>> Most important takeaway about salary negotiation, by the way: disclosing a previous salary is almost always against your interests because it pegs your new salary to that plus 5% rather than your value to the new firm minus a discount, which is a brutal mistake
I had a phone screen with an HR drone once (Cerner Inc. to be exact \waves) part way thru she asked me my current salary. I declined to provide that information. She replied "we can't continue without that information". I replied, I'm sorry, but I won't discuss salary at this point. She said, "good bye" and that was all. I had a job so was not desperate at the time. I was still shocked at how abrupt it was.
1) recently, I had very good success with a professional social networking site in this matter. Recruiter asked what my current salary details are. I told me, "If I give you this information, what information will you give me". Initially he asked me to look in glassdoor but when I said he can also do the same thing, he relented and disclosed that salary for senior software engineer is minimum of $150k going to a maximum of $190k. I was happy with that information.
Also, I discovered recently that companies cannot talk to one another about salaries, but they can all participate in a "survey" where the surveyor aggregates all this information, in a very detailed way. So, every company knows exactly what the other company is paying, even in a different industry. I guess that is another way of fixing price.
Crazy. I'd definitely send a quick note to someone higher up if you can get a hold of him/her. I know, not worth the time, a hassle etc. But a typical CEO worth his salt will crush something silly like that in no-time, if you really want to hire good people this is the type of person you want to fire.
I mean, hell, asking the question is one thing. I can live with that. But turning that into some kind of litmus test where declining to share private information completely 100% immediately disqualifies you, that's insane.
Anyway, never experienced it. Question for you all, are there any negatives to bluffing?
i.e. say you said your previous salary was $110k while it was really $90k, will HR say 'you're overqualified' or something to that extent if they were hoping to pay you say $90k and had a max of $100k in mind?
As in, can you recover from that and say 'oh but $100k is fine, too', or would that also send a signal of weakness where they won't hire you because you seem desperate (taking a $10k cut from their perspective, when you actually get a $10k raise)? Ugh the mindgames! haha. Would love to hear your experiences on this issue.
>> But a typical CEO worth his salt will crush something silly like that in no-time, if you really want to hire good people this is the type of person you want to fire
That is actually not true. This kind of employee low balling is condoned behavior.
I applied for a position at Automattic and had Matt Mullenweg (CEO) pull this on me.
Everything seemed to have gone perfectly well - everyone involved in the process seemed impressed with my abilities but when it came to this point and I declined I was told "I seem to be senstive about being Indian" out of nowhere. I don't know where that came from.
First, I'm sorry that at some point in your hiring process you got that impression, it is not in line with our philosophy or our actions. We now employ 320 people in 36 countries and with at least that many distinct racial or ethnic backgrounds, including Indian. We aim to hire another 120 in the next year so disqualifying potential candidates based on something they are born with is not just morally odious, it's logically flawed and not something I would tolerate in our organization. (We even help host events like http://accelerate.lgbt/ .)
This is also why we have a distributed model -- we wanted to create a company that where someone chooses to live is not a barrier to them doing great work at Automattic.
The words you put in quotes don't look like something I'd say, and also unusual for my interactions with potential candidates in our hiring process (which is described here - https://hbr.org/2014/04/the-ceo-of-automattic-on-holding-aud... ), if you're willing to share the date when we chatted or any other info I'd love to review my transcripts and understand the context if that was an actual quote, or if it's not I'd like to see what I said that gave you that impression it was a mistake on my part and I want to avoid giving that impression again in the future.
To summarize: Automattic wants to employ people of all backgrounds and regardless of their geography, and I personally believe there is no connection between a person's background, Indian or otherwise, and their ability to be an amazing Automattician.
I wouldn't stop it -- I'd want to talk about it to understand why. If it was because they were following advice they read somewhere because worried it would influence their offer, I'd try to dispel that myth within the context of Automattic. If they didn't believe me, we probably don't have the level of trust needed to work well together.
Our culture is really built on two-way trust: since we're distributed and seldom see each other you don't know how someone is going about their work, and most of our HR policies come down to the honor system. The company places an incredibly amount of trust in employees, and vice versa people place a great amount of trust in the company, including that we'll do our best to treat them fairly. It's a responsibility the folks on the operations side of Automattic, including myself, take very seriously.
> If it was because they were following advice they read
> somewhere because worried it would influence their offer,
> I'd try to dispel that myth within the context of
> Automattic.
If knowledge of a candidate's previous salary doesn't influence your offer, why do you ask for it and what do you do with it?
I agree it can be uncomfortable for people, as is almost everything around compensation. I don't think we're entitled to know, but it is an expression of trust when someone shares it, and thus far with ~99% of people we've hired over 10 years it hasn't been an issue.
Why should people express trust in you by deliberately sacrificing information relevant to their own interests before you've proven yourself trustworthy?
Well actually, one usually builds trust by giving it in small pieces, showing that you're willing and able to develop a relationship with the other person. But the key word there is small: you don't place yourself at a large disadvantage until the other person has shown themselves to be trustworthy in previous instances where less was at stake.
>> I was told "I seem to be senstive about being Indian" out of nowhere.
Jesus. It's amazing to think someone who's worked so long in the tech industry can think like this. If anything, we're the ones who should know best how little race means when you have the skills to get the job done.
True, and if this story is true, it also surprises me in a nasty way because
a) I am Indian, and until now had largely thought that we were largely a privileged class within tech, if not outside it -- and consequently weren't affected by race issues within it.
b) All of the articles about how oh-so-wonderfully Automattic does their remote work had always led me to believe they were a forward-thinking, "good" company. If they are bringing up race in an interview it completely destroys this perception.
> I was told "I seem to be senstive about being Indian" out of nowhere
In a climate where most companies are afraid to disclose quite reasonable reasons for not making a hire, it's remarkable that someone would think this kind of comment is appropriate.
Been thinking about this more and the only possible context I could imagine, related to the original post, could be around salary.
We base compensation on market data, value to the company, and what other people in a similar role make, we also ask what people made in the past and where they hope to be in the future. This does not determine their salary, it's market data for us, and the future part also makes sure that Automattic is a place that can meet their long-term goals and expectations, or if not that's discussed up front.
I've had this conversation about 400 times at this point, while people can sometimes be sensitive around compensation, it's like discussing a health issue with your doctor -- I've seen and heard it all and it's part of a normal days work for me. It's sometimes the source of a nice surprise, as we've had people who've doubled or trebled their salary when joining Automattic which always brightens my day. We've also had people take a small or substantial cut when joining, which isn't ideal, but we determine salaries as I said above, not based on what they say they previously made, and it's good information for the company to have because hopefully one day as our business or their contribution to it grows it'd be great to have them at or above what the market said they could make someplace else. I can only think of only once someone has not joined because of compensation, an engineer at Yahoo who had compensation 3-4x beyond what seemed fair in the market commensurate with his skills or experience.
The OP advice of not saying salary might be appropriate at other companies, I'm not privy to their compensation practices, but it is not correct at Automattic. A few folks in this thread suggested lying, which I would disagree with in any circumstance, much better not to answer -- lying in response to a factual question demonstrates low integrity and most employers, including us, would not want to work with that person.
Automattic is one of too few companies that tries to treat people who live in different countries the same, which is an important distinction from treating people who are from different countries and now live and work in the US the same, which of course every company is legally required to do (though there are still some serious issues around pay equality and even gender, to start). Many companies explicitly try to have offices and hire people in countries where the cost of living and wages are lower to save money; our thought is that the internet makes that obsolete and over time enlightened companies will pay people what they're worth regardless of where they live.
There have been about 5 times someone hasn't wanted to share, every time because they think making a low amount in the past (at a non-profit, in a country where wages are low) will lower their offer, which it doesn't and I try to re-assure. One case comes to mind in 2012 of someone who had attended Stanford but moved back to India because didn't have a visa, and was worried their geography would mean they were paid less, in which case I would have said to not worry about the fact that you're in India because that doesn't matter to Automattic -- if I gave the impression that it mattered whether you were Indian (or any other background) I apologize. We did end up hiring this person and at a similar salary to someone in the Bay Area doing a similar role, though there were some complications with them wanting to be paid to a US bank account, in USD (we try to pay people in the currency of where they live so they're sheltered from forex shifts), and travel to work in the US, which our attorneys advised us would create issues in absence of a work visa, which the person didn't have. They ended up only being with the company 9 months, the last few on a performance plan, but that was based on work after they had joined, not anything to do with the interview or compensation process, just sometimes there isn't a mutual fit. (Over the past 10 years we've had about 60 people be let go or leave, it's definitely not personal.)
Not sure if that was the same person as nodelessness, but if so I feel very bad you thought any of that had to do with you being Indian, and I'm happy to chat or discuss more to clear it up. I also hope the information and context above helps any one who is considering working at Automattic know that we'll do our darndest to create a comfortable and fair environment for everyone.
I've read both of these comments, and I really struggle to see how both of the following can be true:
1. As a hiring manager, knowing your previous salary will not impact my decision on your value.
2. As a hiring manager, I insist on knowing your previous salary. If you do not want to discuss it, you must not trust us.
I'm going to assume matt is lying unless he will release comp data for his offers vs what the candidates' reported salaries. he is on here doing 100% damage control.
In the original post Patrick already touched on the Japan case, but one thing I'd add is that one of the pieces of paperwork you must hand to your new employer is your final tax slip from your previous employer showing how much tax you have paid in the current year. From there it's trivial to calculate your previous salary.
There are ways around it but it seems most people go with "my base was XX.... and that's one of the reasons I'm out there looking to change jobs."
"...one of the pieces of paperwork you must hand to your new employer is your final tax slip from your previous employer showing how much tax you have paid in the current year..."
Are you referring to Japan?
I've worked in two states in the USA and never been required to produce such documentation.
I've always had to do that in the UK. Your previous employer gives you a form called a P45 when you leave that has information about your tax code and your earnings for the previous year.
The new employer just needs your details to identify you correctly with HMRC.
You can give them sufficient detail without handing over your P45 or income data. I have never given a P45 to a new employer and it has never been a problem.
It's possible that your tax code will reveal some information, if you're still in the same financial year, but this is an unreliable way of calculating salary.
Correct. A difference for the UK is that salary bands are often (not always) disclosed in an advertisement or told to a head hunter in advance. Not always, but enough that not doing so raises eyebrows and concerns about corporate ethics for me (and my friends).
The obvious caveat in this is that they could only estimate an average salary. You could state that your salary progresed rapidly during your previous employment, although they may not buy it.
> your final tax slip from your previous employer showing how much tax you have paid in the current year.
Do you mean in Japan or the US? Because you certainly don't have to do that in the US.
> From there it's trivial to calculate your previous salary.
And even if you did do it in the US it would be impossible to calculate your salary from it because it depends on how many exemptions you claimed in your W4 (which you can change at any time - it doesn't have to be how many children you have, it's basically a number to fine tune how much tax you pay so you don't overpay and need a refund).
IANAL, but I don't see why that would be illegal. There are very few things that it's actually illegal for an employer to ask about. (Though it would obviously be a bad idea to ask a candidate about their status in a protected class, it's not technically illegal to ask.)
That said, this is a bad idea because it would scare off plenty of people who aren't bluffing about their salary (like me). And there are already employers who will terminate you immediately if they discover you lied in your job application.
> There are very few things that it's actually illegal for an employer to ask about.
I guess it depends on your definition of "very few things" but this list[1] of Unlawful vs. Lawful questions seems pretty long/wide ranging. And I know that the small business I worked for violated it on a regular basis. I actually had it sent out to each person who does interviewing (since the company didn't have a formal policy on training someone for interviews) so they knew what was/wasn't acceptable.
Note: I'm not a lawyer so don't take this as legal advice.
My understanding is that it is illegal to use any of those things to discriminate against someone for purposes of hiring. It's not technically illegal to ask the question, but if you do, and you don't hire the person, have fun in court trying to prove that you didn't hire them for some other, valid, reason. So don't ask them, because there's no upside in it for you.
They can't legally ask for proof, no. Bluff away! (I'm not a lawyer and this does not constitute legal advice.)
I did a small bluff to try it out, just 5k above what I was making. The recruiter was surprisingly skeptical! I know I've done an good job of bumping up my salary in a short amount of time, but it was kind of off-putting to have him question it.
I'm a bootstrapped entrepreneur CEO with ~30 employees in my company now, growing quickly, expect to have ~60 in next 12 months.
I am not so interested in previous salary. Rather, I always directly ask "what is your salary requirement". I think it is good business sense to not underpay what people think they require, though sometimes this means we must pass on what could otherwise be good employees, so requesting moonshot salaries is definitely a filter for us.
Furthermore, when I ask applicants their requirement, if they just deliver a number to me using logic that does not include salary levels at previous jobs to justify, then I evaluate how close it is to my budget target for the position, and if feasible, I make an offer at that requested level.
However, if the applicant uses a previous salary to justify their current salary requirement, and it's a lot higher than I expected or had targeted for the position, I have on a few occasions offered jobs with compensation to match previous salaries, so long as applicant proves to my HR they are not lying about the salary.
So far, all offers I’ve made predicated on proving their salary claims, my HR has proven the applicants were lying to significant degree, except for one person. Those that were caught lying had job offers rescinded. The one person that wasn't lying only lasted 90 days because he clearly couldn’t add value to justify.
From my point of view, the best strategy for negotiating a higher salary is to get in front of a person that cares if you can help them make them more money than it costs to pay you, regardless of your previous salary (an HR manager is usually not the person that cares about this). Then present a clear vision to them for how you will deliver that added value.
If you are asking me to start a negotiation and I give too high a number for your tastes, that isn't my fault, it's your fault for not just offering what I'm worth to you. How am I supposed to know what you consider to be a moonshot?
Above a certain point, and most programming jobs are above that point, there is no fixed position with a fixed value. The right person in the right place can easily be worth 2x or more than originally anticipated for an opening. There's no way to predict that in advance, so at best the employer could give an ideal range and let candidates demonstrate their value if they want to exceed the range.
One of the things I've always tried to be aware of is how much value I add to a business. Dollar figures help most, but some places are wary of giving developers that knowledge, though it's usually not difficult to work out. This has helped guide my salary requests in a way that I hope is fair for all parties; rising tides lifting all boats, and that sort of thing.
Don't let their skepticism thrown you off. It is just another technique to low ball you.
