there is a glut of junior managers and a scarcity of talented engineers, then seemingly inexplicable things start happening to salaries.

yummyfajitas• 12 years ago

How many customers were retained because you decreased response times by 100ms? How many customers were gained because of that slick UI you created?

These two things can be precisely measured, provided you have the traffic. And you should be measuring them anyway, because that slick UI might be hurting things.

A/B test all the things. Then you'll know both your value, and whether any specific improvement you made is worthwhile.

nsxwolf• 12 years ago

A salaried employee is never going to gain anything from this except a small bonus, a marginally higher salary increase than his or her peers, or a pat on the back.

bane• 12 years ago

The main tenet of this blog post is that you should argue for your compensation based on the amount of value you add to the company.

The truth is that your employer doesn't consider your value as a major part of their compensation offer, they consider what would happen if you didn't exist. Is there or isn't there an endless ocean of other candidates who could more or less do what you do and do it for what they're willing to pay you and no what you're demanding?

In case you aren't sure what the answer is, there is.

joshvm• 12 years ago

The trick is finding a field that doesn't have legions of hungry coders waiting to fill your boots..

Good STEM programmers (i.e. science companies) are very hard to find. The jobs aren't as abundant as web dev, but they are there, pay reasonably and it's easy to show how valuable you are to the company.

curiously2• 12 years ago

The reality is, you're basically going to get paid based upon what your employer has deemed everyone else in your position is earning, plus or minus some % based upon experience level, your reputation, and how badly the company needs the position filled. If you don't like that, time to go into management or sales.

Pretty much this. If you are not part of the profit generating side of the business, you will always be viewed as a cost overhead. Engineering is unfortunately a question of cost expenditure for businesses but even more so for smaller software companies who don't have monopoly.

frandroid• 12 years ago

paid based upon what your employer has deemed

Your job is to change that perception.

mseebach• 12 years ago

but the techies' dilemma is that it's often difficult or impossible to put a hard number on the value they have added.

Yes, but the point is that if you want to make a good salary, that's the problem you need to fix. What is your approach when you encounter something that's "difficult or impossible" in your daily work? You apply intelligence and creativity and create a solution.

The reality is [..] If you don't like that, time to go into management or sales.

Whatever you do, DO NOT try to change the rules. DO NOT try to learn what it is management and sales do to get those nice, big salaries. When something is hard, GIVE UP.

Of course you need to understand the employer's BATNA as well: If they don't appreciate tech, ie. their BATNA is to fire you/ignore you until you leave, then that's what you do. But companies can do that to their sales and management teams as well.

SandB0x• 12 years ago

Someone made a comment a while ago "The only way to capture your economic value is to put it on the market as a business" and I think they are spot on. The mindset of dealing with people/employees and dealing with businesses seems completely different.

https://news.ycombinator.com/item?id=8357471

NinjaTime4• 12 years ago

Another B.S. article about negotiating IT salary's. If IT salary's kept pace back before the Dot bomb days everyone would be making 150k starting.

Here is why we don't

IT has for the most part never been a money maker of a lot of companies. They see it as a loss leader. IT is seen as the "Oh boy here comes the IT budget again." Unless of course your business is making software for the masses. But then I have been at 3 companies like that and IT was always the first on the chopping block. You are paid only as much as it takes to replace you, unless you walk on water then you should be at Google or FaceBook.

The only way to get a 20 to 25k raise is to find another job. Unless of course you are doing the job of 4 people which in IT 99.9% of the times you are. Don't believe me? Go ask for a 20k raise if their eyebrows shoot up like Mr. Spock then you know how much you are worth. I sure hope you have another job lined up because that's the queue to them you are looking.

This has been my experience and I have done exactly what I have stated above.

I now do security and compliance. No more wake up calls, no more you can't go on vacation because Oct. through January is the time of the year where we make our money.

Oh and that 100K salary mark gets very hard to justify every year especially when the CFO looks at the books and has a list of who is making over 100K per year. Unless of course you live in California and NewYork then that's welfare wages.

phamilton4• 12 years ago

Are we differentiating between IT and Engineering and Operations?

I think OP was referring to Engineers and Operations at software companies, not IT at an accounting firm.

skeoh• 12 years ago

Sorry to be pedantic but it is the "cue" to them that you are looking, not "queue".

jsprogrammer2• 12 years ago

Kind of undercuts all the points made. Also, if you walk on water you should be working at Google or FaceBook? Hunh?

tomp• 12 years ago

IT has for the most part never been a money maker of a lot of companies. They see it as a loss leader.

