source
So
you’ve maneuvered through the initial offer conversation. You’ve lined
up counteroffers from other companies. Now it’s time to enter the actual
negotiation.
Naturally, this is the part where everything goes horribly wrong.
But
don’t worry. I’m going to turn you into a superhero negotiator. (Or at
least an eccentric billionaire negotiator, which is sometimes better?)
Seriously
though. In this article, we’re going to deep-dive into the negotiating
process, and discuss my final 4 rules on how to negotiate a job offer.
If you didn’t read my first 6 rules, you can read them here (or you can just skip ’em and keep reading):
Right. Let’s start from the top.
What does it take to be a good negotiator?
Most
people think negotiating well is just looking the other person in the
eye, appearing confident, and asking for tons of money. But being a good
negotiator is a lot more subtle than that.
What Good Negotiators Sound Like
You
probably have a friend or family member who’s infamous for refusing to
take no for an answer. The kind of person who will march into a
department store and bullheadedly argue with the management until they
get a purchase refunded.
This person seems like they often get what they want. They make you cringe, but perhaps you should try to be more like them.
Rest
assured, this person is actually a terrible negotiator. They’re good at
being difficult and causing a scene, which can sometimes convince a
waitress or shift manager to appease them. But this style of negotiating
will get you nowhere when negotiating with a business partner (that is,
an employer).
A good negotiator is empathetic and collaborative.
They don’t try to control you or issue ultimatums. Rather, they try to
think creatively about how to fulfill both your and their needs.
So
when you think of negotiating a job offer, don’t imagine haggling over a
used car. Think more like negotiating dinner plans with a group of
friends, and you’ll fare much better.
Slicing up the cake
Another
important difference between good and bad negotiators is that bad
negotiators tend to think of a negotiation as a zero-sum game.
Imagine
we’re negotiating over a cake. In a zero-sum negotiation if I get one
more slice, you get one less. Any gain I make comes at your expense.
This seems obviously true with cake, right? So what makes a job negotiation any different?
Ah,
but it’s not actually true for cake. What if I hate corner pieces and
you love them? What if I really like the cherries? What if I’m full and
you’re starving, but you’ll agree to treat me to my favorite cake next
time?
Of course, when I posed the question I didn’t mention
anything about cherries or my feelings on corner pieces. It might seem
like I just made stuff up.
But this is exactly what good
negotiators do. They bend the rules. They question assumptions and ask
unexpected questions. They dig to find the core what everyone values and
look for creative ways to widen the terrain of negotiation.
While
you were thinking about how to haggle over slices, I’m thinking about
how to give both of us more than just half of a cake.
Different parties in a negotiation almost always have different value functions. We may value the
same
things — we both care about cake, after all. But we don’t value them in
exactly the same way, so there’s probably a way to give each of us more
of what we want.
Most people go into a job negotiation thinking
they need to stubbornly haggle over salary like slices of cake. They
don’t ever stop to ask — hey, what do I actually value? Why do I value
it? What does the company value? Why do they value that?
There are many dimensions to a job negotiation:
- salary
- signing bonuses
- stock
- year-end or performance bonuses
- commuter benefits
- relocation expenses
- equipment
- an educational stipend
- a childcare stipend
- extra vacation time
- a later start date
- getting a dedicated hour a day to work out or study or meditate or play solitaire.
You
could choose which team you’re assigned to, what your first project
will be, what technologies you’ll be working with, and sometimes even
choose your title.
Maybe you’re a frosting person, and the company is more into cherries. You never know if you don’t ask.
Hold onto this mindset.
Okay.
Let’s
pick up the negotiation where we left off. All the offers are in, and
recruiters are eagerly waiting for you to get the ball rolling.
Let’s start negotiating.
Phone VS Email
Your first decision is whether you want to negotiate over the phone, or keep correspondence over e-mail.
Talking
on the phone not only signals confidence, but more importantly, it
allows you to build a strong relationship with your recruiter.
Talking
on the phone enables bantering, telling jokes, and building connection.