In my own interviews going out of collage, I was told by peers about the offers they were making. I got asked what I was expecting to get by employers and told them around $80K because thats what my peers were getting and I consider myself to be on pretty equal ground with them and most companies scoffed at it. But then I got an offer of $95K and then they had to raise their own offers up to match. Its a ridiculous process to go through.
> They can't legally ask for proof, no. Bluff away!
Well, I am a lawyer, and this is also not legal advice.
To lie and accept a job offer whose salary is predicated on the lie would constitute fraud. Lying about your former compensation history is no different than lying about a prior criminal record, if the counterparty relies on the false assertion.
A very good point, but, and this gets a bit complex, they would have to prove that they relied upon on false information to decide to hire or pay you.
So Bob and Anna are equally qualified and currently paid 50k. They both apply for same job and Bob says he has a (fake) PhD and is paid 50k and anna does not lie about qualifications but says her base is 100k
Most of us would say Bob has committed an illegal act because the link between qualifications and hiring decision seems so clear. But there is a very weak link between previous salary and hiring decision, so how far must the company prove that it uses prior salary in hiring decisions? Just the fact that it asks? The fact it only offers prior plus 5%? That prior salary is used to rank CVs?
Unless current employer a) receives your permission to pull your tax return transcripts or b) receives your permission to contact your previous employer and you provide permission for previous employer to divulge said information, you will almost surely not be found out.
Disclaimer: Not a lawyer, not your lawyer, but fairly confident based on past experience with this over ~15 years.
You can triple-dog-dare an employer to fire you "with cause" from a role where you are performing well for lying about previous salary. This is a silly concern. It's just not going to happen.
This is what happened in my last negotiation, where $X was a 30%-ish raise. They didn't bat an eye, and made an offer of exactly $X. I asked them, "Could we make that $(X + .06*X) and they did.
I keep raising my rates 30% every time someone asks, mainly because I don't want to take on more work, but apparently people don't mind, so I keep getting more work... Oh, the humanity.
I suppose so? If I was a recruiter I wouldn't question what I thought was a 5k discrepancy. I was doing well though--- making 90k after 3 years of programming, and my bluff was 95k. I think that just the real salary alone would have been enough for him to raise suspicions.
Depends on the area, I guess. I don't think people would have blinked in SF or Boston at that.
Or he was screwing with you to try to drag down your ask. Happens pretty frequently, because their incentives don't align with yours (it's the realtor problem all over again).
While dealing with recruiters can be a hassle their goals align much more closely with ours if we are maintaining the fallacy that only the money counts. Recruiters are typically paid a percentage of your salary so they want you to receive the highest salary possible since that is the best payout for them as well.
My experience with recruiters is they want to know how little it will take for you to accept the job, but this is because they need to know which jobs they should do the legwork on.
If I'm looking for a job I call up several recruiters I trust and I tell them the specifics I'd what I'm looking for and the price I'm willing to accept. I then continue working my network and looking on my own, but now I have 4 times as many jobs and a better chance if finding the perfect fit.
> While dealing with recruiters can be a hassle their goals align much more closely with ours if we are maintaining the fallacy that only the money counts. Recruiters are typically paid a percentage of your salary so they want you to receive the highest salary possible since that is the best payout for them as well.
No, this isn't true, and this misconception is explicitly why I invoked the realtor problem. If the recruiter gets paid, say, 15%, the difference to the recruiter between $100K and $110K is $1500. To get $16,500 instead of $15,000, the recruiter risks extra days of negotiation in which the applicant may find another job, or one or both sides passing on each other because of lack of salary fit. In most cases, then, it is in the recruiter's best interest to pressure you to take the job at $100K. Most recruiters are out of the business in a couple years, only a few are in it for the long hall--since he's not going to work with you again, it's in his best interest to get the payout now. Over any length of time, they will make so much more money by you saying yes than you pushing for more money that it's stupid of them not to get you to take the first offer that comes down the pike.
A few recruiters, among them the best ones I've worked with, are in it for the long haul, and cultivate real relationships, but they are uncommon. I remain on good terms with them whenever I can--I've been on job interviews before where I was clearly sent to the wrong job and told the interviewer "look, you don't want me for this job and the recruiter just wasted your time and mine--go talk to this guy, he'll feed you candidates you can actually use." It's worth it, because what goes around comes around, but most are in-and-out and they act like it.
I think we are essentially in agreement here. I said that recruiters goals more closely align than realtors, but I need to clarify. While a realtor can represent us in either the purchase or sale I'm considering representation of a purchase. Here the realtor's goal is directly at odds. I want to purchase the house as cheaply as possible, but the realtor wants the largest commission so they want the price to remain as high as possible.
The recruiter wants the largest commission possible and I want the highest salary possible. Notice I said these "more closely align". You are right, it is not a perfect alignment. The recruiter would rather get some commission rather than none. If they are afraid you may take an offer on your own or from another recruiter they may try to get you to accept a lower offer. This is why I work with recruiters I trust and I establish clear non negotiable guidelines up front. "I am looking only for promotional level opportunities. My current salary is X; do not trouble me with positions unless the salary is paying a minimum of X + (X * .3)".
With this type of relationship we must establish clear guidelines. If we fail to stick to those guidelines then it is on us.
One wonders why the incentives aren't aligned. I.e. the value of the recruiter to the employer is finding a higher paying job, so the compensation should reflect that. E.g. 10% + 50% of the pay increase.
The value of the recruiter to the employee is that. The recruiter isn't being paid by the employee. You could consider an agency model, but honestly I don't think that's likely to actually work because of the temperament of the developers in question.
We regularly get requests for job title/tenure/salary verification forms from former employees. I'm not sure what our status on completing them is though, but there are at least some companies out there that go through the legwork to check up on something after a job offer.
If you have a corporate lawyer and/or experienced HR director, you do the same thing everyone does: inform the questioner of the individual's dates of employment and nothing else.
Only if that employee has the time and money to waste on the lawsuit, and has any evidence in hand to make it go. How is that employee supposed to discover this? By fraudulently pretending to be a prospective employer?
You certainly shouldn't share your salary, much less provide a W2, for most positions. However, not only is it not illegal to ask for a W2, for most sales positions it is the norm.
The reason is that sales people make most of their money on commissions in most places, and checking how much they made in commissions in previous years is the simplest way to figure out how effective they have been in past positions.
There is an altogether separate discussion about whether commission heavy compensation works better or not though.
Don't lie, respond with this: "I cannot disclose my current salary, but my desired salary is X." They just need a number. If they will not accept desired salary in place of current salary, you do not want to work there.
I have had several interviews where after I had passed all the technical screens that the company was simply unable to offer me what I was asking for after weeks of trying. I managed to find a list of what local area start-ups were paying for different roles and was shocked to find myself in the top 10% when I had taken multiple pay cuts within defense and was getting mediocre compensation compared to every Bay Area and NYC located company I had talked to.
I've talked to a number of folks with inside knowledge for a couple different regions and it's quite possible that they're simply not budgeted to pay for that role and they just can't politically negotiate that while meeting certain fiscal commitments. If I started a company right now and bootstrapped, I can't pay someone market rate at all and expect to be in business a year without taking outside funding, so that's just reality.
I get the impression that a lot of companies out there either don't have that mentality (thinking cheap is enough) or don't know how to actually do good hiring.
The good thing about this kind of reaction is that it helps you filter out that kind of company you wouldn't want to work for.
Regarding bluffing: I've seen it happen where the company has asked for a pay stub as part of the final paperwork to confirm that the stated current salary was legit. So yeah that could be a downside to bluffing if you want the job.
I've never heard of such a thing but it undoubtedly happens. Your pay stub is really just showing the floor though. For many positions, there are fairly regular bonuses, variable comp, etc. So, in reality, there's usually some wiggle room in providing current salary info while still being essentially truthful.
I've been recruiting engineers for almost 20 years, and I have probably had a dozen cases where a client asked for a pay stub around the time an offer is presented. It's obviously rare, and most of the time it was for high-ticket talent that seemed to be paid noticeably above market rate.
I have to say, I find that sorta weird. At that point, I would think if the pay stub didn't square with the claimed salary (and there was no convincing explanation for the difference), they'd almost have to not hire the person. And, if it did square, it's like they'd already decided the price tag was too rich for their blood.
Excellent points, and I'm not necessarily condoning the practice (I don't control that). It does seem they are trying to call a bluff where you either expose the bluffer or get locked in to a rate above market. I can't recall an instance where the stub was provided and the client didn't make a competitive offer, but my data set isn't large.
Maybe it's a "There must be a reason they value them so much" (even though we don't see it) sort of thing. Hardly an uncommon situation. Doesn't mean it worked out in the end :-)
You can get fired if they figure out you have been fudging the figures and 'lying' to them. I'm not sure how they would know, but if they do, it can create problems for you.
Error-level analysis of the Jpeg. As you say, if it comes out later that could have bad legal consequences - the term is 'detrimental reliance' and the dishonest person could conceivably face fraud charges. Even if not, it could easily become a a career-damaging topic of gossip.
Re: error analysis—it's a "picture of line-art" kind of document, isn't it? Not even a watermark. So: scan it at super high resolution, blow out the contrast, countour-vectorize it to SVG (effectively equivalent to recovering the original PDF), edit that, print the result, and then scan the print.
(It just occurred to me that if there was "an app for that" in this case, no parent would ever be able to trust their child's report card again.)
Don't even both with all of that.. Just make a reproduction from scratch.
Make it look more or less like the original. As long as nobody sees the original next to the mock-up, who's ever going to notice that one or two digits changed?
Question for you all, are there any negatives to bluffing?
In many countries the employer does the employees tax, and they will be able to see how much you earned in that calendar year. Being hired under false pretenses is fraud and means you could be legally fired at will at any later date.
People in the USA might be used to this (since this is very common), but in many places with actual employment law, this is a bad deal for the employee.
Of course, that's only if you lie to them. If you just don't tell them the salary, then they only find out after you are hired and hopefully have a nice proper salary.
Recruiter here. Some may not like this answer, but: honesty is the best policy. Bluffing, or LYING, could backfire - especially if things escalate and they eventually learn about this.
It's bullshit, especially for those who began their careers during a time of salary deflation.
However, the right employer will NOT base your future salary solely on your current. It should simply be one data point in the process - your value as an employee should be based on a multitude of factors. This isn't pie in the sky; many of my clients do have a compensation system for employees and end up paying fairly.
Sorry but I disagree. Nobody has ever asked me how much I currently make or I made at my last position. It is just not relevant. You make an offer. I might or might not take it. Asking me to reveal my current salary first is silly. If you insist on this information before the conversation can continue, then conversation is over.
They shouldn't ask the question much less demand an answer threatening to close communication if the demand is not met. If they do so, they are clearly not somewhere you want to work.
> Recruiter here. Some may not like this answer, but: honesty is the best policy. Bluffing, or LYING, could backfire - especially if things escalate and they eventually learn about this.
Hahahhaa, I like that you even all-capsed "lying". Give me a break.
I had a similar experience with a recruiter. I asked why and she couldn't come up with a compelling answer, she just said "That's just how it is, we need your salary." She escalated it to her manager and he pulled the same. I eventually complied but not without telling them I didn't ever receive a good reason and it makes zero sense and I couldn't see how it would do anything but hurt me.
Funny enough I ended up getting an offer way above my current salary, and a bit more than what I said I wanted.
Is anyone here a recruiter and can shed some light as to why the hell these people are so adamant about getting my salary??? I'm wondering if part of the deal for them is if they don't give my current salary to HR they won't get paid. That seems really stupid but they were acting like they would let me walk if I didn't tell them my salary.
Recruiting expert here! First off, a company "walking" without your salary information is a failure on their part, and their loss! However, to answer your question - I find the salary question to be a great indicator on many levels, here a few:
It's just one data point in determining whether you're a qualified candidate
1) Why would I waste the candidate or the client/employer's time if there's too large a gap between candidate's salary & their highest potential for this role? The company has a budget, candidate have a minimum; let's get this out of the way - it would be terrible if the interview process went swimmingly only to find that the candidate wouldn't budge under $125K and client wouldn't exceed $100K.
2. Finally: it's not a huge deal if candidate prefers NOT to provide salary; sure, it makes you feel a little uncomfortable. If that's the case: no worries, but then I do ask that the candidate gives me a 10% range for their current salary & expectations. Again, employer just wants to know that we're potentially on the same page before wasting time.
3. Literally 95% of my software engineering candidates have no qualms about sharing their salary. The other 4% will at least give me a small range. These candidates that challenge this minor issue end up being more trouble than they're worth in other ways too; it's a red flag. (next stop: "no, I'm not taking a coding test").
Again, there are ways around REQUIRING the salary #. It should not result in a candidate or employer walking. Oof!
I'm happy with your candor, at the same time you're displaying just about every trait that makes me loathe recruiters. It's refreshing to have this so out in the open, a bit like an SEO expert giving you the inside of his mind.
Someone's current salary is none of your business, it's that simple and as a block of reasonably intelligent professionals we could simply all agree to never supply that information to the company hiring.
Note that almost all of the risk at the time of a job change is already born by the employee, the employer using a recruiter is actively looking to dislodge employees elsewhere and has a few tools at his/her disposal to effect this.
Since recruiters are paid by the future employer they should be considered an extension of that employer and in no way are they to be taken to be independents or objective, their job is simply to dislodge you for the minimum amount required.
If you want to know that your employer and the candidate are on the same page then why don't you, the person initiating the contact disclose the range of salary offered plus or minus 10% so the prospective employee can decide whether or not you're on the same page? That's because you'd like to snag them for a little bit over what they are currently making, and you'd be happier if you could deliver a 'gem' well under the budget your employer has set aside. You might even get a bonus for that.
If 95% of your software engineering candidates have no qualms about sharing their salary then that is what should change if you continue to game the process by asking such questions. What a software engineer makes is their private information, and asking for it is just another means of price-fixing between employers.
And those candidates that challenge that requirement are not more trouble then they're worth, they are the only ones that apparently understand your game enough to not be easy marks and that is why you feel they are more trouble than they are worth because it isn't easy money.
Interesting response. Loathe recuiters? Let's take it easy on the echo chamber cliche here. Yeah, lots of bad apples out there, but ask any reasonable professional: a good recruiter is extremely valuable.
You did forget that there are 2 types of recruiters: agency (outside) and corporate (inside).
I, the agency recruiter, do not want to "dislodge" the candidate for the minimum amount required. Not because my fee will be higher with a greater salary, but because I'm actually incentivized to do what is best for both the employer & employee. This is called sales. When you do good by all parties to the transaction, it pays dividends long-term.