Exactly. I'm pretty sure that IT is harder and requires more training/practice than e.g. finance or sales, but profits from those two are very easy to quantify and it's quite obvious who the deal-maker was, whereas IT is mostly teamwork and doesn't have obvious profits.

jsprogrammer2• 12 years ago

Shut down the IT and watch all those profits disappear. As in, finance/sales guy can't pull up his daily/weekly/monthly/quarterly/yearly numbers.

Oh, and your customers are gone too because you can no longer deliver any product or added-value. So, no income (except investments).

vinceguidry4• 12 years ago

I got a $15K raise last month, from $60 to $75K. I expect a much bigger one next year. It's not impossible to get those raises, but you have to align your thinking with the way the company operates, have supporters in the company, and bring real value to the table.

If you're just checking boxes or asking for more money "just because", then you deserve the arched eyebrow you're bound to get.

hnriot6• 12 years ago

a 25% raise is unlikely next year, sounds to me that this was more of a salary adjustment than a raise which are typically between 3-9%. At your salary level it's not uncommon to have adjustments to bring you in line with others in your team. Possibly they started you low to see how it would work out.

GFischer2• 12 years ago

You're in the U.S.?

By reading Hacker News I had the impression that everyone there that is not a junior is making at least U$100k/year, except for special cases in rural areas or small towns.

imaginenore• 12 years ago

^ This guy is right. Changing your job will get you a much higher raise than asking.

In my own experience I only got a significant raise once in my career - I asked for $90/hr when I was making 80/hr, and they gave it to my to my surprise. That's around $20K/year.

noname123• 12 years ago

(Sigh). I wish I was making 150K starting salary. Unfortunately, I'm not and I live in BosWash which makes me part of the below-welfare-wage numbers. I wish folks could have more attitudes like NinjaTime so that they can become the enlightened masses.

Nothing is more discouraging than watching Joe and Jane from high school and college getting promotions at their consulting, law and medical careers knowing that I was way smarter than they were. Cue Kurt Vonneghan, "The real horror is waking up one day and realizing your high school class is running the country"; well, I'm just slightly disgusted that just the undeserving plebes, not the popular high school kids are buying McMansions and starter luxury cars!

Well, at least I'm part of the enlightened. I got my security clearance (no H1B competition), my personal contracting sole proprietorship (line-by-line deduction), Cisco/Oracle/MCSE certificates (certified scrum-master), and I intend to stick it all the way to the Man!

anon123anon• 12 years ago

knowing that I was way smarter than they were.

You're not smarter than them. If you were, you would have thought about your career, instead of sloppily stumbling into the first thing that appealed to the teenage version of you.

Domenic_S• 12 years ago

They see it as a loss leader.

Cost center, not loss leader.

It helps to be in an IT-focused company, vs a company that has an IT department. I've been in both and the former is vastly better.

johnward7• 12 years ago

"The only way to get a 20 to 25k raise is to find another job. Unless of course you are doing the job of 4 people which in IT 99.9% of the times you are. Don't believe me? Go ask for a 20k raise if their eyebrows shoot up like Mr. Spock then you know how much you are worth. I sure hope you have another job lined up because that's the queue to them you are looking."

I used this technique to get that much of an increase. First found a job that I was actually willing to quit for. Went to my boss with the offer. They made a counter that I accepted. Without that offer I would have gotten probably 2-3% yearly.

People get too caught up in trying not to hurt their employers feelings by threatening to leave. Who cares if they know you were looking for another job. It's a business decision. I've tried to leave more than once at my current position and they don't treat me any differently. The key is to be prepared to actually leave if they call your bluff.

Also this probably means I was severely underpaid to begin with.

Beached• 12 years ago

I used this technique as well, it didn't end up in a raise or another job position, or any change at all. They just said no. I ended up taking that other job offer I had lined up since it was clear the company views its workers as replaceable cogs rather than valued contributors.

mikerichards• 12 years ago

Well, there's all sorts of factors involved, but I've found that the more you know about the company, the better you are at negotiating. That sounds like a no-brainer, but that's probably just as important as market value.

For example, I was contracting a company that had most of their software development teams working as contractors. About 6 months into contracting there, I learned that they had made a strategic decision to try and hire everybody instead of contracting and the reason they did that was to save on money and more importantly, retention.

So they would ask me to convert, and I would pretty much blow them off for a couple months, and they would ask me again a couple months later. So after a few times of this routine, I knew I was in a better position to start the negotiations. Also, I had waited for several other contractors to convert and got some tidbits from them.

At the end of the day, I negotiated for much more than average salary in my market.

If you're contracting, it pays to be contracting with a staffing firm that knows the decision makers in the company.