You want your recruiter to like you, understand you, empathize with
you. You want them to want you to succeed. Likewise, you want to care
about your recruiter and understand what’s motivating them.
The best deals get made between friends. It’s hard to make friends over e-mail.
However,
if you don’t have confidence in your negotiation skills, you should try
to push the negotiation to e-mail. Written, asynchronous communication
will give you more time to strategize and make it easier to say
uncomfortable things without being pressured by a recruiter.
That
said, recruiters will always prefer to get you on the phone. It’s
essentially their home turf. They’re also well aware that negotiating is
easier over e-mail, and they have little interest in making it easier
on you. They’ll often be vague about the offer over e-mail and only
offer to discuss specific details on the phone.
If you want to
stick to email, you have to push back against this. There’s no secret to
it: just be honest and ask for what you want.
Tell them:
“Hi recruiter, I hope your day is treating you well!
Re:
your previous e-mail, I’d prefer to discuss the details of the offer
over e-mail. I sometimes get nervous during important phone calls, so
discussing the offer over e-mail helps me to keep a clear head and
communicate more clearly. I hope this is okay with you. :)”
No BS, no huff-puffery. Just telling the truth and asking for what you want.
There’s tremendous power in honesty and directness. Take advantage of it.
(Also,
note how I wrote “discuss the details of the offer” rather than
“negotiate.” Never describe what you’re doing as negotiating — that
sounds immediately adversarial and haggley. Describe it instead as a
discussion, and they’re less likely to recoil.)
Having Alternatives
I
mentioned before how essential it is to have multiple offers. I’ll
reiterate again — it’s very, very valuable to have multiple offers.
With
other offers on the table, if your negotiation doesn’t work out, they
know you’ll just accept another offer. Your negotiating position
suddenly becomes a lot more credible because they know you’re willing to
walk away.
This effect is strengthened if you get an offer from a
prestigious company. And the effect goes through the roof if you have
an offer from a company’s primary competitor (now they’ll really want to
poach you from the big bad competitor-corp).
Some of this
behavior is stupid tribalism. And some part of it is rational in trying
to deprive competitors of talent. Either way, take advantage of it, and
be tactical in which companies you aim for.
But what if you don’t manage to get any other offers? Does all the negotiating just go out the window?
Not
at all. What’s important here is not actually having other offers. More
specifically, it’s in having strong alternatives. Which is why
Rule #6 of negotiating is: have alternatives.
A
negotiation needs stakes. If there were no risk and you knew for sure
the other side would sign a contract, what incentive would you have to
offer them anything more?
Your alternatives are what give a
negotiation its stakes. By signaling your alternatives, you allow your
interlocutor to develop a mental model of when and why you’ll walk away
from the negotiation. Your alternatives also have an anchoring effect on
how much the other side thinks you’re objectively worth.
In
negotiation literature, your best alternative is often referred to as
your BATNA (Best Alternative To a Negotiated Agreement). Basically, it’s
what you’d do if you walked away.
I like the term BATNA a lot, mostly because it sounds like a gadget Batman would lob at bad guys.
So what’s your BATNA if you don’t have other offers? Do you even have one?
Of
course you do. Your best alternative might be “interview at more
companies” or “go to grad school” or “stay at your current job” or “go
on sabbatical in Morocco for a few months” (as it was for a friend of
mine who was deliberating between joining a startup and gallivanting
through North Africa).
The point is, you don’t need to have another offer to have a strong BATNA.
Your BATNA’s strength comes from:
- how strong the other side perceives it to be, and
- how strong you perceive it to be.
If
your recruiter thinks that going to grad school is an awesome thing to
do, then they’ll see you as having a very strong alternative, and the
stakes of the negotiation will be raised.
But even if they think
grad school is ridiculous — if you convince them that you’d be totally
happy to go to grad school — then the burden is on them to make this
deal more attractive to you than going to grad school.
Thus,
you need to communicate your BATNA.
This doesn’t need to be ham-fisted, but you need to make it a
background to the negotiation. (Note: usually whenever you signal your
BATNA, you should also re-emphasize your interest in reaching an
agreement).