So, no, we're not trying to "snag" them. I appreciate your paranoia, as you're not alone; many people dealing with bad recruiters probably need to vent.
But for the most part, your perception of the recruiting industry is different from the reality.
You did not reply to @jacquesm 's post. If you want to make sure the salary expectations from the applicant and the employer, you only have to
1. tell the employee what salary range the employer is willing offer, or
2. ask the applicant for their desired salary level.
The current salary is NOT your business. If the applicant earns 1x salary now and wants 2x salary and decide to look for a new job that offers that, how does it help the applicant to tell the recruiter that he earns 1x in his current job? You basically ask the employee to play a cards game but have them all in the open for you.
"This is called sales".
Yeah, involving an engineer lacking any business skills and two weasels.
> Interesting response. Loathe recuiters? Let's take it easy on the echo chamber cliche here.
That's my personal opinion based on personal experience. Feel free to attribute it to others but the echo chamber does not factor in there unless you wish to consider my office part of the echo chamber.
> Yeah, lots of bad apples out there,
Present company, as always, excluded.
> but ask any reasonable professional: a good recruiter is extremely valuable.
A good recruiter is a good recruiter for their paymaster. I've yet to see 'reverse headhunting' where you submit your resume to a recruiter and they then go out to find the best possible position for you. So for now recruiters are exclusively working for companies looking to employ people.
> You did forget that there are 2 types of recruiters: agency (outside) and corporate (inside).
I've dealt with both, neither group to date has me particularly impressed. And I've dealt with them both as an employer and as someone who somehow made it onto the list of recruiters. Clueless wouldn't begin to describe them, they used to have a joke saying that 'those who can do, and those who can't teach', you could probably amend that with 'and those that can't teach recruit' and it wouldn't be too far off the mark.
> I, the agency recruiter, do not want to "dislodge" the candidate for the minimum amount required. Not because my fee will be higher with a greater salary, but because I'm actually incentivized to do what is best for both the employer & employee.
And what is that?
> This is called sales.
I don't particularly care about what you call it, to me it felt more like interacting with a class of buzz-word wielding vultures trying to make money from placing people based on an extremely limited understanding of what makes the tech world tick.
There are multiple ways to make money in any industry: you either dig for gold, you sell shovels to the miners or, in the case of the recruiters, you sell the miners to the mining company.
> When you do good by all parties to the transaction, it pays dividends long-term.
Yes, I'm sure it does. In the long term your loyalty has to lie with your repeat customer, the corporation that hires you. Since you are not going to get any repeat business from the individuals that you've placed (unless you're willing to risk that long term relationship, but there are plenty of other recruiters that will be more than happy to play the game again).
> So, no, we're not trying to "snag" them.
Said the fox to the chicken.
> I appreciate your paranoia, as you're not alone; many people dealing with bad recruiters probably need to vent.
So, many people dealing with bad recruiters on the one hand..
> But for the most part, your perception of the recruiting industry is different from the reality.
And yet my perception is different from reality. That's an interesting concept but I can't fit both of those into my head without significant cognitive dissonance.
Either my experiences match those of others and the venting has - as you apparently confirm - a basis in fact or my perception (and by extension that of all the others complaining about their experiences with recruiters) is wrong. You can't have it both ways.
And you conveniently forgot to address the main point I made and instead latched on to my 'perception issues'.
First, I already addressed the main salary point in my original post. I don't need to respond to every random who wants to poke holes. I will address a couple issues you brought up in your reply. Just like I don't presume I know more about software engineering than my candidates, I trust you'll defer to someone who knows recruiting.
--I've yet to see 'reverse headhunting' where you submit your resume to a recruiter and they then go out to find the best possible position for you.
Yeah, this exists - they're "agents" for software engineers (for example). But it's rare and not sustainable.
---In the long term your loyalty has to lie with your repeat customer, the corporation that hires you. Since you are not going to get any repeat business from the individuals that you've placed (unless you're willing to risk that long term relationship, but there are plenty of other recruiters that will be more than happy to play the game again).
You forgot one thing: reputation. If you do best by your client AND candidate, then your candidate sends your referrals, eventually comes to you when he/she becomes a hiring manager, etc.
---I don't particularly care about what you call it, to me it felt more like interacting with a class of buzz-word wielding vultures trying to make money from placing people based on an extremely limited understanding of what makes the tech world tick.
I've heard this before, usually from less level-headed software engineers. Like I said, sales is a different business - we do different things than you guys. I have repeatedly watched as techies have tried and failed to transition into recruiting. There is an extremely low correlation between tech savvy & recruiting success. Recruiting is a people business.
The underlying theme here, again, is that you're lumping every recruiter into your personal bad experiences - like I already said, some are good. That's not a valid approach in this situation.
You pretty clearly don't know to whom you were replying so your language ends up looking a little off. If you're going to come pick a fight in HN, you could probably make a better choice as to who to pick it with.
> 1) Why would I waste the candidate or the client/employer's time if there's too large a gap between candidate's salary & their highest potential for this role?
It's trivial to solve this problem for a recruiter by simply stating the company budget range upfront. The problem is that recruiters want the client to give up their information without revealing any of their. That is where the asymmetry of information come into play and engineers end up getting the short end of the negotiation.
It's a pretty strong signal that they want people who won't negotiate and aren't assertive. In some businesses, it's just counterproductive to hire an assertive employee: the business processes are in place, the command structure is well-established, and they just need bodies to fill places in the org chart. If it's one of those companies and you're one of those people, getting hired there will likely be painful for both of you.
It's not really a sign of anything. Most likely some director is A/B testing a strategy or they just want data. If they want salary give it to them and see what they have to say for 5 mins. Everybody knows it is a shitty move to put you on the spot like this. And they can't be just looking for stupid people to hire. If they are willing to take the risk to piss you off may be they will have the decency to make up for it later on.
Hmmm, but this was the recruiter, not the company. The recruiter itself would want me to be assertive and negotiate as their compensation is calculated based on my starting salary.
And this company was a very small and fast growing firm that would require a lot of hustle and assertiveness. My entire in person interview process was based on a case study that took 12 hours where I spent a large part of that arguing with my results/reasoning. So I don't think that holds.
In-house recruiter or independent recruiter? An in-house recruiter likely has their hands tied by company policy; if the company wants candidates who won't negotiate, the recruiters will not be permitted to negotiate, and will need to report back certain information like past salary. If it was an independent recruiter, that's a little weird, since presumably they have multiple clients. Maybe they need it for whatever matching software they use to search their available positions?
A recruiter's long-term compensation and viability is based upon repeat business. And they are working for the potential employer, not you. That is also the basis of the majority of their reputation with respect to getting contracts.
So... They are interested in providing candidates that are, in as many parameter's as possible, within the employer's range -- and towards the favorable end.
As to the ur-child-level idea that "good CEO's" will "clamp down" or whatever the term was on this practice...
"Good CEO's" generally have NO interest in tackling the details of HR policy except when they are quite visibly causing problems and/or a big, bold initiative sweeps them into its fold ("Mind the Gap", or whatever the flavor du jour is).
HR is a... well, in many ways and all the more bureaucratically so in larger firms, a nasty, detailed business. Endless quantities of compliance. "Fair" as a tool of constraint as often if not more so than enablement. Secrecy and emotions and politics, all needing to be whitewashed.
The kind of details CEO's don't want to micromanage, and that the smarter ones know to stay away from -- or at least, at arm's length.
There are individual exceptions -- some brave. But looking across the landscape of business, I don't think is there is any great movement to buck HR and attendant policy. It is a bureaucracy now well rooted in and growing from a depth and maze of regulation and law. Not all of which is bad -- worker safety and y and z and... have been much needed.
But the recruiting shop might get paid $100 an hour for your services so if you only demand $60 instead of $75 then they, the recruiter or recruiting company, pockets that extra $15 per hour. It all depends how the recruiter/recruiting company is getting compensated.
That sounds an awful lot like many healthcare IT behemoth. They mostly need bodies to bill them out by the hour keeping seat warms, conference line/room busy and to act as a buffer.
Exactly. One way to deflect the question is by saying that you're not about to provide any non-public information about an employer to anyone outside that company, and that includes specific details about their pay structure.
You can also note that while this may not be the answer the interviewer is looking for, it does represent the kind of discretion that the company is likely to appreciate in the event that you do take a job with them, then eventually go elsewhere.
If pressed, you can say your current pay is "unsatisfactory", and let them know that's what they can list on their form. You can add that you know the company has a range, that they're in the market for the skills you have, and that you're unhappy enough with your present number and long-term prospects to hear their offer.
All this should send a pretty strong signal that, pay aside, you're not in any immediate hurry to leave your current position, so trying to chisel you down to something close to your current number is just a waste of everybody's time. It also signals that lowballing you now means you'll probably move on sooner rather than later, which is something most HR departments prefer to avoid.
If pressed further - after all that - see the question for the red flag it is. This is probably not a company that has much interest in supporting your growth or professional development. Unless you're desperate (i.e., going nowhere is a better alternative than crashing hard) keep looking.
You can end the conversation on a positive note by saying you do understand policy, that you wouldn't be there if you didn't think the company had a lot going for it, and that they know where to reach you. If they can just find a way to keep you from having to compromise the privacy of your existing employer, you'd consider jumping ship.
If this doesn't produce a callback and you happen have friends who are already there and who want to see you hired, you can share the details of this exchange with them, and let them know why you ended the conversation with HR. Chances are, they'll be pissed. If they want you badly enough, and have the clout to pull rank, they can be sure that HR finds a way to accept your silence regarding your current pay.
> saying that you're not about to provide any non-public information about an employer to anyone outside that company, and that includes details about their pay structure.
I really like this advice! Thanks for the tip. I'm stuck being [possibly...] underpaid at the moment and struggling with how to address my current salary without tanking future offers.
Hope this helps. Good luck. And one more thought: even though companies have pay ranges for each position, they're not about to disclose that directly, for obvious reasons. Instead, the person negotiating on their behalf will size you up, and pick a number from the bottom or the top of the range accordingly.
Assuming your deflection doesn't end the conversation, the fact that you can hold your ground calmly and polity, yet firmly and clearly will probably cause the rep. to opt for the high end.
I head up recruiting at the company I work for. The biggest reason I ask this is that I'm worried a candidate's expectations are outside of what our budget is. There really is no other legitimate reason to ask in my opinion. Having said that, I'm always happy to share a range (depending on experience level and how the interview process goes of course). What I don't understand is that most startups do put ranges on AngelList these days, so I'm confused as to why there's so much of a cat and mouse game. I'm running an experiment right now to simply be transparent about our ranges, even in initial reachouts. I'm curious what the data suggests in terms of my response rates and ultimately hires made...
Still, what you really need is the candidates expected/required compensation, not their current compensation?
Ther are jobs I'd take at half my current salary, and jobs I wouldn't take at 3 times my current salary. In an interview situation I'm happy to provide a ballpark figure as to not waste time, but I won't provide my last salary (my tax details are public!), and I won't negotiatiate salary until I have a good bargaining position.
Recruiters on LinkedIn message me all the time. I come back with, "unless your client is looking to pay {double my current annual income is} + {25% bonus} I'm really not able to make that kind of transition in my life" (I would act as if that was my base)
Didn't work a few times, which I was fine with as I didn't want to jump ship. I really just wanted to get off their list. Then, a few contacted me again a month later saying how they found me the perfect fit.
LOL, of course it works. why wouldn't it? someone asks you a question, you give them an answer. to me all of this buffoonery around hiding your salary requirements sounds ridiculous.
i'm a startup co-founder, i hire all the time.
if i asked someone what their salary requirements are and they said 200k or 300k i'd immediately interview them to see if they're worth that much. i would take it as a personal challenge to see if i could stump them, and if i couldn't, i'd start negotiating their salary on the spot.
some people get paid MILLIONS OF DOLLARS! how the hell d'ya you think they got that much? they asked for it!
people who don't want to "reveal" their salary requirements like it's some big huge secret have probably never hired anyone in their life.
There's an important distinction here though. This isn't a discussion about disclosing salary requirements, it's a discussion about disclosing previous salary, presumably so the company can make you an offer only marginally better than that. That's a big problem if you're already underpaid.
So you refuse the offer! I've been in the position where I was underpaid to the point where the next job almost doubled my salary. When asked, I told them what I had been making and what I expected to make.
They hired me. I would have refused any offer less than I was asking for. Lesson learned: if they want you they will pay at least market rate.
I also "negotiated" (negotiated, hell. I just asked for it) a raise well above what they offered a year later at my first review.
huh? what distinction? who says you have to tell them the truth? obviously if you make 40k you're not going to be competent enough to jump to 200k, but if you were making 150k and ask for 200k, just tell them you were making 190 before. who cares?
when it comes to this kind of topic on HN, sometimes i feel like i'm taking crazy pills.
If you want $200k but are making $150, just say you are looking for a salary around $200k. If they ask again how much you make presently, you can say "I negotiated my present salary years ago, it's not relevant to the value I provide now, I'm sure you understand".
I'm not going to be pushed into lying and making things up out of expediency. YMMV.
i engage people with my own self expectations in mind. i believe that's what makes me an effective leader. i could be wrong.
i have not, and i would never in a million years ask someone what they currently make. why would i ever do that? what's the point? you might as well ask them about the size of their genitalia.
the range of bullshit answers you will receive, even from the lowest level of positions, just means you're only fooling yourself if you ask these kinds of questions. just ask for what they want. lying about that won't benefit them, it will only benefit me.
I really do agree with you. But somewhere in my late 20's I made the conscious decision to acquit myself with honesty as much as I possibly can. If you find the question so outlandish why not just say "I'm sorry, I don't find that question appropriate."?
The reason you're a co-founder is because you take risks and are willing to push the limits of what's socially acceptable, and have face-to-face discussions about personally-difficult topics.
Most engineers want to "stay within the rules", which is why they get walked on.
(I'm not for one second saying you do that, personally)
They may not be getting paid that much because they can answer your "stumpers." You might be better served by using the interview to find out why they add so much value instead of trying to prove that you're superior in some way.
uh, well, my stumpers include, "why should we pay you 200 grand?" which should naturally flow into a conversation into the amount of value this particular engineer or executive will bring to my organization.
here's another one: "how will you pay for yourself in 6 months?"
i'm no longer technically competent enough to stump an extremely talented engineer on a technical question. not really sure where you get the 'superiority' language, since i would be out of business if i didn't hire employees who were 'superior' to me.
again - sometimes i feel like i'm taking crazy pills around here.