100timesthis• 12 years ago

another angle: How much would the company loose if they had to recruit another person exactly like you? The headhunters get 20% of your salary the first year, than it's cost time and working hours to find new employee, bring them up to speed, the insecurity that the new guy is not the right person, etc..

azakai• 12 years ago

Typically, in a mature company the salaries of the dev team are a rounding error on the total operation.

I don't think that's true at all. From small startups to large successful no-longer-startups, often dev salaries dominate spending, from what I usually hear.

Perhaps my experience is limited? Or perhaps the author means something specific by "mature company"?

tracker1• 12 years ago

The company I work for now, is around 18-20 employees (high/low for the past year), and the 5 people working in IT account for more than half of payroll... so I'd say you are probably correct.

IT personnel typically pays well over $50k/year for an established (not tech support) role. And over $90K for a senior developer role (usually more). This is usually twice what an employee in other roles will make.

Rock star sales people in a sales driven company can make quite a bit more, but this tends to be commission based... there is a risk there, and the reward is higher pay. If you have a good idea, and want to take a risk, then you can reap larger rewards from that, though you have as much or more chance of falling on your face. I've now done that twice, and am happy to make a nice salary as a senior developer or software architect than deal with the risk/reward scenarios.

Mandatum2• 12 years ago

As an intermediate developer I've managed to quadruple my wage after going from full-time (40 hours) to contracting rates (30+ hours, 6-month term). I brought up the fact that my side projects are starting to gain traction, but I know the work I'm doing for the company is important and I'd like to finish what I started.

I also brought up that I've had a few job offers with highly reputable firms, and my current career growth had stagnated where I was currently positioned.

Basically; me me me.

geuis• 12 years ago

Very timely repost. Just had coffee with an old female colleague an hour ago about negotiating salary at a company she's joining. I remember reading this a few years ago and it's been helpful advice.

pmoriarty2• 12 years ago

Does just receiving an annual performance bonus make your negotiating position stronger or weaker?

How long would you wait after the bonus to ask for a raise?

What if you don't want to stay at your company much longer? Should you still ask for a raise, and would you feel unethical for leaving soon after getting a raise?

khuey• 12 years ago

If you plan on leaving shortly, what's the point in asking for a raise? I would not say it's unethical. It just seems like a waste of time.

montz12• 12 years ago

If you want to know what companies offer as base salaries check this website I made that uses H1B wage data. The tech companies have a very wide range for negotiation at each level and it's important to know that when you go into salary negotiations. Although this is H1B data, for top companies these are the same base salaries that US residents are also making, and they are pretty damn high....Look at google for example: http://salarytalk.org/search#%7B%22qcompanyName%22%3A%22goog...

grogers• 12 years ago

Looking through the pages for "software engineer" I see mostly in the range of $90k - $135k with a few outliers. This is pretty reasonable for a big software company in my experience. There are some that are $200k or more, but these are probably very specialized roles.

Even searching through all companies there are some down lower around $70k, but most of these are companies I've never heard of, in locations that are likely cheaper than New York, SF bay area, etc where Google has offices.

montz12• 12 years ago

Thanks for the observation. Yes, averaging over all companies will give you those results. Remember that is a comprehensive list over all companies in the USA. If you're targeting companies like Google, sort by descending order in wage, and then scroll through the first 50 records, about 40 of those are software engineers with salaries way above 200K. I think that's phenomenal.

aliston• 12 years ago

That is an absolutely fascinating data set.

I'm really curious, for the technical salaries that are 500k+, does anyone know what is going on? There basically appear to be a bunch of random system analyst, database administrator and similar positions pulling down 600k in the most random places around the country.

ddingus4• 12 years ago

First, know things and people are worth what others will pay for them

As a floor, you need to fund a modest life, and that means retirement, healthcare, personal improvemwnt, food, home, etc...

Add some small margin onto that for quality of life.

Second, get business minded. It helps to take an interest in the company, know it's financials, and it's goals. This helps you position your value in direct, meaningful terms.

I very strongly agree with being ready to walk when it comes time for salary discussions. If you can't walk, you will get the lowest comp, unless you have some relationship or other leverage to play on.

The bigger the increase, the more this matters.

The idea that you are as valuable as a replacement and training is false. This ignores you as a person, relationships you have, etc... this is often the framing, but do not be afraid to expand the discussion.

Set goals and justify them. This is something sales people do all the time. They are motivated by those goals and communicate them easily and consistently.

Ie: I need 200k this year to fund my travel and home investment plans.

A tech person may have identical goals, or maybe is wanting to build something, or send a kid to school.

Value these and frame your motivation to work in terms of your goals, company, love of the work, etc... Managers, and higher level people in the company understand and respect goal oriented people. Make sure your goals and the company align, or make basic sense and there are no conflicts.