Examples:
“I’ve received another
offer from [OTHER CORP] that’s very compelling on salary, but I really
love the mission of [YOUR COMPANY] and think that it would overall be a
better fit for me.”
“I’m also
considering going back to grad school and getting a Master’s degree in
Postmodern Haberdashery. I’m excited about [YOUR COMPANY] though and
would love to join the team, but the package has to make sense if I’m
going to forego a life of ironic hatmaking.”
Note:
one of the biggest mistakes I see here is from people who are currently
working. If you already have a job, staying where you are is often your
BATNA.
This means if you tell your interlocutor that you hate your
job, then they know your BATNA sucks, and have no incentive to
negotiate with you (on top of potentially thinking that you’re a
negative person). Always emphasize the pros of your current company,
your seniority, your impact, and whatever else you like about where you
currently work.
You should make your decision seem like a genuinely difficult one — then it will appear to be a strong BATNA.
What a Job Negotiation Means to an Employer
I’ve
kept saying that in order to be an effective negotiator, you need to
understand the other side. So let’s take a look at what it’s like to
negotiate as an employer. (I’m going to have to use the tech industry in
my examples here, but the details will differ by industry.)
First,
we have to rewind and understand what brought us to this offer in the
first place. What kind of resources have they spent so far in trying to
fill this position?
- Writing and posting a job description on all appropriate channels ($300)
- Reviewing ~100 or more resumes ($1,250)
- About 15% of those resumes need to be phone screened, so roughly 15 phone screens ($2,250)
- Around 75% of those initial phone screens warrant a technical screen, so roughly 11 technical screens ($9,000)
- About 30% pass through to an on-site, so roughly 3 onsites. These onsites require the coordination of 6–7 employees ($10,800)
- Finally,
they make one offer. The recruiter (and potentially the executive
staff) need to spend time on the phone with the offeree convincing and
negotiating. ($900)
Numbers nabbed from
here.
All-in-all this process took about 45 days from start to finish.
Now
say you end up turning down their offer. They’ve spent over $24,000
just extending this single offer to you (to say nothing of opportunity
costs), and now they’ll essentially have to start over from scratch.
This is what a company faces if you turn them down.
Realize what a gauntlet they’ve been through!
Realize how important it is that you’re the one!
Out of the droves and droves who’ve shown up on their doorstep,
you’re
the one they want. They want to usher you into their tribe. They went
through so much crap to get you here, and now they’ve found you.
And you’re worried that if you negotiate, they’ll take it away?
Further
yet, understand that salary is only one part of the cost of employing
you. An employer also has to pay for your benefits, your equipment,
space, utilities, other random expenses, and employment taxes on top of
all of that. All-in,
your actual salary often comprises less than 50% of the total cost of employing you.
Which
means they expect that your value to the company — in terms of the
revenue you’ll generate — to be more than 2x your salary. If they didn’t
believe that, they wouldn’t be hiring you at all.
So, this is all to say: everything is stacked in your favor. It doesn’t feel that way, but it absolutely is.
Realize
that, while you are agonizing over whether to ask for another few
thousand dollars, they’re just praying with bated breath that you’ll
sign the offer.
If you don’t sign the offer, they lose. Losing a
good candidate sucks. No one wants to believe that their company isn’t
worth working for.
They want to win. They will pay to win.
And
yet, you might worry: “but if end up negotiating more, won’t they have
higher expectations? Won’t my boss end up hating me for negotiating?”
No, and no.
It’s
your role that will determine your performance expectations, not how
much you negotiated. Making 5k more or less in salary doesn’t matter at
all. Your manager will literally just not care about this.
Remember
how expensive it is to even employ you in the first place! Nobody’s
going to fire you because you’re performing 5K worse than they expected
you to. The cost of firing you and hiring someone else is a lot more
than 5K to begin with.
And no, your boss won’t hate you now. And
in fact, at most big companies the person you’re negotiating with won’t
even be your boss. Recruiting and management are totally separate
departments, completely abstracted from one another. And even if you’re
at a startup, trust me that your boss is used to negotiating with
candidates and doesn’t place nearly as much significance on it as you
do.