There's a lot of context that made me assume you were talking about stumping them on technical questions. This is Hacker News and the topic of how to do technical interviews is a frequent focus.
yeah. when i hire sales guys, or product guys, they just tell me how much money they generated (or their products or teams generated) at previous companies. it doesn't always have to be a $ figure. sometimes it's, "my work at previous company X was used by Huge Company A, Huge Company B, Internal Division C, etc. here are my references."
these are just nuts-and-bolts dollars-and-cents conversations people have when hiring non-engineering professionals or executives.
you can talk about all of the above without actually stating how much money you made. it's moot. it's irrelevant. what matters is what they accomplished, if they are enthusiastic about doing the same for our startup, and how much money/compensation they need to feel good about it. i am trying to make people feel good about working for me! the first step is to have an honest conversation about everyone's needs (maybe requirements is a better word).
> Don't stop until you've got a sheepish grin on your face.
When you hit "sheepish grin"...go up another two steps. Then practice saying it with a straight face. This is probably closer to your actual market value.
We're fortunate enough to be in an industry where it's rare to be really desperate for a job, so I've come to take this kind of thing as a very strong indication that it's the kind of place that would really suck to work at in any case. From that point of view, the earlier all the BS floats to the surface, the better, so you can get on with looking for a good job.
> where it's rare to be really desperate for a job
My personal experience tells me there are plenty of people desperate for a job, and that is likely why these HR drones can still do this.
I have become so disillusioned even talking to these kinds of people because they refuse to consider talented people when its staring them in the face.
Yeah except sometimes good engineering teams sit behind ugly HR practices, and hiring processes unfortunately expose you to HR far more than the actual job does.
The world is full of people doing good and interesting stuff without having all kinds of lame bureaucracy. I'm more than willing to bear the risk of missing out on something interesting by passing on that kind of company.
I don't think level of HR bureaucracy is very well correlated with anything relating to job satisfaction, and it is easy to over-index on during the hiring process. I don't think your willingness to bear the risk of false negatives is unreasonable at all, but it's worth being aware that you're judging one department based on interactions with a completely different one.
If a company has ugly HR practices, you can be sure you will not be the only good person who is balking at the company.
If you HR put you off, you're not the only one. Externally they will find it more difficult to hire, and internally the real talent will start to notice.
Therefore, you don't need to worry about it. There are other places you can work with good people.
The funniest one I ever had: Going from my wife's startup to Google.
> What is your current salary?
> I make minimum wage, plus founder equity current valued at $X Million over the next few years.
I soon made it clear to the recruiter (who was very nice and understanding, btw) that previous compensation comprised of intentionally-minuscule salary and startup equity with funny-money valuations would not be a good proxy for my value-add. Worked out fine.
I learned my lesson about this once. I accepted an offer at a company who wanted 10 years of my salary history.
10 years.
So I provided it to them, and one of the companies (who was out of business) could not verify my salary (Pay stubs were not enough, they had to talk to someone).
After this they said they may have "adjust the offer accordingly" and it would most certainly be less because the offer was based on my stated salary at the time.
As most of you are probably guessing, I declined their offer and withdrew myself. Ever since then when they ask my current salary, I don't give it to them.
I would think that at this point they _are_ interested in bringing you on. Then you could go in different directions:
"I'll be glad to discuss my salary requirements at the appropriate time, would you please tell me first how badly do you need me? more about ... say work-life balance, employee rotation, non-monetary perks, whatever...
"Let me tell you about how much more value I bring to my work, many times over salary, which I am ready to do for you, because your great company really prizes the beneficial effect I'll bring to the bottom line."
So you're answering, things they want to hear, not exactly what they asked, but better, for you and for them.
I should listen to myself now. (Edited formatting, structure)
None of that actually works. I'm not sure why you think it does but the HR "drone" that acts as a Gatekeeper requires a dollar figure to put into the box or they punt you, like the comment you are replying to says.
It doesn't happen often [at least for me] but it does happen. I have similar issues when I decline to put an "Education" section on my resume. Both are groups I'd prefer to avoid, personally, but you do need to recognize there is a certain percentage of people that won't work with due to their process.
I find that quote interesting as well. Would anyone actually leave their job for $5k? Unless you hate your current job or the new job is more intellectually stimulating/better culture, that's a pretty paltry amount to take the risk of leaving your current role. Especially considering if you leave and don't like it you may have to stay in a role you don't like for a couple years to avoid looking like a job hopper. I make well under $100k and wouldn't leave my company for $5k unless the work is significantly more interesting. I work in finance so perhaps engineering is different.
I originally wasn't really very against these kinds of questions, until someone pointed out that they're basically asking how much a different company values different work you're doing for different ends, to help them determine how desperate you are for doing their totally unrelated work. I got much more resistant after that.
Imbalance of power fuelled by a recession = more inappropriate/rude/immoral behaviour to take advantage of the situation.
They know they can say "tell us your previous salary, or else". What's worse is that they will ask your references to confirm, and they'll likely happily tell them. If you lied, it won't go down well.
As if there wasn't enough crap to fight against in your career.. ugh.
EDIT: I forgot about employment contracts that prohibit you from disclosing your previous salary. Yes, they exist.
I had a recruiter tell me I was legally obligated to tell him my current salary. I said no thanks, not interested and he proceeded to attempt to keep me on the phone for another 10 minutes (after which I hung up).
Needless to say, I don't waste my time any longer when a recruiter asks. I just say "here's what I expect".
Legally obligated, wow, never heard that one before! Good answer. When I'm talking to a reasonable candidate, that's all I need at the end of the day: an expectation $ range.
I'm not really surprised, because, well, whatever people do just ceases to surprise at some point, but I guess it's quite likely that there's something in my contract (and I guess it's quite typical, so the same could be assumed about yours) that legally disallows me to disclose whatever there is to disclose about my relations with my current employer, including my salary. Of course, it doesn't stop me from actually doing so, because, well, the inequality of market knowledge between your typical employer and your typical employee just really isn't fair when it comes to discussing your remuneration. But sure as hell I'd remember of that NDA thing when asked of something like this by an HR, and would try to sound as shocked by the assumption I can disclose something like this, as possible.
I've had recruiters do this (Explore LTD in London).
The 'data collector' asked me my current salary and I refused to state it. She became very hostile saying "How are we meant to negotiate for you if you won't disclose what salary you are on?". I told her to let me negotiate my own salary.
Similar experience in other places but I replied "We are a little early in the interview phase to talk about this, lets come back to it later".
This worked until I reached the last phase of the interview, the salary discussion. The HR person simply refused to proceed further without the current salary information, as a matter of fact when I told them they should be paying what I'm worth, he said they can't proceed without it any cost. I wasn't interested in the Job so I didn't care, but they seem to count on the fact that given so many programmers out there they it wouldn't matter to them if they would lose a candidate even that late in the interview phase.
In short if there are many devs out there looking for a job, there will always be some one willing to work for a lesser pay.
I've heard of recruiters doing this with the sole purpose of discovering what their competitors are paying. Depending on how far along in the hiring process you were, it may be that she actually had no interest in hiring you but was simply polling for salary information.
Many times asking for your salary isn't a nefarious negotiating tactic - it's just to make sure both parties are in the same ballpark. If you're already at $110K and the opening tops out at $80K, there's no reason to waste either party's time.
If that is the real reason, there is nothing keeping them from disclosing the salary range for the position. That way they don't waste anyone's time...
Recruiter here. Good question. In the majority of cases, I would say your approach would be just as effective. However, I prefer asking because:
1) It's about gaining intelligence - not in a nefarious way. If enough candidates at the right experience level are giving me a range of $90K - $100K and the client still won't budge beyond looking at candidates in the $60K - $80K range, I can eventually come back to them and say "Listen: of the last 10 candidates you liked, their salaries were..." A smart, reasonable client will make adjustments.
2) In rare cases: a "rockstar" candidate may be able to get 10% more than the budgeted amount, for example. So I would hate to send you that $80K tops message if there were potential for a perfect match. Then suddenly you're no longer interested and we missed a grand opportunity.
Again, I agree with you for the most part. But ultimately, the recruiter figures: 99% of candidates give their salary number or a tight range, upfront, without issue, so there's no harm in asking for reasons 1 and 2.
None of this makes perfect sense, and reads like just-so stories. On 1), you could just as easily say "of the 10 candidates you liked, 8 of them were still interested given the salary bracket." For 2), you could say "the job pays $X-Y, with flexibility on the top end if they really want you."
It's interesting ("gaining intelligence") to read an account of recruiter allegiances, though.
You made the right call, I think, unless there was some way to get what you were looking for by either answering the question with a lie, or otherwise evading it. Sometimes, people press you for info because they need to have it on paper that they tried. It's possible you could have just made up a number, and the HR drone just needed something to write on the paper. But anyway, yeah, answering that question honestly is for suckers.
For my internship, I got asked on the phone how much the others were offering me. I first asked "if I tell you, will you lower your offer?". It got my interviewer a pretty good laugh and he told me that he wasn't that malicious. I told him what he wanted to hear and I think I got a fair offer anyway (which was like more than twice the best offer I had).
I am curious though, what were you protecting by declining to tell them? You could just make up an exorbitant number for one. I understand not talking about money with our friends, it's bad social signaling, but a recruiter is a different thing.
The flipside is that you give them a number and get a good idea if they are going to be able to compete, and if not, you don't waste any more of your time.
Most of the time (in my experience) the recruiters know how much the companies are willing to pay and will tell you a range. Or you can tell them what range you're targeting. There really isn't any real upside to giving your salary away.
I a have had similar experience for a well known uk agency - I effectively fired them and of course If I should ever need to interview any of their candidates the cv's are going in the bin unread
I wrote a small application a while back to allow a team to figure out what their average salary was without exposing individual salaries. Seems relevant.
It generates unique URLS for each participant and stores almost nothing on the server. Only a party that was actively monitoring web traffic has enough information to divine someone's salary. No tracking of emails, salaries, etc.
Very cool. This looks like a solid answer to a simple question that many people would like answered. Now if only I could think up good side projects like this to do. : )
I always appreciate your transparency and believe that you're helping drive our industry forward. I often search for ideas on how to help within my area of influence. The closest I've found is Stack Exchange's salary matrix, and the related approach at Fog Creek.
I think publishing salaries has several benefits. For one thing, it removes the used car salesman approach to hiring. One result, which is more important, is that it can help eliminate wage disparity due to differences of gender or level of negotiating skills. It can also help prevent the corrosive effects that can occur if people do find out actual numbers (the morale-sapping that you discuss).
The problem with this approach, and one I'm trying to figure out is, what about the non-developer jobs? Assumedly, each group gets their own matrix. But if the admins can browse the matrices of the other groups, like the development team's, then there can be a similar corrosive effect. One option is to only discuss the salary matrix within your group and with HR. But then we're back to a different version of the tired old story. (Don't discuss the matrix outside of your group!) This leads me to believe that it's best to be completely open. It might also serve as an incentive for people to make an effort to grow into different areas. Any ideas appreciated.
>I think publishing salaries has several benefits. For one thing, it removes the used car salesman
>approach to hiring. One result, which is more important, is that it can help eliminate wage
>disparity due to differences of gender or level of negotiating skills.
If you publish salaries, then aren't you just shifting the negotiations to which salary bucket you deserve to belong to? So instead of absolute money, now we're negotiating with fluent tiers based on other employees salaries (John makes 200K and I'm closest to John in terms of ability, so let me convince you how similar I am to John).
It will always comes back to demonstrating your value.As a developer, you're capable of creating logic that can literally scale to bring millions of dollars of value to a company. Stop talking about PHP. Stop talking about Rails. Start talking about the money you make for your company.
Who care about the middle-aged white male programmer who's too introverted to ask for a great compensation? Who cares about the woman who's too timid to assert herself?
They're their worst enemy. And it's not your problem to wait for the rest of the pack to get their negotiation-shit together.
More money on the table for you.
There's so many opportunities for devs right now (take a look at the recruiter emails sitting in your inbox). Learn a little bit of negotiation skill, and you're better than 80% of your peers.
Demand what you deserve. Take your kids on an amazing adventure. Buy the home you've dreamed of. Save some money and only work 6 months out of the year. And don't apologize.
At the firm that I work at everything is in the open, even between groups, and it works very well. It is a formula-based compensation given your department (basically consultants and back-office) and stated level. With that, I know or can calculate exactly how much my manager makes, how much an entry level HR employee makes, and how much the CEO makes.
I love it because it removes any problem with politics or shadowy discussions, and I know what I can expect when a promotion comes. The only downside is that it leaves the firm with little leverage when it comes to compensation: I can't simply get a bump without a promotion, nor are there extra bonuses that can be given out either for hiring or retaining. (This has its benefits as well however.)
I worked for a company like this. It irritated my VP who had her hands tied when it came to negotiation (like you mention). I ended up switching companies for an 80% bump.
These companies work really well for the median employee for all of the reasons you mention - especially the air of transparency. But I think it makes it nearly impossible to properly compensate top talent.
That's enlightening and encouraging. A formula-based/matrix approach might make it more acceptable because it isn't personal. One thing I haven't seen is how to handle COLA. I'm sure that can also be added as an additional factor, though.
(Late to the reply, sorry.) COLA is addressed on a per office basis. Our headquarters is in a relatively inexpensive large city, and so other offices in pricier places like SF or DC get a blanket COLA adjustment, with the percentage bump based on some particular survey's index or something.
I've seen it be remarkably accurate, but that was for a "Mostly cash, limited bonus" environment. I think one of their sources is H1B filings, which can be very accurate for those types of jobs. It misses equity and outsize bonuses.
First of all, you should always value equity at zero. Neither your landlord nor the guys at the farmers' market want your stock certificates, which are overwhelmingly likely to end up worthless (if they aren't already).
Second, most companies don't pay bonuses. Those that do usually have a bonus pool that depends in some way on the company's success in the marketplace, and they can almost always abolish bonuses at management's discretion. A good rule of thumb is that the more you need a bonus in a given year, the less likely it is that there will be anything in the pool. Don't even think of budgeting for a bonus. Ever.
Knowing what you're actually going to get as long as they keep you on is the right information. The other thing you'd want, which is very hard to get, is how likely they are to keep you on. For public companies you can read the 10Qs and look for news about layoffs, but it's much harder to discern how secure you will be at a smaller/private employer.