This all speaks to the work being worth it and it also speaks to reasonable expectations as opposed to just greed. Greed isn't bad. Clear, meaningful goals are easier to sell and for others to identify with. When others identify with your life purposes, they can value them and very easily see how you are inclined to stay and work for them. They also nicely dodge the "how much is enough?" Type questions.

Get your other offers and or secure relationships needed to know you can land on your feet should you need to make a change.

Be flexible. The company isn't seeing it's goals play out all at once, and you won't either, but there should be a path to get there that is realistic.

All of this boils down to a "this is where I need to be and why it matters" conversation.

Shared and aligned goals is a great basis for a loyalty type arrangement. People will work hard for others who take care of them and seeing that play out is worth a lot.

Another advantage of goals is there sometimes is more than one way to get there besides cash. Nice to have options on the table.

If it goes well, great. If not, you have your fall back.

You may be able to contract too. Where a company really cannot pay you what you need to realize your goals, perhaps a more flexible arrangement can leave you empowered to do it your self.

This does not need to be a conflict of interest, particularly where you may have more skills not being used, or relationships where you can add value in atomic, easy to execute ways.

Another consideration is involvement with sales and marketing. If you can take some risk, you may find opportunities to capture nice rewards by being part of that process. This takes some people skills, but getting them is worth it.

Ask sales how valuable a tech person who can handle and understand the sales process is. They could be your most potent value advocates.

You help them close a big one, and it directly benefits them. You leaving will present an opportunity cost they will have zero problem justifying.

Of course there are spiffs and such potentially mixed up in this and it all depends on who you are. Taking some risk will differentiate you from other techs and that can be worth a lot.

The first time you walk it is hard. The first time you cultivate advocates is hard. The first time you take risk is hard, and the first time you get a nice increase is hard.

All worth it. Actually it all is as worth it as you think it is. And people count on those things being hard enough and not worth it enough to keep you inexpensive.

What is worth what? That is your primary question to answer. Sort your life goals out, value them, decide on risk and alternatives, and then proceed to have the dialog needed to get you there.

Once you start down this path, you do not stop. It becomes part of you and others will see that mindset and treat you accordingly.

ddingus4• 12 years ago

One other thing. When you reach a goal, share that and how it motivates you to continue.

This plants the seeds for future discussions.

Frame this stuff in ways that make them feel good about your comp, not negative.

A cycle or two of this makes things easier and more rewarding fo everyone

dustingetz• 12 years ago

here's an idea:

The market for developers is a lemon's market.

That means, if you have 100 good cars selling at $2000, and 100 lemon cars selling at $1000, all the lemons will sell first, because the people making purchasing decisions aren't expert enough to tell the difference.

So it is very rare to be paid based on value, because why would a [CEO|CTO|hiring manager|whatever] pay $1M for this guy, when he can pay $150k for that guy, and he can't really tell the difference between them?

Just an idea, I haven't seen this discussed anywhere, what do you guys think?

aplummer2• 12 years ago

I dont think the CEO should be doing the hiring... it should really be the tech lead -> CEO later to confirm?

aplummer2• 12 years ago

Ill clarify bluntly because apparently this was worth a -1.

"when he can pay $150k for that guy, and he can't really tell the difference between them?"

Your tech lead should be able to tell the difference and see the actual value in programmers and explain that to the money people. That is why this lemon theory entirely requires a bad hiring structure.

tim3332• 12 years ago

It's probably an issue which is why to get rich it's good to own equity in the company. Take for example Brian Acton, turned down for a job at Facebook in 2009, cofounded Whatsapp, acquired by Facebook in 2014 for $19bn.

jacques_chester• 12 years ago

Almost all people who turn down jobs at Facebook go on to not be billionaires.

mattbrewsbytes• 12 years ago

Interesting perspective on it. The comparison seems valid to me since it will take probably 3-6 months to really know if you ended up with a lemon of an employee. That is if the manager can tell the difference. Obviously excluding a bad hire/non-match which would be obvious in week 1 or 2.

When I think about this perspective, another way to state it is that maybe the work being done doesn't actually need the costly person?

Back to the car analogy, if your requirements are to drive 5-10 miles per day do you need a luxury car with GPS, sound system, leather, headlight wipers, etc.? Or can you use a beat up car that might be a lemon that mostly works? And when the beat up car has problems you get another one. This seems to be the approach larger companies (emp_count > 5000) take since they want to commoditize the work and make the employees completely replaceable.

zupa-hu• 12 years ago

In (my) theory your salary is between the company's best alternative (hiring someone else for X) and your best alternative (go work for other company for Y).