In short: negotiating is easier and more normal than you
think. Companies are completely willing to negotiate with you. If your
intuition tells you otherwise, trust that your mental model is wrong.
How to Give the First Number
In
part 1,
I mentioned how valuable it is not to have to give the first number.
But there are times when you just can’t avoid it. In these situations,
there are ways to give the first number without actually giving the
first number.
If a company asks you “what are your salary expectations?” you might say:
“I
don’t have any particular numbers in mind. I’m more interested in
learning whether this will be a good mutual fit. If it is, I’m open to
exploring any offer so long as it’s competitive.”
Sounds
good. But they push back, “I understand that, but we need to have a
clear idea of what you think is competitive. I need to know whether it’s
worth going through the interview process. We’re a young startup, so I
need to make sure we’re on the same page as far as compensation.”
That’s a strong push. But you can still push back.
“I
completely hear you, and I agree it’s important that we’re on the same
page. I really have no particular numbers in my head. It all depends on
the fit and the composition of the offer. Once we decide we want to work
together, I think that’s the best time to figure out a compensation
package that makes sense.”
Most employers will relent
here. But there’s a small chance they push further: “Okay, look, you’re
being difficult. Let’s not waste each other’s time. What’s an offer that
you’d be willing to take?”
This is a decision point. They’re trying to take away your negotiating power and pin you to a premature decision.
That said, you probably will have to say a number at this point, or risk damaging the trust in this relationship. (They
are
making a valid point that startups can’t offer the same kind of cash as
large companies, nor should you expect them to. They might be sensing
that you’re not aware of this.)
But you can give a number here without actually giving a number.
“Well,
okay. I know that the average software engineer in Silicon Valley makes
roughly 120K a year in salary. So I think that’s a good place
to start.”
Notice what I did here. I didn’t actually
answer the question “what’s an offer you’d be willing to take,” I merely
anchored the conversation around the fulcrum of “the average software
engineer salary.”
So if you’re forced to give a number, do so by
appealing to an objective metric, such as an industry average (or your
current salary). And make it clear that you’re merely starting the
negotiation there, not ending it.
How to Ask for More
An
offer is out there, and now you want to improve it. As always, be direct
and ask for what you want. Here are generally the steps you should
take.
First, reiterate your interest in the company. This is as
simple as “I’m really excited about the problems you guys are working on
at Evil Corp…”
Now frame why you’re asking for more. There are
two choices here: you can say that you’re on the fence and that an
improvement might convince you, or you can go stronger and say that
you’re outright dissatisfied with the offer. Which approach you choose
depends on how much leverage you have, how weak the offer is relative to
your BATNA, and whether you have other offers (the weaker your
negotiating position, generally the more tentative you should be).
Either way, be unfailingly polite.
If
you’re dissatisfied with the offer, you might say something like “I
appreciate the work you guys put into constructing this offer. But there
were a couple things I was unsatisfied with.”
If you want to be more reserved, you can say something like:
“The
offer you guys extended was strong. Right now my decision is basically
between you and [XYZ CORP]. It’s a genuinely difficult decision for me,
but there are a couple of dimensions where if this offer improved, it
would be much more compelling.”
Don’t just say something
like “Thanks for the offer. Here are some ways I think it could
improve.” This makes you sound like an ass. Be polite, and if you want
to strengthen the offer, tell them clearly how you feel about it. This
builds trust and conveys seriousness.
Let’s say you want to raise the salary. Now that you have a specific ask, it’s time to employ
rule #7: proclaim reasons for everything.
We
all implicitly know the catch-22 of negotiation: if you say you want
more salary, you’ll sound greedy. And no one likes greedy people, right?
So why would they want to give more money to a greedy person?
I suspect this is the primary reason why so many candidates recoil from negotiating. They don’t want to
feel
greedy. It goes against all of their social conditioning. And yet,
there are some situations in which most people would be totally fine
negotiating.
Specifically,
when they have to.