Serious question: if you value equity at 0, then (ceteris paribus) given a choice between (1) an offer at $150,000 and 50 basis points and (2) an offer at $150,100 and 0 basis points, you should choose option (2). Given that: why should any employer offer equity?
To the parent to your post: look, when you're picking a job, you're essentially buying the stock with your time, if not with part of your comp. Unless you're a true W2 mercenary, you should accept upside at a discount like tptacek's hypothetical.
So the GP got burned in 2001? That's a dumb reason to swear off all exposure to life-changing upside, forever, no matter what the expected return.
Unless you are a mercenary or shark who has to keep moving, think like a savvy investor first. Then indulge your preference for the type of work. And only after all of that worry about the W2 money.
Successful companies will breed opportunity to do the kind of work you want. Successful companies will also build your equity and increase your base rate to eventually catch up to market. Growth will create professional opportunities. Pick based on the prospects of the company first.
ITT people are too focused on the salary negotiations that patio11 brought up, and not enough on the aspects that build true wealth. Don't get trapped in local optimizations...you have to create exposure to outsized upside. If not through equity, then through side-projects and entrepreneurial activity.
Your choice of words is telling: "mercenary" and "shark" are overwhelmingly negative. By characterising people who disagree with your assessment of equity that way, you risk being perceived as a confidence man. Con men sell hope to the greedy at a steep markup; they are perfectly willing to use guilt if that's what it takes to reel in the mark. Anything to get someone to buy into their schemes for their own profit; in this case, by accepting worthless scrip in lieu of proper compensation. If you don't want to be perceived as unscrupulous, you should reconsider how you characterise people with different values.
I didn't get burned in 2001. I watched a bunch of people who thought they were rich suddenly realise that not only were they not rich, they were also out of a job with no prospects, through no fault of their own. I wasn't personally harmed; I rather enjoyed paying 40% less rent and spending half as much time commuting. Nevertheless, it was a magnificent learning opportunity for a young engineer, just as the bursting of this bubble will be for others. For anyone who prefers to learn the easy way, the takeaways were:
1. The market price of your equity is determined by almost every conceivable factor except the merits of your own work.
2. So few companies succeed in a way that makes your equity of life-altering market value that you should approximate the probability as zero.
3. You will not live long enough to accumulate enough wisdom to beat the market; that is, you are not better than average at identifying early-stage companies that are much more likely than average to be successful as in (2).
4. More generally, humans don't live long enough for buying variance to be a good strategy unless you are desperately poor. Otherwise, sell variance any time you can do so ev-neutrally. If you simply must buy variance, pay as little ev as possible for it. Flips and roulette are good; the lottery and buying stock on margin are bad.
"Life-changing upside" changes very few lives, even fewer deservedly so. If we lived 100,000 years, it might make sense to take a few thousand gambles on early-stage startups; the variance would mostly work itself out, and after a while you might even be able to tell who's likely to succeed so that your choice of employers would be +ev. In one 40-year career, forget it. The path to true wealth consists first of an inexpensive lifestyle and second of salary maximisation. Higher ev, lower variance.
There's a way to make an argument without calling your counterparty a "con man". I'm more on your side than the parent's side (though the idea of valuing equity at zero is illogical). I think your comment would be stronger without its first paragraph.
There's a way to make his case without calling anyone who disagrees a "shark" or a "mercenary". In fact, I think his choice of language was quite revealing of the true origins of his position; if it is not, he would do well to reconsider how it is perceived by others.
He didn't call you a mercenary. You did imply he was a con man. I know the difference seems subtle, but one is much worse than the other. Even if you disagree, two wrongs don't make a right.
I don't know about should, but an employer would offer equity because employees will often overvalue it.
IMO, equity is a great benefit. You might not get the most comprehensive benefits package, or you might work more hours at early stage company. Instead, you get equity.
In addition to relative value, equity has other benefits. It increases the "One team" spirit, where everyone rises and falls together. It also puts in a sense of fairness. If the firm thrives, it's not just the CEO and VCs who get rich.
There are downsides (lack of control of share price, and some freeloading) but for startups it's a great tool. The effectiveness shrinks a bit for large firms.
The effects you describe are probably specific to the individual. Having worked for several companies from tiny startups to gigantic megaliths, I can tell you that I never felt any of those things regardless of my equity package. I may be cynical, you may be naive, or both.
Companies succeed by being in the right place at the right time, being lucky, having good connections, and having leaders who make the right decisions. If any of those is missing, failure is certain. If they're all present, failure is merely likely. As a rank and file employee, you can sometimes cause a very small company to fail but you can never make any company successful. You're just there to execute; execution is at least somewhat necessary but never anywhere near sufficient.
The idea that making my economic outcome dependent on so many factors over which I have no control whatever is not merely expedient or regrettably unavoidable but explicitly fair would be silly if it were not so abhorrent.
On the last point, it's about fairness in the other direction.
If an organization like Youtube/PickYourUnicorn sells for a billion plus dollars with only a small handful of employees, all of which are talented and have put in long hours, would it be fair for only the VCs and founders to see the upside?
I do think it's fair. Is it fair that I'm not going to return any of my pay if things go poorly? The investors took the risk of paying me a market salary (no discounts, sorry) to make something there was no assurance anyone would want. They deserve the rewards or the losses as the case may be. That their profits in bubbles like this will be silly relative to the value they've created does not justify greed on my part.
If you still think there's a problem here, pay market wages and let anyone who chooses come along on their own dime on any subsequent funding round at fair value. No vesting/expiring options, no stock grants, no look-back, no discount, no limits, just the opportunity to be an investor -- in the moment -- on the same terms as everyone else. Just make sure (non-)participation is 100% confidential. I think very few of your employees genuinely want to be capitalists, but those who do should have to put cash on the barrelhead like everyone else.
You're correct. I think the issue is that most employees overvalue the equity, and undervalue the volatility. People think "I have 10,000 shares, and they could be worth 100 each someday - that's a million dollars!" rather than "I have 0.1% of a company that's currently worth $100 million based on the recent funding round. That's worth $100,000 in today's dollars if I stick around for 4 years, but probably will be either a lot more or less by the time that comes around."
But the to larger point above - what I meant in Glassdoor is they only capture base salaries. Not that they're not inherently invaluable. Otherwise you'd see a lot more outsize #s for banks.
Utility functions and such? Or, even without trying to cram behavioral economics into a more traditional framework. At some level, it may be rational to trade off some measure of certain income into a big (but very hard to define percentages of) bet in terms on money/being in at ground floor of something great.
It may be a sucker bet in a lot of cases. But expected value (given how hard that may be to compute for unicorns) isn't always the best bet either given vast uncertainties.
I know that this is a popular jab at state-funded gambling, but the reality is - at least for the people I've encountered - that they don't expect to win. They are paying a dollar to dream about "what if?".
Probably not the smartest use of money, but they see it as paying for entertainment - not a retirement plan. I thought that was an interesting insight.
I agree. I've just seen people who can't afford it spend a lot more than the entertainment value.
At my most selfish, I'd say, "At least this is one tax not paid by me." The downside is it does seem to use gamification to put the burden on those who can bear it the least.
I don't think they should. There are few circumstances in which any employee is genuinely going to have a major impact on the company's success, and in those circumstances it's appropriate to offer equity. If you're employee number 2, it's probably appropriate. If you're an EVP with total P&L and strategic control of a major business unit, it's probably appropriate. Generally, it isn't.
There's no reason for the owners of the company to give up any economic interest to people who can't directly influence outcomes. There are too many things that have to go right between a rank-and-file employee doing something right/well and their equity being valuable to them: the entire chain of command, whether the company has the resources to execute well, whether the company's suppliers and partners come through, whether the sales force is compensated properly, whether fads and trends in the market are favourable, macroeconomic conditions (both natural and man-made) and when all's said and done and the quarter's numbers come in, whether Wall Street analysts are in the mood to drive up the company's stock price (if the company is private, add in whether the investors want to go public and the market for IPOs). Conversely, the company can be lucky even if most of its employees are deadweight; you end up rewarding a lot of people for nothing, and those who actually did something will resent how much wealth was transferred to noncontributors. People aren't stupid; they know all this. Having equity doesn't make them feel more empowered, it makes them feel less so: it's just one more part of their economic lives they can't control. And for that reason, equity doesn't operate as an effective incentive, doesn't make people feel valued, and I would challenge anyone to prove that it improves outcomes for the company's owners.
With a few fairly obvious exceptions, the overwhelming majority of your employees are much more worried about (1) keeping their jobs and (2) bringing home more cash than about some pie in the sky payday that will almost certainly never come. If you want to reward someone for a job well done, give them a bonus or a raise. If you want your company to be seen as a great place to work, don't do layoffs; you're the capitalist, you take the risks. When things go well, you pay a market wage for labour and keep the rest; when things go badly, you should pay a market wage for labour and take the loss. You're the one making the decisions that led to things going badly; if you don't like taking the loss, make better decisions. If your employees wanted to live or die based on whether a company succeeds, they'd be founders. They're not; you are. Offering equity helps no one; it costs you money and control if things go well but, again with a few obvious exceptions, doesn't help you attract or retain better people. If you want to offer people something they'll appreciate, offer them a secure job for satisfactory performance and above-market pay for above-market work. Those who so desire can use that pay to buy their own stock or lotto tickets.
Agreed. Well, I've seen it be reasonably accurate about the salaries (and associated gripes) of the lowest-performing 20%. You can use their numbers if that's where you place yourself.
As a recent graduate about to go into his first ever salary negotiation, I'm really grateful for the perspective this provides. My dad was a taxi driver (now drives for Uber) and my mother a stay-at-home mom. I was raised with the notion of earning enough to support myself. Anything beyond that is something I'm expected to figure out myself. Posts such as these are very helpful.
A question though:
1. If I've had conversations in quarterly reviews that involved numbers but nothing was ever formalized, are those numbers open to renegotiation in a formal conversation?
2. How do I ask for equity and how much should I ask for as the first hire (technical employee of a non-technical founder)?
Edit: I'm aware the user who posted this is not the author, but I'm hoping patio11 or someone else comfortable offering negotiation advice will stop by the comments section.
Re 2), you should make sure your salary is at market-level and more or less ignore equity. Chances are you'll be let go or the company will collapse before it's worth anything.
If you have a reasonable salary, equity is just a cherry on top, but if an employer tries to get you to trade cash today for a startup lottery ticket, say no.
This is especially important early in your career given the time value of money. An extra $10k/year in the first five years of your career, properly saved, could add north of $600k to your retirement when you get to that stage in life. That's an almost-certain payoff against a roll of the dice on a sliver of ever-diluted equity.
Great insights, can definitely recommend not taking big equity gambles in your earlier years.
Although perhaps north of $600k is a bit too optimistic, you'd need a solid 6.4% inflation & fee free ROI on that.
In any case it's important to look at it in 'today's dollars'. For example, the S&P 500 did 20x in the past 40 years (roughly the length of a solid full-time professional career), so $10k could have turned into $400k if following that index. But in the 80s inflation went up to 15% causing devaluation, that 1975 dollar is worth about $4.5 today, meaning that $10k turned into perhaps 9x more purchasing power. Of course that's before all the fees get involved. Even if you'd get $600k by your retirement age, it likely will be the equivalent of less than $200k today.
But yeah 6% per year isn't crazy. If you manage to scrape together $50k in your fund by age 25 and work until 65, 500k is very doable, north of 600k perhaps optimistic but who knows what we can expect. Perhaps we'll see gigantic returns once we get 4 billion people on cheap mobile computing, free wifi in the sky, access to modern education, 3d printers, drone deliveries, digital money and a graphene industry haha. But historically speaking $600k is tricky!
Either way, doesn't change the fact this is great advise.
You're right, those numbers were simplified and don't take into account fees or taxes. As you say, the basic assumption still holds: 50k saved in the next five years will be worth significantly more 40 years from now when you retire. Whether that's 500k or 600k is immaterial to the central point: sacrificing salary early in your career means sacrificing huge financial gains over the course of your life.
Agree this is good advice a lot of the time. But just to offer an alternative possibility, there are other things that can affect the equation too. For instance, if you end up at the right startup you might learn a lot more than you would in the same amount of time at the alternative company. If you gave up $20k over 2 years by making, say, $100 instead of $110k at the startup, but then are able to jump to a job making $200k (which would have taken you much longer to work up to at the alternative company), you're a lot better off.
It still comes with some risk obviously, the startup could end up not going anywhere and you not learning much. But it's not nearly the risk of rolling the dice on equity.
I agree in broad strokes, in that I did exactly that with my last company. My first full-time programming job was as hire #1 as a tech startup (I was fired last month after two years) and while I'm now consulting, the full-time offers I'm receiving amount to a 50% pay raise, partly because I was able to build up so much experience in hot areas like Akka and Docker.
a. Startup equity is a lottery
b. As an early employee and the accompanying biases, I'm especially ill equipped to judge it's value.
With that in mind, I'm negotiating salary first. Equity with a vesting schedule is something I would treat purely as an incentive for continuing to stay with the company and not as a replacement for salary.
This sounds very sensible. I would note though that equity % points are much easier to negotiate early on. If you have an opportunity to secure options at a low valuation now, even with a great big cliff / vesting term, take them in case the company is a success and use the cliff / vesting to persuade the current owners that it's a win win.
Since L_Rahman didn't mention "startup" per se....
The Equity / RSU package from many big (publicly-traded) tech firms can be as much as 30% of total compensation. I generally account for this portion the same as "cash with a discount" -- when negotiating for my current role, I used a 30% discount on the present share price.
For startups... it's a mixed bag (as saryant mentions).
Most comments have responded assuming that it is a startup, and it was a correct assumption.
But it's helpful to know that large publicly traded tech companies can offer as much as 30%. If or when I do choose to work for one, I'll keep that in mind.
Also remember that the first non-founder employee is the least desirable position to be in. Usually you have very similar risk to the founders with _significantly_ less equity. Don't take the job unless you get market rates or significant equity (10%+). If they already have funding the former is much more likely, if not then latter makes sense considering the stage -- you're effectively a founder, even if you're not leadership.
For 2, if a reasonable salary is $X, and the company offers you $X-$Y, you're essentially investing $Y per year into the company (at worse terms than actual investors). How much equity do/did investors want for $Y?