Companies do well as they interview many candidates. Developers generally do worse as they go to less interviews - obviously due to resource constrains.

If you are shit hot good, both X and Y go up. The black magic of negotiating is a rounding error compared to how great & unique you are.

eru9• 12 years ago

Exactly! Keep interviewing, and be ready to jump ship. If you are willing to relocate, the world is your oyster.

And you don't have to be all that great and unique. Interviewing for a tech job is a skill you improve with just a bit of practice.

hartror• 12 years ago

A few more reads on this subject that I have collected from HN:

* http://www.kalzumeus.com/2012/01/23/salary-negotiation/

* http://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pro...

* https://keen.io/blog/29904565692/how-i-negotiated-my-startup...

siliconc0w• 12 years ago

my short version:

Every two to three years start looking for another job - chances are you are being underpaid and holding out for a meaningful raise or promotion is usually a bad idea. Few companies seem to keep salaries properly indexed to the market. At least in IT.

When you get an offer - always always counter it. No reasonable business is going to withdraw an offer if you counter. Figure out what you're worth and add 5-10%. If the first offer is already on the 'high end' of the spectrum still counter and ask for a signing bonus, options, better year end bonus, or more vacation. That will most likely be the most profitable email/phone-call you'll have - at least until you repeat the process in 2-3 years.

hnriot6• 12 years ago

interesting to read all these from the engineer's perspective. from the manager's side of the table things are quite different. If an employee comes to me and asks for a raise then I begin the process to replace them. We give reasonable raises, we pay fair market value and an engineer might make a little more elsewhere but they'll be giving back their RSUs and the opportunity to work on really cool stuff. If, however, they want something else then good luck to them, people are all different and it's a free country, but asking for raises means they aren't happy so they will leave anyway, either way, I begin looking.

when someone joins, unless they are at vp level they really don't have much negotiating opportunity, we make a decent offer and they either take it or leave it. we very seldom adjust the offer.

Iftheshoefits2• 12 years ago

This is true at most employers, and is one of the biggest contributors to churn and the lower-than-it-should-be pay in our industry. Companies whose offer includes (implicit or explicit) statements about how cool the projects are are peddling the same employees-are-pets nonsense that the "free food/perks" companies peddle, and there is no shortage of labor ready to lap it up.

itsybitsycoder2• 12 years ago

Yup, and high churn actually makes the projects less pleasant to work with IME. More turnover means the people updating the projects have a weaker understanding of how the projects work, so they create more bugs/cruft than an equally-skilled developer who has worked with the project longer. And by the time those developers know the projects inside-and-out, they are already looking to move on.

ddingus4• 12 years ago

Another manager here.

I don't automatically do this. I want to know why, and what their value proposition is.

People have things happen and reasons and goals for wanting to change their comp, and frankly, that goes both ways. I've had people want less and to change roles for very similar reasons.

Replacement is expensive, so is commitment and vision. For some people, yes. It's a trigger for replacement. For others, it's a time to discuss keeping everybody healthy and productive.

And there could be options too. Perhaps more money isn't optimal. Nobody knows, until there is a discussion.

johnward7• 12 years ago

What would you say if the "value proposition" is simply Company Y will pay me more?

aridiculous• 12 years ago

I'm really perplexed by this common attitude.

Employees are sometimes happy. Sometimes they're miserable. Sometimes they're in-between — for complicated reasons, that may lie outside of work.

Firing any employee that asks for a raise is so unbelievably short-sighted, binary, sociopathic, and potentially bad for business (morale, replacement costs, unknown costs), it's cartoonishly villainous.

You sir, appear to have authoritarian tendencies.

johnward7• 12 years ago

Yeah sounds like exactly the kind of place I wouldn't want to work anyway.

hnriot6• 12 years ago

nobody said anything about firing anyone. That would be illegal for one thing.

jacquesm2• 12 years ago

but asking for raises means they aren't happy

That's an assumption on your part.

And since you state up front that you are giving reasonable raises you essentially forestall the negotiations so unless your definition of 'reasonable' is different than the ones that your employees maintain you should have next to no turnover. If that's not the case you might have a problem there.

The 'opportunity to work on cool stuff' is worth $0 to a working dad with a mortgage, so likely you can do this but only to younger people, but people do not remain young forever and sooner or later their expenses will go up. And you sound like you will not be taking their position into account at all.

UK-AL3• 12 years ago

Several bad assumptions here.

If they're getting better offers elsewhere, its not market rate.

Whats to say other companies aren't doing cool stuff? All companies say this.

seekingcharlie3• 12 years ago

"If they're getting better offers elsewhere, its not market rate."