If you
had
to raise your salary or you wouldn’t be able to afford rent, or if you
had to negotiate health insurance to cover a medical condition, you’d
negotiate without a twinge of regret. The difference? That you have a
reason for what you’re requesting.
It’s
kind of a brain-hack, both for yourself and for your negotiating
partner. Just stating a reason — any reason — makes your request feel
human and important. It’s not you being greedy, it’s you trying to
fulfill your goals.
The more unobjectionable and sympathetic your
reason, the better. If it’s medical expenses, or paying off student
loans, or taking care of family, you’ll bring tears to their eyes. I
told employers that I was earning-to-give, so since I was donating 33%
of my income to charity, I had tonegotiate aggressively to leave myself
enough to live off.
But honestly, even if your reason is inane and unimpressive, it will still carry this effect.
Just
saying “can you improve the salary?” sounds like you’re boringly
motivated by money. But if you say “I really want to buy a house within
the next year; what can we do to improve the salary?” This suddenly
seems a lot more legitimate.
If they turn down your request now,
they’re implicitly telling you “No, Jennifer, you can’t buy your house. I
guess you don’t deserve one.” No one wants to do that. They want to be
the one who says, “All right Jennifer, I talked with the director and I
made it happen. You’re getting that new house!”
(Of course, it goes without saying that you want money so you can spend it on things. I know. It’s stupid. But it works.)
Just go with it, state a reason for everything, and you’ll find recruiters more willing to become your advocate.
Assert your Value
One
effective move you can make in a negotiation, especially after an ask,
is to emphasize the unique value you’ll be bringing to the company.
Example:
“Blah blah blah, I want X, Y, and Z.
I
know that you guys are looking for someone to build out your Android
team. I believe I bring a lot of experience leading a team of Android
developers and I’m confident that I’ll be able to bring your mobile
offerings up to parity with your competitors.
Let me know your thoughts.”
Be
confident without boasting or trying to hold yourself to specific
metrics (unless you’re supremely confident). Whatever you assert should
be something you’ve touched on earlier in your discussions. But it’s
okay to repeat it now as a gentle reminder. It reminds them of the
carrot, and shows that you’re still excited to add value.
This is
not appropriate in every negotiation, especially for very junior
positions, where it’s harder to differentiate yourself. But later in
your career (or for more specialized/consulting roles) this can be a
really valuable nudge.
What to Ask For
This brings me to
rule #8: be motivated by more than just money.
Note, this is not code for “if you seem like you’re motivated by more than just money, you’ll get more money.”
There
is no bigger turn-off to a company than somebody who only cares about
money. This is something you’re not going to be able to fake.
Actually be motivated by other things.
You should be motivated by money, too, of course, but it should be one
among many dimensions you’re optimizing for. How much training you get,
what your first project will be, which team you join, or even who your
mentor will be — these are all things you can and should negotiate.
Among these factors, salary is perhaps the least important.
What do you really value? Be creative. Don’t try to haggle over slices of cake when there’s so much more on the table.
Of course, to negotiate well you need to understand the other side’s preferences. You want to make the deal better for
both of you. That’s why
rule #9 is: understand what the company values.
How do you figure this out? Well, there are a few good rules of thumb.
First, salary is almost always the hardest thing to give, for a few reasons:
- It must be paid year after year, so it becomes part of a company’s long-term burn rate.
- It is almost always the thing that people gossip about, so paying someone significantly more salary can cause unrest.
- It tends to be the most tightly constrained by pay bands, especially at large companies.
So
if you want more financial compensation, you should think about
structuring as much of it as possible outside of salary. A signing
bonus, for example, is easier to give than salary. A signing bonus has
the advantage of only needing to be paid once. It gets the candidate
excited about joining (because everyone likes wads of cash), and it’s
generally not as public.
Remember that you can always get salary
raises as you continue to work at the company, but there’s only one
point at which you can get a signing bonus.
The easiest thing for a
company to give though is stock (if the company offers stock).
Companies like giving stock because it invests you in the company and
aligns interests. It also shifts some of the risk from the company over
to you and burns less cash.