It isn't that simple - investments and their returns have risks built in, and people expect more return for more risk. If you are an employee, you are not risking your own money, you are just losing some opportunities for cash. This lost opportunity does work into the equation, but not at the same risk level as an investor because if the company tanks, the investors lose every dime... But the employee still got paid the whole time.
I do agree that for negotiation purposes, considering pay below market value is a good point for discussion. But don't get offended if it is not weighted as heavily as people who actually wrote checks.
> if the company tanks, the investors lose every dime
If you choose a $90k job + equity over a $130k job, and the company tanks 2 years later, you've lost every dime of that 80k.
It's a bit different since your "investment" consists of 24 tranches, but that's more than balanced by the vesting schedule which gives you nothing for a year (despite accepting your investment immediately), and takes it all away if you stop investing.
Actually, as an employee, you're actually risking more, as your total wealth is (most likely) significantly less than an investor's, so according to the economic theory of diminishing marginal utility of income, $10k/year is a significantly greater loss for an employee.
1) It promotes mediocrity.
2) Creates a political cesspool.
3) Ties the hands of hiring team.
1 - Excellent people want to go places where they can make more. When excellent people learn about public salary postings the first thing they will worry about is the perception of other employees. I suspect they will just avoid conflict and work somewhere else. Really think about the current open salary systems: state governments, federal systems (cia, fbi..), school teachers, college systems, military..
2 - Will you help the "next" person above your salary grade? Why? Your goal is to be higher than he/she - so this promotes extremely bad behavior. This is how yahoo is setup. People will be trained to create little moats to protect power, inflate budgets, hide data, hurt other employees.
3 - Really want that new hire? Well, now you have no negotiation power. If you pay this employee salary X. Anyone who gets less than X (Call this Y) will be pushed down in the employee chain. So now, instead you want to minimize Y. Sublimity, you will hire less and less capable people to avoid conflict with the current team.
1. Government and schools sit under enormous political pressure to keep salaries low, as part of a larger agenda to 'drown it in a bathtub'. This pressure keeps school salaries so low relative to the amount of responsibility and regulation that one has to be a bit crazy to choose teaching as a profession. Universities get to take their choice of the PhD students they produce; their hiring problems are more a problem of funding than worker supply. And the military I know little about.
2. Businesses need to ensure that their workers are focused on product quality over internal politics. That's a failure of culture, full stop. These internal politics, if not focused on individual salaries, can instead focus on project head count, building fiefdoms, etc. In short, if you fail to manage internal politics, you'll have these problems regardless of whether employees know what they're getting paid.
3. Yeah, capitalism's a bitch, huh? Funny how all of the 'power of free markets' rhetoric dries up as soon as it's turned back around...
Somewhat more seriously, this mainly shows that you need to peg employee salaries to a minimum of market rates, so that they aren't unhappy when that new market-rate hire comes on, and then go above this minimum based on performance. It's not that hard.
> Excellent people want to go places where they can make more
The issue with engineers is that we don't do that and are bad at negotiations. Once at job people rarely look out unless they realise that they are grossly underpaid.
This may be true for other job profiles like sale/biz-dev etc where the day to day jobs hone their skills for best deal extraction.
You are totally correct. They avoid conflict. If engineers are told at the interview - "Your salary will be this, it will be posted online for all the other employees to see"
The problem I have with this #talkpay thing is that it assumes everyone I connect with is in our lucrative echo chamber. I'd feel like a asshole talking about my income as a contract developer knowing I have followers who are really struggling to find work / decent pay outside of technology.
Conferences, tech meetups etc I'm usually the first to be championing developer solidarity and pushing the message that we can and should all be demanding more money, everywhere else I try and keep it low profile to not rub peoples noses in it.
I have a lot of non-tech folks ask me about money (when they ask me what I do and if it pays well) and I always try to avoid giving numbers and go with a more generic 'I can't complain, things are ok/good'. I earn a lot (and I mean a lot) compared to non-tech folks where I live: 20x difference in some cases. I had a friend recently in a conversation mentioning that buying X (one of those cheap android tablets for kids) as a birthday present was 3 days worth of her work. In my case, it is less than 1.5 hours of my work.
I'm very happy for earning these values, and I try to give back when I can, pick up the bill here and there (enough to help, but not enough for people to resent it) but I know we developers are quite lucky with the luck of the draw we got in this little slice of time and IMO, we should be more considerate of others in these cases.
I feel the same way as a 2012 college graduate. Most of my college friends are still unemployed or working in marginal work (temps, office admins, phone support). On top of that, most are buried in student loans (private college) whereas I had parents able to pick up the tab. More than one has turned to webcam porn to make money while I'm charging $$$ as a software contractor.
I post photos on Facebook from Tokyo or Berlin and sometimes wonder if I'm pissing off my friends.
I don't think you should stop posting photos from your trips just because you are 'afraid' you will be pissing off your friends. They can always unfollow you (or whatever FB allows you to do, I'm not big on social networks) if they find it 'offensive'. I just think it is a balancing act between sharing parts of your life, and sharing absolute numbers or boasting.
Anyone that knows me for more than 5 minutes, knows I'm doing well (I live in a nice place, in a very expensive area for example and I don't hide this), but at the same time, I avoid letting (outside of very close friends) people know how well exactly. I never talk about money or salaries or what not. That doesn't mean I won't invite them over for dinner/a swim in the pool just in case I 'piss them off'.
Something which I think is only hinted at here: negotiating pay requires a willingness to lose the job if the negotiation doesn't go well.
If hirer has an equally good candidate or consultant who quotes a lower rate: you're out of the running. Even if you're better, you have to be better value according to the employer's own assessment.
There are few employers who are price insensitive and you have to be in an overwhelmingly lucky or privileged position to find them.
> negotiating pay requires a willingness to lose the job if the negotiation doesn't go well.
That's why, if possible, you negotiate when you already have another offer. I negotiated a +50% annual pay raise at my last job because I was completely willing to walk away for another job.
I also got the raise because I was playing an important part in a high value project at that time. I felt a bit guilty about the possibility of leaving the project in the lurch, or negotiating when my value was at its highest. I thought it would lead to resentment from my managers if they thought I was strong-arming them.
But they agreed to the rate, and never showed resentment. Every successful business person or trader knows to sell high, but sometimes the rest of us forget.
> If hirer has an equally good candidate or consultant who quotes a lower rate: you're out of the running.
If you can easily be replaced by a new hire or a consultant, you don't deserve the higher salary.
I felt a bit guilty about the possibility of leaving the project in the lurch
You shouldn't and you did well. Whenever you have a position of strength and the business can afford it, you should exercise it. Simple. This is business.
I don't think this is really that big of a concern. If you try to negotiate for more pay, I don't think anyone is going to rescind the offer. The worst case is that they won't budge, in which case you can still take it.
If someone is willing to rescind an offer because they are upset that you tried to negotiate, it's probably not someone you want to work with anyway.
"Salaries are not just internally transparent at Japanese megacorps but so predictable that any middle-class adult in central Japan can accurately predict my salary history. I mention this partly to say that salary transparency by itself does not guarantee happy outcomes for employees."
Yes. Salaries at Buffer might be transparent but also quite low.
Yeah, I actually prefer a lack of transparency. I fully recognize the right of others to discuss salaries openly and support their ability to do so. However, I think aside from benefiting companies, a lack of transparency around salaries benefits those who are good at negotiating, whereas complete transparency helps those who are not good at negotiating.
If for example, you know company X's highest paid software developer makes $110k, and the lowest makes $90k, (and such a narrow banded salary range is probably likely if everyone knows exactly what everyone else earns), you probably aren't going to get them to pay you far north of $110k simply because that would carry the likely result of increasing everyone else's salary since they now know you are making more than they are and they want a salary increase too.
But the lack of transparency should really go both ways, ideally if you want to get the best terms. That is, if you can inflate your previous salary or not disclose it at all while asking for a number significantly above it you are in a much better position than laying bare your entire earnings history.
For this reason I'm also selfishly for not publishing salaries within a company.
I'm all for talking about salary to everyone except co-workers. Knowing what you can make elsewhere gives you power to negotiate or move. I know what my engineering friends make, I know what they are getting bumped to after reviews, I know what offers they are getting and the same goes both ways. Knowing what everyone makes internally would just cause trouble I think.. At the least I would imagine it would limit my options to only companies that can afford to pay everyone top dollar..
Transparency benefits the company for this exact reason.
There is a non-zero cost (headache, dollars, what have you) in leaving an organization. This means that salaries can be at market rate, drift below, and people still may not see enough value to leave.
Good negotiating means you will always see market rate or above. Transparency means salaries will drift below market rate until someone deems you worthy of a bump.
Buffer salaries are outrageously low: for that reason alone, I would never advise anyone to work there.
Salary is only one part of a company's compensation. For instance, in the Buffer case, they do remote working, so some people could find that to be worth quite a bit.
It's ok to discuss your salaries with your colleagues, especially with the ones that are currently being shafted. But don't discuss your salary with recruiters for other firms, no need to make their lives any easier than they already are. Make them work for their money and disclose a range instead.
>> However, I think aside from benefiting companies, a lack of transparency around salaries benefits those who are good at negotiating, whereas complete transparency helps those who are not good at negotiating.
This is exactly why salaries _should_ be transparent. Skill at negotiating salaries, unless you are an agent, is not a relevant skill. If you are an engineer, for example, the company should not be rewarding or penalizing you for your salary negotiation skills.
I disagree. If engineers are notoriously bad at negotiating (which we probably are), the solution is to improve that skill, not to seek to avoid negotiating in any form or fashion. The idea that you can willfully eschew any responsibility for asking for what you want (which is really what a negotiation is) and still get it, is both self-defeating and naive.
The reason lawyers/agents/salespeople are good at negotiating is not merely that their job requires it, it's because they have developed that skill.
This is true, but it's also inefficient for society as a whole. Basically, what the other side is saying is that yes, negotiating is a skill, but the reason why our economy works so efficiently is that we instituted division of labor. If everybody specializes in some skill, then they will be better at it than a jack-of-all-trades. On average, an engineer should be able to become a better engineer if they do not simultaneously have to worry about improving their negotiation skills. That would be overall beneficial to society.
So it might actually be better for society if the range of potential income is much smaller, because individuals in such a society would spend less time on skills like negotiation, which are not directly productive.
Depending on your outlook on life and how much anxiety the knowledge about income differentials causes you, the situation can look very much like a prisoner's dilemma.
>> Basically, what the other side is saying is that yes, negotiating is a skill, but the reason why our economy works so efficiently is that we instituted division of labor.
Understood, but division of labor is largely gray and only really gets divided when you move up the income chain (ie, the wealthier you are, the more things you can pay others to do to free up your time). Why learn how to make your bed or drive a car since technically you could pay other people to do those things for you? Professional athletes, musicians, and actors pay agents to negotiate their deals for them because they have much more at stake and it makes sense to bring on somebody who is an expert in contracts for specialized fields since its almost certainly a net win for both parties (talent and agent).
Unfortunately, engineering doesn't really pay enough to warrant bringing on an agent to negotiate on your behalf. So people can choose to wish that complete transparency existed and that we all make the same amount at each level of ability, or they can choose to accept that the job market is just that- a market. If you accept a salary of a certain rate and on certain terms, you are selling your services at an agreed-upon price. Just because somebody else asked for more and got it, doesn't change the fact that you were happy enough with the amount you agreed to work for and got it.
So really what we are talking about is wanting happiness with the amount you are paid regardless of whether it is enough to meet your personal needs. If the next person is making 10% more than you, then suddenly you are unhappy. There was a famous psychological experiment that actually verified this same thing- that people would generally be happier to make less money so long as somebody else in the same position isn't making more. That is not a net win for employees. In fact, those who can negotiate up their pay are probably helping the entire field of employees in that domain, since even if you are the bottom 50% of wage-earners in a high-paying field you are doing better than if everyone's pay remained stagnant at a lower level.
I agree with you. Anyway developing this skill also means that you allocate a considerable brain processing power into this activity; far more than some devs want/can allocate. This skill probably will make (or force) them into management.
If consulting is making $30k/week/job then why keep running the personal businesses? Why not take the consulting and branch it out, and drop everything else as a distraction?
Because I enjoyed running the software business more than I enjoyed running the consultancy. Partly that is for difficult-to-explain personal reasons (I feel the sense of satisfaction with operating a software company that some people feel when painting things). Partly it is because of reasons which are endemic to consultancies, even successful consultancies. Feel free to ask if you're curious.
I also have a quirky relationship to money as a goal. Rather little would change about my life if my salary increased by $800k. My hobbies would remain books, video games, taking my wife and daughter on walks, and posting too much on HN.
I'll take a stab at the "why not build a consultancy business"...
It's not scalable in any shape or form. Despite having aspirational goals early on, every consulting company falls into the trap of becoming a body-shop. It happens every. single. time. You begin to feel less satisfaction about your services and proposals to clients because you emphasize "our talent speaks for itself" and it's polarized by your clients desire to simply want to pay X for Y and don't care how, what, or who delivers it. Being a one-man shop means that right from the beginning your client's expectations are set on you being the right man for the job and they'll get Y because they're going to pay you X. At scale (I'm looking at you IBM, Accenture, etc) you end up fighting with cost center budgets, and spend more time trying to squeeze quality and scope within a set budget, or risk overspending budgets and end up looking like a bad services partner. Building a consultancy sounds awesome at first, looks awesome at first, and then it slowly burns you down.
Another way of saying this is that scaling a consulting business involves a peculiar set of challenges which may or may not be animating for people like Patrick. :)
I enjoyed the process of scaling Matasano; I only left because Erin and I were more engaged with the idea of making a dent in recruiting.
Things one does to scale consultancies:
* Refine a recruiting and hiring strategy to make it easier to staff larger number of projects.
* Build ramp-up processes to take new consultants and get them to "billable" status quicker.
* Play with service definitions and rate books, so that clients that need Patrick-level delivery can pay extra to get it, while clients that just need deterministic competent execution of tasks Patrick was good at 5 years ago can pay less to get someone without the name brand.
* Develop systems to cross-train consultants so that more people get an opportunity to (a) watch Patrick deliver a project, (b) deliver a similar project themselves, and (c) help bring other consultants up to speed.
Because revenue is so directly tied to performance and delivery in a consultancy, I think it's a pretty good lab for learning how to effectively manage people.
It's also true that a lot of them just turn into body shops.
Horizontal scaling in consulting seems to be what you're so put off by, but I think at most lower levels, vertical scaling is still very possible.