Exactly.

johnward7• 12 years ago

"If an employee comes to me and asks for a raise then I begin the process to replace them."

That makes you sound like a horrible manager.

hnriot6• 12 years ago

maybe, but when an employee asks for a raise, or say they are quitting does that make them a horrible employee. so many people think that work is some big philanthropic organization set up to serve their needs.

Iftheshoefits2• 12 years ago

It makes him the kind of low-level or middle-manager that certain companies love. His purpose isn't to support his subordinate employees in their work, it's to make sure the company pays as little as possible for as much work as possible, and to act as the first line of defense against employees who aren't "100% on board".

Clearly he thinks that "asking for a raise" puts an employee in the "not 100% on board" category. That makes him terrible at reasoning, and perhaps poor at empathy, and strongly indicates he's not the kind of person an intelligent developer who desires to be treated like a human being should ever have to work for, but I'm not sure it makes him a bad manager per se. He might manage very well in other respects.

pmoriarty2• 12 years ago

I commend you for your honesty. If more employers were this honest up front, the workforce would be a much better place.

Since we happen to be in a sellers market for IT talent, I suspect you would not have very many takers if your prospective employees knew up front that this was your attitude towards them, and they'd be valued so little that asking for what they thought they were worth would mean they would get fired.

You attitude would fly much better in a buyers market, where the employer holds all the cards. Then you could demand whatever you like, and the employee would most likely be desperate enough to lick it up.

mikekchar• 12 years ago

In something like 25 years in this industry I have seen this opinion time and time again. "I am not being paid what I'm worth". You can negotiate to higher levels of compensation, but there is more to life (and your job) than money. I have often seen people price themselves out of a job.

A normal high tech company runs an R&D budget that is less than 10% of earnings. The rest of the money goes to cost of sales, infrastructure (building, chairs, etc) and various other things. This means that on average your contribution needs to pull in at least 10x your cost in order for you to be seen as being worth it. There are also a lot of costs for hiring employees -- employee tax, insurance, benefits, etc, etc. So if you make $100K in salary, then your contribution has to bring in maybe $1.2 - $1.5 million.

You may think "Oh those bastard sales people are making way too much and aren't providing any benefit", but you will find that the company will still budget less than 10% of earnings for R&D. Whether it is justified or not, quite a few of the people in the "management side" identify a lot better with sales and understand their value a lot more. Unless you think of a way to significantly increase earnings, then you are depleting the pool of cash for R&D when you ask for a raise.

"Not my problem," you think.

Except Jane down the corridor appears to be very nearly as productive as you are (whether it is true or not is completely beside the point because everything will be judged by its appearances). She makes something like 60% of what you make. She's a freaking bargain! You, on the other hand, bitch and moan that you can't make ends meet on $100K and that you are living out of garbage bins. Plus you see yourself as the saviour of the company and without you everything will just collapse. Managers think, "God, please don't make me talk to that guy again".

The order comes down from above -- either 1) Our competitors are kicking our ass and we need to downsize R&D OR 2) We need to ramp up explosively to hit the next big business wave, so we need more programmers!

How will we reduce our expenditures or hire more programmers with the same amount of money? Easy! We'll do away with those bitchy-moany prima donnas and hire more of the absolute bargains that never complain.

Here's a secret I've learned. Being seen as worth significantly more than you are paid means your boss always approaches you with a sense of gratitude. In fact, creating a sense of solidarity with management in this respect shows loyalty. While it is true that, in general, companies do not return such loyalty, individuals in management will tend to select a handful of people that they trust and "can not do without". Those people will not be the guys that constantly threaten to leave for greener pastures, or that constant complain that they aren't appreciated.

I have never negotiated salary. I have either taken what has been offered and then worked hard to become an integral member of the team or I have refused the job. I have left jobs that I didn't like, but I have never left to make more money. Nor have I ever threatened to do so. I probably get paid less than I might if I pushed hard, but I can tell you that I enjoy the privileges of being "that dependable guy" much more than any salary could provide.

bdowling• 12 years ago

You won't be enjoying 'the privileges of being "that dependable guy"' in your retirement.

UK-AL3• 12 years ago

Management is most private small companies are pretty close, been there from the start etc etc

It's pretty hard to for a late employee to break in.

jerguismi3• 12 years ago

You have to take into account, that it is very difficult for the employer as well to evaluate the value of the techies to the company.

vproman• 12 years ago

The most important salary negotiation tip: DON'T TELL THEM HOW MUCH YOU ARE CURRENTLY BEING PAID OR GIVE THEM A RANGE.

Recruiters always ask this up front and INSIST that they must know. I have NEVER been denied the opportunity to interview for refusing to give a number upfront.