If you are genuinely risk-neutral or
early in your career, then you should generally try to assume as much
stock as possible. If you aggressively trade cash for stock, you can end
up with a higher expected value offer (albeit with higher risk).
A Brief Primer on Equity
You
can skip this section if you’re already pretty familiar with how equity
works. I’m going to speaking to the totally uninitiated here, because
too many people get swindled when it comes to valuing stock.
First, understand there are two completely different classes of companies: public companies and private companies.
If the company is public (i.e., it has IPO’d and is listed on the stock market), then its stock is as good as cash.
You
will usually be granted RSUs (Restricted Stock Units), which are just
shares like you can purchase on the stock market. Once these shares vest
(that is, are released to you), you can turn around and sell them on
the stock market. This is how they turn into money.
If the company is private, then things get a lot more complicated.
For
private companies, most of the time they will not actually issue you
stock grants. Usually, they will issue you stock options. An option is a
pre-agreed right to purchase shares of stock at a frozen price.
It’s
important to note that when you want to leave a company, if you have
options, your life becomes really complicated. You may have to pay a
bunch of money to actually exercise your option (that is, buy your
pre-agreed upon stock at the previous frozen price, or risk losing it),
with no way to actually sell it yet. The only way to truly liquidate
your options is when the company IPOs or is acquired. And many companies
don’t ever do this.
Thus, options are very risky. It’s easier to
get screwed by options, especially on tax implications. For a lot more
information, see
this post by Scott Kupor of a16z.
Equity Shenanigans
Many companies will try to play mind games with you when it comes to equity. Several companies pulled these on me.
A
common one is presenting the total value of the stock grant rather than
the annualized value, despite the stock not vesting evenly, or vesting
over 5 years instead of the standard 4.
But the most egregious
thing that companies will do is tell you absurd stories about the value
of their stock. They’ll say: “okay, we’re worth this much now, but at
the rate we’re growing, we’re going to be worth 10X that in a year. So
really, the value of your options is many millions of dollars!”
To
not mince words: this is cynically dishonest BS. Don’t buy it even for a
second. I got this a few times, and the only reason I didn’t walk away
from the offer immediately was because it was always a recruiter pulling
this crap. If it was a manager I would’ve turned down the offer
outright.
Here’s why this is infuriatingly stupid: a company’s
valuation is determined by investors. These investors see the financials
and the growth rate of the company, and invest at a price that
reflects the current growth rate of the company.
In
other words, they invested at a valuation that already took their 10x
growth rate into account. Investors are not idiots. And unless you (or
your recruiter) think you have privileged information or insight that
the company’s investors don’t, you should probably take the investors’
word for it.
Also, a company’s nominal valuation is almost always
inflated due to preferred shares, debt, and survivorship bias. But let’s
ignore that for now.
So if a company gives you this hock of crap,
fire back and tell them thank you, but you’ll be considering the stock
at the same valuation their investors valued it at.
I mean, be nice. But don’t let them try to strong-arm you into accepting this garbage.
A
job is not a suicide pact. Choose a company that is judicious and
transparent, and you’ll be much more likely to find yourself respected
and taken care of.
Other things you can ask for
Because I’d be remiss if I didn’t point out a few other things.
Relocation expenses often come out of separate budgets at big companies, so this is generally very easy to get.
Look
for creative benefits that would be particularly valuable to you. Maybe
it’s covering your commuter expenses, asking for dedicated volunteer or
learning time, getting sponsored for conferences, or even charity
donation matching.
Don’t assume anything’s off the table until you’ve tried bringing it up.
That
said, don’t throw the entire kitchen sink at them. A negotiation can
quickly become cumbersome for an employer if you bring up a litany of
changes. Keep the changeset as pithy as you can.
Negotiating Jiu Jitsu
Recruiters
love trying to trick you into ending the negotiation early. They’re
going to do this relentlessly. Don’t fault them for it — I suspect they
can’t help themselves.
Just keep breaking out of their
shenanigans. Don’t let yourself be pressured into ending a negotiation
until you’re actually ready to make a final decision.