For me, at least for the forseeable future, I'm pretty solidly convinced that I can earn more money by studying and improving my tech skills than I could ever earn by taking a side-job that actually pays me dollars in my hand.
Maybe one can "max out" and just know enough to get their job done, but I'm not there yet -- I frequently find myself ditching other opportunities for making short-term cash in favor of learning something new. That's why I would favor "building" over running a less profitable software business.
Not snark... serious question... its not clear to me what sort of services anyone could offer for 30k per week... what sort of thing commands that kind of price tag?
Making $20 million a year SaaS companies into $22 million a year SaaS companies. If you have reasonable expectation that I can actually deliver on that, then you're pretty much willing to say yes to any rate I quote.
If you're curious "How does one turn a $20 million a year SaaS company into a $22 million a year SaaS company?", there exist many options depending on the specifics of the company and virtually all of them are doable. For example, if you increase the rate at which the SaaS company closes deals by a modest amount, that could reasonably hit that by itself. You could do that by some combination of A/B testing, better email marketing, tweaking sales processes, etc, alone or in combination. I've blogged pretty extensively on all those topics if you're curious.
These are not necessarily all that technically complicated. If you can figure out ActionMailer, an if statement, and a for loop, you have every technical capability you need to be an engineer in charge of email marketing. The interesting bits are "What emails do I decide to send?", "What words go in those emails?", and "What goes in the if statement?"
The actual work is exactly as dominated by meat-and-potatoes execution ability as you think it is.
What books can I read to, at the very least, attempt address the questions in your 3rd paragraph, given how unique every business is? Isn't anything you find a book on sales or marketing so abstract that it's 2 or 3 layers of assumptions before you can talk about projections? How does one begin a career in SaaS sales / marketing? What makes for a good "portfolio piece" in that domain?
One of the things that has made Patrick a "tech. celebrity" is that he has written extensively and openly about this very topic. In particular his brand of uniqueness was to take a lot of things that engineers don't like and then turn it into an engineering problem. He didn't guess, he tested.
Here is the amazing thing, he also did all of us a huge service and wrote it up and put it on the internet for everyone to find!
If you haven't yet, spend as much time as you can diving in his blog. Every post he's written is worth the price of admission, but you could definitely limit your search to the ones that focus on the SaaS sales and marketing aspects.
I wouldn't call Patrick a 'tech celebrity', I would call him a 'marketing celebrity' in tech. His writings on how to market yourself are without doubt the best essays I've ever read on the subject.
Those are the standard skills of marketing people I've worked with, getting paid around £30000/year. I find this very peculiar, maybe the companies particularly dysfunctional, but there seems to be a missing variable.
Strategic advisory work. As an industry analyst, I would get paid up to about $18K per day from large clients. (Really a day plus travel plus prep plus some follow-up. And sometimes two of us would do the engagement.) But, still, $5K-$10K per day although we didn't get that level of engagement all that frequently. $10K-$20K is also the rough going rate for speaking at sales meetings, etc.
$2K or so per day was more routine for reports on a variety of topics (competitive analysis, strategic options, etc.) Expert legal work is probably in the $400-$500/hour range.
I can't give any details, but the largest bill I've seen was $1M for ~2 person-weeks worth of work; it was clearly demonstrated ahead of time that it would save the customer about 10x that, and the customer had tried twice already to do it in-house and failed (it was way outside their core expertise).
Imagine you are running a business making $30 million in annual revenue. You run into someone that reliably assures you they are able to increase your sign-up rate by 1% by optimizing your sign-up flow, SEO, and other general magic. This 1% increase in sign-up rates is easily worth $1 - 3 million to you. As a business man, the only question in your mind should be "When can you start?"
Overall, is it that being closer to the product feels better? And did you really shake all the "weird feelings"/impostor syndrome about charging a high rate?
I'm going to hazard a guess and say it's not sustained i.e. he's not charging $30k/week for 52 weeks straight. He gets a gig here or there and that's what he charges.
I've charged $20k/week for consulting and it was week here or there, not for the whole year. But I may be wrong.
(a) Money isn't everything.
(b) Over a long time horizon, selling a product is more profitable.
EDIT: It's non-trivial to go from consulting to product development as part of the same business. It's often easier to use the money from consulting to start afresh.
Can you offer any insight into how many gigs per year you booked? I know utilization rates for consultants can vary greatly and I'm curious to find our more about the relationship between number of gigs and your increasing rates.
The typical consultancy would try to sustain ~70% utilization (+/- 35 weeks worked per year). I was generally doing closer to 10, as it was a sideline to my software company. I am reasonably confident that I could have sold 35 weeks of availability, or 100 for that matter, if I wanted to run a multi-person consultancy (c.f. tptacek's comment).
I was fortunate enough to be able to ask patio11 that same question at MicroConf Europe a few years back, and I was very heartened by the answer: it's not what he wanted to be doing.
Most important takeaway about salary negotiation, by the way: disclosing a previous salary is almost always against your interests because it pegs your new salary to that plus 5% rather than your value to the new firm minus a discount, which is a brutal mistake
Completely agree with this, though I made a mistake that was even worse than this. A friend hired me a couple of years ago to join his small company as the first developer, during which I disclosed my salary and also mentioned that I was willing to take a pay cut (as I wasn't happy where I was, and he was a tiny company still finding his footing). Fortunately, he matched my salary, so I didn't end up making less money as such, though it also didn't take into account of the value that I brought to the business, being the only developer on the team.
As a result, it certainly feels like I've sabotaged myself, where I should be making more than I am, with the only solution being to find better compensated employment elsewhere despite being reasonably with my current role.
Most important takeaway about salary negotiation, by the way: disclosing a previous salary is almost always against your interests because it pegs your new salary to that plus 5% rather than your value to the new firm minus a discount, which is a brutal mistake
I used to believe in this adamantly, however recently I think it requires a bit of refinement.
First, it depends on where you are presently. If you are in a job you really don't enjoy or are not performing well in, for whatever reason, your top priority is finding a job that better utilizes your talents. A lot of people believe that once you start a job at a certain rate of pay, you can't negotiate it up significantly because you will always be anchored to that initial amount. That isn't really true. Once you start if you perform well you become a valuable asset, and companies don't like to lose valuable assets. One option is to find another company that will offer you the amount you want to make and take it back to your company and ask them to match it. Very often they will and without much argument. However the important thing is to start.
Now if you are in a job you enjoy and have no real desire to leave except pay, then you definitely should not disclose your salary, as you have a powerful negotiating position as you really don't need to move. However if the company is really pressing you to give them a number and won't move you on unless you do, it's okay to tell them the number if you are up-front and steadfast in that you are looking for amount $X which could be 1.5x, 2x, or any multiple of what you are presently earning. If they claim they can't match it then move on.
Finally, never negotiate salary with a recruiter before meeting with the hiring manager. Many times (certainly not always) recruiters do not know much about the job requirements besides what was written by the hiring team in a bulleted list. They don't have the authority to grant salary requests, but in many cases hiring managers do. I have had several job offers come in well above what the recruiter told me the job paid. No matter what you are told the salary range is, if a team really wants you, they will pay to get you.
> (Most important takeaway about salary negotiation, by the way: disclosing a previous salary is almost always against your interests because it pegs your new salary to that plus 5% rather than your value to the new firm minus a discount, which is a brutal mistake, particularly in the years of your career where natural growth in capabilities/experience/the market/etc causes you to bring vastly more to the table with each new job.)
This is terrible advice. If a prospective employer asks how much you are making, respond with your desired salary at minimum. If they are serious, the negotiation point will be that plus whatever raise you claim to be looking for. If they want paystubs, you seriously don't want to work for them, because no professional should suffer that indignity and they're probably turning away great people as it is. I've only had one company ever ask for paystubs in my career and I got a weird vibe from them early on anyway.
If you tell HR "I won't tell you what I made last job, but I'll tell you what I want to make", then you're basically following most of Patrick's advice.
If you can lie convincingly, lying might be an effective negotiating strategy. Lying convincingly here generally involves you knowing as much about the job market as employers do, though, and that tends not to be the case: employers talk to 10 people for every 1 hire they make, and so they get a pretty good snapshot not just of the field at large, but of what other people at your current firm make.
Lying unconvincingly is a very poor strategy. It broadcasts both naivete and insecurity to your counterparty, both of which are exploitable characteristics.
In the current market you don't need to lie: just get multiple offers.
Also, you can use recruiters to your advantage. Give them much higher salary demands (i.e. 20-50% higher than your current wage). They'll come back to you if they find someone willing to pay. If they question you, then the reason you're expensive is your specialist skill-set.
Exactly right. Who would ever tell a prospective employer what they are really making? I'd agree you should tell them a number close to what you expect to make if you switch companies. You'll possibly get an offer that exceeds you original goals. It's important to go into these things prepared and well researched.
There has been a recent trend in tech discussions to have greater transparency in compensation, and more importantly, removing negotiation from employment procedure (see recent changes at Reddit). I fear that this move would dramatically hurt startups, who need all the flexibility they can get. Moreover, this move could dramatically kill any form of cohesiveness in startups. Lastly, this move would de-emphasize the importance the skill of negotiation, which would be a detriment to the company.
To those who don't know, most large companies already have a structured pay table. Try working at AT&T or McDonalds, and you can probably predict where your salary will be in the next 5-10 years. Real negotiation for most people in most positions mainly happens in small firms and startups.
Lack of salary negotiation will only scare away well qualified candidates who don't fit some arbitrarily made rubric (which will almost always back out to years worked, which is a terrible standard). Imagine if by paying 20k extra, you can get one of those mythical "10x rockstar" engineers. Would you remove your ability to hire him?
By opening up everyone's salaries, it will only hurt the startup culture, as it will only make people dislike each other. I often found engineers and business development people devalue each others work, in large part because neither party can understand the work of the other. Imagine them knowing each others salaries! Each side can find a justification on why they are being under-compensated while the other over-compensated. Startups need cohesiveness to survive.
Lastly negotiation is a valuable skill in the workplace. Interviews reward people who can handle stress and negotiate. Imagine a shipping date is imposed upon you, and not all the features can be included. You're going to want a leader on the engineering team to negotiate with the strategy makers to find an equitable solution. De-emphasizing negotiation is de-emphasizing a critical human skill.
By opening up everyone's salaries, it will only hurt the startup culture...
This is completely true, though perhaps not for the reasons you put forth. "Startup culture", as it currently exists, is a mechanism for VCs to consume recent CS grads who don't know how much they're worth and extract as much value from them as possible before they get a family/house/realization of how they should actually be compensated. Startups and VCs use their information asymmetry as regards salaries to exploit this inefficiency in the compensation market.
Imagine if by paying 20k extra, you can get one of those mythical "10x rockstar" engineers. Would you remove your ability to hire him?
You haven't removed your ability to hire them at all by being transparent about compensation -- you simply now have to be able to justify that to your team. If you are unable to justify it, that should tell you all you need to know about what "10x" means.
Recognizing that someone is tricking you by using guilt to convince you to suppress your own salary is the first step of learning how to negotiate effectively.
I seriously disagree with just about every point in this.
First off, transparency != lack of negotiation. It just means that your colleagues might be able to see the outcome of that negotiation. Even with salary bands you still need to determine where in the band you land on day 1, and those bands are often wide enough (10-15%) to allow quite a lot of flexibility. Also, most "large corporations" will have many job descriptions and titles indicating seniority: an Engineer II will have a wildly different salary band from Principal Engineer, leaving plenty of room for negotiation on hire.
Second, there is basically no way to determine that someone is a "10x" engineer (if such even exists) via an interview. Decades of studies across the industry have shown that interviews are a terrible means of assessing potential performance, and unless you've worked with someone on an essentially identical product in a similar company before you can't predict their output now. (Also, see above re: strawman argument about not being able to move $20k for an exemplary candidate.)
Third, if you can't build trust across teams (with or without visible salary info) you have much deeper problems than your comp being public. Fix this before everything else. If you're building "cohesiveness" by implying to your staff that every other teams makes less money (and is therefore less valued) you're setting yourself up for real problems down the road.
Finally, salary negotiation is a very different beast than feature and scope negotiation. The former assumes a selfish if not antagonistic stance ("get as much as I can") while the latter should be collaborative ("deliver the best possible outcome given our constraints"). People who are good at the former may or may not have the empathy and vision needed to deliver on the latter.
Publicizing salary just requires, as a prerequisite, publicizing the objective value each employee is adding to the company. Which requires everyone agreeing on an objective standard for calculating that value. Once you have that, kbowing salary isn't nearly as scary.
On the other hand, once you have that, people will start actually thinking of their peers in terms of being high- or low-ROI...
> this move would de-emphasize the importance the skill of negotiation, which would be a detriment to the company
Can you explain this a bit more? Because poor negotiators are paid easily half as much as good ones in this industry, but the amount of my value that hinges on my negotiating ability is somewhere between 0 and 1%.
...this move would de-emphasize the importance the skill of negotiation, which would be a detriment to the company.
And it would benefit the employees of the company, who are disadvantaged because they only negotiate salary every now and then vs the hiring manager who does it all of the time, and who also has insider information on what the company is willing to pay and what everyone else in the same position is earning.
For an employee, knowing that your company, and probably your manager, reduced your income simply because they could is not very good for morale and loyalty to the company.
...some arbitrarily made rubric...years worked, which is a terrible standard
Totally agree with you there. Structured pay tables have to be based on more meaningful metrics than seniority and job title. I got glass-ceiling by that for a long time because I didn't want to switch from development to management, and my company (CTO and his toadies) didn't want to let me join the Architects group.
...engineers and business development people devalue each others work...Each side can find a justification on why they are being under-compensated while the other over-compensated.
That's true, but the business development people tend to be more highly compensated, work fewer hours and more regular schedules, and have much more political power within the organization. It'd be better if there were objective metrics for measuring everyone's value that both sides could understand, so they don't devalue each other. Everyone doesn't have to get paid equally in order for everyone to get paid fairly, and if a startup can cultivate a culture where everyone feels they're being treated fairly, they're going to be a great place to work.
Interviews reward people who can handle stress and negotiate.
Also people who are good at "faking it until they make it" and other techniques that work well for interviewing but not so much for doing the job. I don't think taking the salary negotiation out of the interview would reduce the stress level much, or the interviewers ability to judge how the interviewee handles stress.
You're going to want a leader on the engineering team to negotiate with the strategy makers to find an equitable solution.