If you're applying at a company, it means you've done at least a little research on what they should be expected to pay and you see somewhere around that range as acceptable. You don't have to tell them that you've researched their rates and find them acceptable, because that too would be like giving them a range, instead the research is simply to avoid wasting your time. You wouldn't want to interview for a job that pays the position with compensation worth at most $60k when you're already making at least $100k.

This way, you have an advantage: you know roughly how much they pay but they have almost no idea how much (i.e. how little) you will accept as compensation. Best case scenario, they offer you MORE than what your research said they would, and you negotiate a little more on top of it and accept, assuming you actually like the job. Even if they say no to your counter offer, you're still ahead. Worst case scenario, they offer you less, they say no to your counter offers, and you have to decline. Either your research was wrong or they were lowballing you, either way you've got multiple other interviews in process (right?) so move on. If you find your research is repeatedly off the mark, find better sources.

No matter what, don't give them a number. Make them give you a number first and negotiate from there.

Luyt2• 12 years ago

DON'T TELL THEM HOW MUCH YOU ARE CURRENTLY BEING PAID OR GIVE THEM A RANGE. [...] No matter what, don't give them a number. Make them give you a number first and negotiate from there.

What tactic do you use for this?

wyclif4• 12 years ago

I tell them: "We both know that how much I am currently paid has absolutely nothing [emphasis in tone] to do with how you decide to compensate me."

This lets them know two things: 1. You're not going to divulge your current pay no matter what, and 2. Gives them a face-saving 'out' by complimenting them that their company is "different" and special (and makes it sound as if your compensation is totally their decision; the negotiation over a number has not begun yet).

daemin• 12 years ago

There's also the anchoring theory, where the discussion centres around the first number that any party says out loud. So in the case where the company goes first they might offer a low number (for them) which may be reasonable for you but not what you want.

So the way to use that to your advantage is to say a number first, but make sure it is far more than what you think you can get, but not absurdly high. That way if they accept you'll be pleasantly surprised, but if they negotiate down it will be around that figure.

Of course if you're not confident in that, just let them put out the first number and go from there. But NEVER tell them what you are currently getting, that will anchor your salary to what it is now plus a small increase.

rmc4• 12 years ago

"I'm sorry but my employement contract with my current employer doesn't let me talk about my current salary while I'm employed. You wouldn't want to employ someone who breaks contracts, would you?"

kephra2• 12 years ago

I have to agree, and even add: Never tell them first what you what want as payment. My method was always to say: Lets delay this unimportant money question. I'm a coder, I want to talk about coding, about your company culture, about your projects, about your testing environments, ... all those are much more important to me then salary.

And when they come out with a price tag finally I often tell: Well thats a nice salary for 20 hours per week work.

And guess what? I got 20 hours contracts this way 3 times.

jerguismi3• 12 years ago

Sounds nice, but I would make a big difference between being a contractor and an employee. Where I live, hiring contractors is much less risky (because of employment laws etc), therefore for contractors it is quite natural to pay more. I'm an employer myself.

eru9• 12 years ago

Of course you tell them what you want first. Why would you wait? You want to be setting the stage, and anchor any subsequent numbers.

jerguismi3• 12 years ago

Btw, I've heard exactly the opposite. That by giving a number first-hand, you can anchor the price point, and therefore gain an edge. What about giving them a number, what kind of salary you would except, instead of giving the number how much you earn now?

bengali32• 12 years ago

yes, its commonly only recommended to offer first IF you expect their offer to be WAY off from yours or expect them to significantly lowball you. ie set the negotiations into a range, and make them the bad guys for revealing they had:

a. a lower opinion of what you're abilities are worth

b. lower expectations for what you'd be delivering

c. lower value of the position they need filled

lllllll• 12 years ago

it means you've done at least a little research on what they should be expected to pay and you see somewhere around that range as acceptable. You don't have to tell them that you've researched their rates and find them acceptable

If you find your research is repeatedly off the mark, find better sources.

I'd be very much interested in what are you sources/methodology to carry out this research. I mean, if the company you are applying to is big and well-known ( and listed in glassdoor, angel list, etc), I may have a chance to figure out the rates. However even in the case of known companies, I often cannot find the salary information and instead I'm left with the classic competitive pay/salary/compensation.

Finding out these rates for each company is even harder if you want to be hired as a contractor.

feedjoelpie2• 12 years ago

From the hirer side, maybe this is unreasonable given "No matter what, don't give them a number," but my past experiences on the other side of the table lead me to try and press a different dynamic. I try to get us and applicants talking salary during the first interview, before we even know if we fit each other at all.

The rationale is:

A) If how much money you want from us isn't even an option, we don't waste your time. We can be very up-front about that before a lengthy interview process proceeds.

B) We can judge your follow-up interview (generally a full-day paid tryout) against how much you expect to be paid. Which on the negative side lets us weed out expensive mediocrity, or on the positive side, give opportunities to people who aren't quite there yet but wouldn't cost much to take a chance on and try to train up.

A few people definitely look at it with suspicion, but in general I think it's worked out better for everyone.

Also, as an aside, I would take issue with what you said about researching what a company pays. For so many companies (mostly small ones), all you can do is ask around and find a current or former employee who is willing to tell you. And that is so often, for most applicants, not an opportunity you get. I think you're making that research sound much easier than it actually is.

jrjarrett• 12 years ago

So as a recruiter, why not just state the salary range for the position, if that's fixed?

Then if the amount of money I want from you as a potential employee isn't an option, I won't waste both of our times in applying.

rmc4• 12 years ago

If you want applications to talk salary from the start, do you also hold yourself to that theory and mention salary range on the job application/first phone call?

Or do you only want the employee to give up information?

logfromblammo5• 12 years ago

I have three times been denied the opportunity to interview because I refused to give away my bargaining power in this fashion.

If a company won't interview you until after you say a number, you don't want to work for them. Really, you don't. They are literally making their first interaction with you a dominance game designed to decrease your compensation. How do you think that will pan out for you two years down the road?

jghn2• 12 years ago

While I don't normally believe in lying during a hiring process, a former boss once told me that the right way to answer the "how much do you make?" question is to say you're currently making what you want them to pay you, figuring that they'll tack a bit more on top of that.

I haven't decided if I'm open to lying like that or not, but I liked it.

johnward7• 12 years ago

Being honest usually doesn't get you very far in a job search. It's sad but true. I've found stating that I have a BS when I don't at least gets me passed the auto filters. Then it's usually not as big of a deal once I talk to a person and they see my experience and I mention I don't have a 4 year degree.

rmc4• 12 years ago

One problem with that is that if they can see your tax details, they will know what you were on. If they catch you lying in the interview you could be fired. So if you ever piss off your boss, or they don't like you, they can let you go immediatly.

In countries that aren't the USA, and don't have that "at-will" crap, giving up all the legal employment rights is a bad move to make.

rmc4• 12 years ago

I used to trick of pretending that I was contractially forbidden (by my current employers) to talk about my salary.

galfarragem• 12 years ago

Technology people are without a doubt the most inept group when it comes to negotiating for compensation.

I would rephrase it as:

People that love what they do are without a doubt the most inept group when it comes to negotiating for compensation.

I think it doesn't matter if you are from IT, an architect or any other job. If you really like what you do, you don't mind to do it for minimal money and business people will exploit that weakness. For example, in architectural field, relevant architects are sometimes invited to be guest teachers in colleges. Once one said during his class:

If they discover that I like to come here, they will stop paying me.

nadam• 12 years ago

"the first is that they usually actually like their jobs. As long as they get to work with the cool tech and the neat toys, they’ll sleep under their desks if they have to."

I have never seen anyone like that who for example have a family... Only very young and very naive people do this; maybe there are lots of them, but I don't think they are the majority.

"our average programmer approaches salary negotiations like this: (1) I need ‘x’ to survive. (2) It would be nice to save a bit. (3) I need to pay my taxes."

That seems to be a strawman. I mean some very young and very naive programmers would do that, but all my programmer friends do this:

(1) I am a fairly good C++ developer. (2) I ask all my fairly good C++ programmer friends how much they are paid in the country where I live. I also ask them which are the companies which pay wel, so that I will apply to those. (3) I try to ask for the upper part of that range, at the companies I have heard pay well. I try multiple companies.

And basically that's what you can do. Bigger companies are mostly looking for replacable people. They mostly need 'good C++ programmers'/'good enterprise java developers'/'good web developers' etc... and will train you in their special systems. They will not care about your reasoning about how much business value you bring to their company: First that is so hard to measure that you cannot measure that, second they just do dozens of interviews with other people, and will simply hire other people if you want bigger pay than the realistic market range.

When you are a big gun or a specialist with some very unique skills, or when you are talking to a smaller company who have no established policy on developer salaries than there is more to it. But for most people at most companies: You just have to know the typical salary 'your kind' can get, and you have to ask for that, and that is all to it.

Programmers are mostly a commodity, but a quite well paid commodity at most companies. Which means that you can get a quite good salary without having extremely good negotiation skills (just using the heuristic I described), but you cannot get much more whatever negotiation skills you have.

Salary negotiations for techies (2011)

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