No, you want a leader on the engineering team and a leader with the strategy makers to collaborate on finding the best solution for the company's needs. There should be no negotiation involved at all. This is mathematical constraint-solving, not deal-making.
Objection 1: In most of the instances I'm aware of (please comment if you know of counterexamples), salary transparency only happens in places where compensation is based on a few obvious parameters like years of experience and job title, with little room for individual variation. In cases where there's a large variation in productivity between employees with the same role, it's not going to be possible to pay them commensurately in a system with fully transparent salaries. So this seems to only really make sense in roles where individual contributions are too tied up with group performance to disentangle, or where they're very hard to measure.
Objection 2: To the extent that perceived relative pay is the variable that actually matters for determining how happy someone is with their compensation (ask someone in NYC versus someone in Mumbai with the same cost-of-living-adjusted salary how rich they each feel), then releasing salary information can be welfare-reducing even if it does cause salaries to rise in general. This is one of the strongest arguments opposing income inequality: the existence of very rich people makes everyone worse off by making them _feel_ poorer.
Objection to objection 2 - are you seriously suggesting that basic market functions like price transparency will be a bad thing because it will make well paid people feel less well paid? They can cry all the way to the bank.
Paying people proportional to their productivity is one measure - paying relative to marginal contribution is probably more accurate - so a CEO of 100,000 people who manages to get them all to work 1% harder has made quite a valuable contribution. Edit: this presupposes the PR / in house magazine publisher is not really Responsable ...
Patrick's got a ton of great insight into salary negotiations, and this post is no exception. Everybody (especially engineers) - needs to get comfortable talking about compensation and wages in safe spaces. This shouldn't come from a sense of ego, but from a much more humble and sincere sense of information-sharing.
The people who are hurt the most by keeping compensation info secret are precisely the ones that need the information the most - folks from low income backgrounds, people worried about making more than their parents, etc.
As a practical tip, one thing I encourage everybody who's a client to model their equity grant in a simple excel spreadsheet. You need to know
* your strike price
* preferred share price
* company valuation
* total # shares outstanding
As a rule of thumb you can assume your shares are "diluted" (that is your total % ownership relative to valuation) will decrease anywhere on the order of 15%-40%) after each funding round depending on company's performance. Plotting this beforehand, along with where you believe the company will end up, will give you a great sense of what your equity is worth.
[Source: I founded http://OfferLetter.io - We help engineers and other tech workers get what they're worth. If you're interested in free data, you should join Offer Drive (http://offerletter.io/drive.html to learn if you're paid fairly]
I've always found the taboo about discussing salaries weird. In my experience, it's almost nonexistant among Russian immigrants to the US—at least the ones my family knows—and yet hasn't caused any real problems.
Sure, there are issues of status and perceived worth around salary—but hiding the numbers doesn't help. People still know your job title, understand your company and see your lifestyle. That's more than enough! Numbers only matter if you want to talk about relatively small differences—ones that matter far more for salary negotiation and evaluating a position than they do for cocktail party
Now, perhaps I'm just being simplistic, but the way I see it is genuinely simple: markets are about transferring information. To do this well, participants have to know what the prices are elsewhere. An arbitrary cultural taboo around the prices does nothing but impede the flow of information. The fact that it's asymmetric just makes it doubly worse.
Transparent salaries are about as capitalistic and idea as can be.
Unfortunately, by character, I'm also unlikely to take my own advice: I fear awkwardness disproportionately. Just one more reason why I deeply dislike arbitrary social rules.
It's like no one has every heard of a salary survey, and thinks the only way to get that information is for everyone to reveal their pay!
Just go buy a salary survey! The information will be far more detailed than just random salary tweets from people in different roles, with different capabilities and different experiences in different cities in different countries.
Hey, someone doing my job in San Fran gets $200k! I'm going to go and ask my employer for that! A quick check of a salary survey might sober me up.
Also a salary survey is far more potent data to present in a salary negotiation to convince people to pay you what you want, rather than "Someone on twitter said...".
Meanwhile, in Finland, you could just tell the company that: "If you really want to know, then please visit the tax authorities' office and look up my previous year's taxable income from their public terminals."
The part about 2X total lifetime of business earnings made me think of a good Serbian saying (could be Montenegrin, not sure): when negotiating on price, a good deal is when you're ashamed of your offer.
Hmm. We just ask people how much they want to make and give them as much time as they need to respond.
If it's higher than we can pay, then we say sorry we can't pay that. If it's way lower than we would expect we usually tell them that we wouldn't expect to pay less than X for their skills and experience.
This has worked great so far because if someone came back with a really low number and we just took it, then a month later they will realize they undershot and then they feel awkward about bringing it up - so, best to avoid that.
My ethos is: Pay people enough for them to not think about money. If you are only working for me for the pay then it's probably not going to be a great working relationship. They are better off going to work at megacorp where they can sham.
On the other hand, when someone states much more than you can afford - don't you think to just pass on this candidate, because she might feel unhappy even if she accepts the offer?
Also, to follow Patrick's advice - if someone doesn't give the answer but instead asks the same question to you - "what's the budget/range for this role? ", do you answer honestly?
Interesting use of the term Rack Rate in the article -- I had to google it: The published, full price for a room in a hotel that has not been pre-booked [1]
Posts like this, and the #talkpay on Twitter, is the kind of stuff I would've loved to have a couple years ago, starting in the industry. Here's hoping this sparks a conversation across the industry between employees and managers on salary over the next couple months.
If people knew everyone's salaries there would always be discontent. There will be people making less thinking that are better/more experience/worth more than person B making $X more than them.
I think that relates in part to how big the disparities are. If people are making mostly similar amounts of income, risk of discontent may not be as big an issue. For a large-scale example, Norway makes the annual income of the entire population public information, and yet the country isn't erupting in discontent. Of course other elements of culture (whether national or company culture) are involved as well.
I think it's reasonable to believe that the employer should have a good answer to the question "why is s/he making more than me, what does s/he do better?"
Well, a good answer would be "because s/he is familiar with codebases A, B and C and has skills X, Y, Z", and I would expect the employer to follow-up with a raise if the employee in question also learns all of the above.
There's always going to be discontent no matter what. If someone thinks they're worth more, you can either agree and pay them more or disagree and they can leave. That's how a market works. Your employees almost certainly already know more or less what they're all getting anyway, and most of them are probably unhappy about it. They keep showing up and doing the work because it beats the alternative for them.
As someone who works for the government and makes almost more than 50% less than those in the private sector doing the same thing (according to national studies for my profession at my level) this is depressing. I don't know, in the back of my mind I want to launch my own startup and get out of where I am now. My equal co-worker just left a month ago and is making 5x what she was making (in a senior capacity to myself) really makes me question myself. Although, I am getting by just fine and living 10 minutes from work is hard to let go.
Well in theory yes, but who knows. I still have a roth and 457 IRA just in case. My state has repeatedly declined cost of living increases for retired state workers for several years now. The gains in the pension system have steadily been above 10% but that has not stopped the state from putting its hands in its pension funds (I am in Louisiana).
I'm all for transparency, but it is easy to get weird results from the current range of "small startup bootstrapping" to "valley darling throwing money" to "high salary with no equity" to "<insert odd thing here>".
I'd love to have a notion of what the real work rates and long-term rewards our for our industry, but it's so hard.
Also, I note that nobody here is sticking their username next to their salary and equity stakes. :P
It's a function of company size. You can get North of $300K + options from the larger valley companies if you're good at what you're doing (though they will attempt to lowball you and they definitely discourage you from sharing that bit of info with your colleagues), somewhat less than that at smaller companies (but if there are options involved you'll get a larger chunk of a (much) smaller pie).
At even smaller companies you can be co-founder with substantial risk and associated rewards if it works out well. It's basically a risk management issue, if you don't want a lot of risk and a reasonably high pay with a potential upside you can't beat the giants, if your needs are small and you can deal with the occasional loss it may pay off to gamble.
>>The business is modestly successful. I have a particular number in mind for it, which I’d be crazy to quote publicly prior to selling it, for the same reason that you’d be crazy to quote your desired salary in a salary negotiation. If a buyer pitches me on 2X my desired number I will, naturally, say “That’s an interesting number. If you were offer insert 2.2X here I think we’d have a deal.” No buyer will pitch 2X if they know what X is, though.
There is sufficient information there for a buyer to calibrate to some extent what X is from the author's response, assuming (a) the offer is reasonably close to 2X and (b) the author displays no unreasonably nonlinear discontinuities in emotional state as the offering price is varied.
@Patio11, I met you once on a trip to Tokyo. When/why did you decide to live in Tokyo other than the fact that your wife is Japanese? Any takeaways in terms of culture and operating a SaaS business from that region?
We live in Tokyo, as opposed to Ogaki, because a) my wife did not enjoy living in Ogaki due to social isolation and b) we recently greeted a daughter in October and were worried about the sociocultural implications of her growing up in Ogaki.
We live in Japan, as opposed to the US, mostly because I've been there for my entire adult life and kind of enjoy it. We might at some time decide to split our time between the US and Japan.
But can we apply this to the skills we'll need for starfighters.io? It's very easy to point to money (or even companies) lost by data breaches and say "I can help you prevent this", but the money you save may be whatever they pay for breach insurance or it may be literally everything they own. Case studies and deliverable targets (+millions of dollars from SEO and stuff) are really great when they're positive, but how do you negotiate this when you're selling protection against income loss?
Part of my background was doing and selling security engagements. Up until a few years ago, it was difficult to get senior leaders to wrap their head around security being anything but a cost center - even though it was always framed as "savings". That has changed in the past year alone. CiSO's are still hounded daily about security products which will "save money / prevent theft" - but the risk to the business is now clear to leaders without security background. I still believe the adage [paraphrased] "People don't pay for the prevention, they pay for the cure"
Been there - started with $10/hr many years ago. Back then I didn't realize that all it takes to triple or quadruple my income would be as simple as asking for it - seriously. Although, it was always parallel to changing clients. So go for it, find a new client and ask 3-figure. Oh, and yes, I live in a poor country...
I wonder if you could have all interviewers fill out a brief survey and give the results candidates for reference - e.g. checkboxes of:
* This interviewer is comfortable talking about their salary
* This interviewer is comfortable talking about diversity and equality efforts
* This interviewer is comfortable talking about the visa and immigration process
* This interviewer had children during employ and is comfortable talking about the process
As an interviewee, knowing that I could ask direct questions instead of skirting around issues due to trying to be sensitive would drastically improve the experience.
One thing I have noticed is that while "wage information" (including equity grants) are taboo and "net worth" is also taboo, "wealth management strategies" (and at times philosophies) are not nearly as taboo amongst the wealthier folks, perhaps because the conversation revolves around relative, rather than absolute, numbers.
I am in support too. The problem is that most companies take implicit advantage of data obfuscation. Some people would ask to be paid more if they only knew.
It is great for employees, but not all companies are ready to do that, and I would guess most would not surive the moment of truth.
That would involve a whole lot of making stuff up, since valuations for privately held tech companies dominate my net worth at for the last ~8 years. They only time you know know what they're worth is when they are sold.
The liabilities side of the balance sheet is less complicated: I owed $22k in student loans at graduation, paid that off, incurred a fair bit of debt back in ~2013 (raided the 2012 tax fund to pay for my wedding and then 2013 ended up being radically less lucrative than expected), and anticipate paying it off this year.
At the end of the day, I have to believe you mentally calculate this net worth line (say, with a conservative 1x ARR on the investments) if you're to the point of talking to accountants about becoming an accredited investor.
Although props if you are conservative enough not to even entertain the thought of counting unhatched chickens. That's responsible, disciplined behavior. The kind that gives you the confidence to go launch Starfighter...
Why? to find out if people with a higher salary have a higher networth?
I don't think it would be very useful, because you'd get people on low(er) salaries who are great at saving/investing and have a high networth, and visa versa
for the longest time i was kind of unnerved by how quickly previous employers said yes during negotiation, so I pushed my price up much higher hoping to have a better footing.
so far they've all said yes to what I considered very high.
Talking about your salary as an employee will eventually take away your negotiating power. If everyone knew everyone's salary, salary would be minimized to the lowest possible market rate, so nobody gets upset.
It's the truth. If you look at countries like Sweden and Denmark where salaries and tax returns are public information, most salaries are all the same.
That's not really because of the tax rates being equal, there are many other reasons. For example, higher education is free, and labor organization is very high. This keeps blue-collar pay closer to white collar, flattening pay structures.
Yes. And I argued that in order to claim that this is what flattens structures rather than the many other factors, you need a control sample that has Scandinavian labor market structure (High tax, free higher education, single payer healthcare) BUT with non-public income. I'm not sure such a country exists.
American politicians are, for very good reasons, defensive about coming off as Socialist (except Bernie Sanders). Coming off as Marxist is completely out of the picture.
But 'patio11 is not a politician and I expect his language reflects strength of feeling more than anything else.
Healthy marxism and healthy capitalism actually look pretty similar. A free market for people, aware of their market value and able to move between employers without artificial restriction looks a whole lot like the proletariat seizing the means of production.
https://twitter.com/CHOBITCOIN/status/594238763880075264 claims MCV co-founder started the talkpay hashtag and she was racist. Notice how only Silicon Valley Americans are participating in the twitter hashtag. This hashtag will only help the shrill feminists, not the women who toil away in hardware factories in China and the outsourcing firms in India.
So basically, a software dev announced a Twitter campaign on a Silicon Valley startup's website. Naturally, it only hits Hacker "News" when some white man placates fellow uninformed ideologues with "I’m honestly troubled by joining a Marxist movement on May Day".
(Translating #talkpay into market theology — is this analogous to how Soviet commissars made bold ideas safe for consumption?)
BTW: May 1st commemorates the Chicago Haymarket affair, where workers went on strike for the 8-hour day. And four anarchists were martyred by the state via hanging.
He links to the MVC article literally in the sixth word of the post. Patrick McKenzie is a very known figure on HN and runs several technology business. I'm sorry but there is nothing about gender or skin color here.
Today with all the shrill American feminism, other women have been denied a voice in this debate and nobody from outside America is posting in that twitter hashtag or blogging about how they are suffering WIT while earning >90k dollars per year.
I had a phone screen with an HR drone once (Cerner Inc. to be exact \waves) part way thru she asked me my current salary. I declined to provide that information. She replied "we can't continue without that information". I replied, I'm sorry, but I won't discuss salary at this point. She said, "good bye" and that was all. I had a job so was not desperate at the time. I was still shocked at how abrupt it was.