This is
especially grave if you have multiple offers, and you let one company
pressure you into canceling the others. Companies succeed in doing this
all the time, so I want to equip you with the skills to jiu jitsu out of
these techniques.
Here are two situations you can break out of.
These are both real situations that happened to me during my
negotiations, though the numbers and details are invented.
Situation 1:
I
ask for a 10K increase in signing bonus. The company gets back to me
and says, “That’s really tough for us to do. I’m going to try. I think
you’re worth it. But I can’t really go to my boss and fight for you
unless she knows you’re going to sign. Are you going to sign if I get
you that 10K?”
You should be thinking: ah, this person is trying to force me to a decision point and take away my negotiating power.
I
respond, “Okay, so what I’m hearing is that you’ll have to expend some
personal reputation to get me a 10K bonus. If you end up going to bat
for me, are you confident you’ll be able to get that 10K?”
“I
think I can, it just comes down to you Haseeb. If you’re serious about
joining us, then I’ll go fight for you. But I need to know for sure
you’ll sign.”
Great. Time to jiu jitsu.
“That makes sense.
Unfortunately I can’t commit to signing yet; I’m not yet at the stage
where I can make a final decision. Like I told you before, this weekend
I’m going to sit down with my family and talk things over with them.
Choosing the company I’m going to spend the next few years at is a
commitment I take really seriously. So I want to be sure I’m making a
well-considered decision.
“But since you’re confident that you can
get an extra 10K, let’s do this instead: in my mind, I’ll pretend this
offer is [X + 10K] and as I’m considering my final decision, that’s
where I’ll value it. I know it’s tough for you to go and get that from
your boss, so I don’t want you to do that until I’m certain I’m going to
sign.”
They then vaguely recant and promptly get approval for the 10K bonus.
Situation 2:
I
ask for a 20% increase in stock package. The hiring manager, knowing
that I’m negotiating with other companies, then fires back: “I want to
get this stock package for you. And I know I can, we’ve got the budget.
But before I do that, I need your word on something.”
“What’s that?”
“I
need you to give me your word that if I improve your offer, you’re not
going to just turn around and take our counter-offer to
[COMPETITOR_COMPANY] to improve your offer with them.”
You should be thinking: so basically they’re asking me not to negotiate.
“Let
me see if I understand what you’re saying. You are willing to improve
my offer, but only if I agree that I won’t tell [COMPETITOR] what you’re
offering me. Is that correct?”
“Well no, I can’t legally do that.
What I mean is… what I mean is, look. I like you. But if I improve your
offer and you just take our offer to [COMPETITOR], you’ll be violating
my trust.”
“Okay, let me be sure I understand you here. If you
give me this offer and I tell [COMPETITOR], I will be violating the
trust under which you’re granting me this improved offer. Is that
correct?”
“Uhh… Look. How about this. In my mind, I’m going to go
get you this stock package okay? And in my head, I’m going to do it with
the assumption that you’re the kind of person I think you are, and
you’re going to consider our offer in its own right and not just shop it
around. Fair enough?”
I nod. He gets the improved offer. I continue to negotiate. Antics averted.
(In case you’re wondering, if he had said “yes,” I would have turned down the proposal.)
The Path to Signing
It’s
not enough to just continually ask for stuff. Companies need to sense
that you’re actually moving toward a final decision, and not just
playing games with them.
Your goal in a negotiation is not to be
difficult or elusive. True, you should assert your value and carefully
consider your options, but you can do so in a way that’s respectful and
considerate toward the companies you’re talking to.
Don’t go dark on people. Be open and communicative. I keep saying be honest and I mean it — be honest.
Aside:
I keep talking about honesty, and you might protest that this is
antithetical to my earlier rule of “protect information.” It’s not.
True, you should protect information that might weaken your negotiating
position, but you should be as communicative as possible about
everything else (which is most things).
Negotiating is all about relationship, and communication is the bedrock of any relationship.
This brings me to the final rule,
Rule #10: be winnable.
This is more than just giving the company the impression that you like
them (which you continually should). But more so that you must give any
company you’re talking to a clear path on how to win you. Don’t BS them
or play stupid games. Be clear and unequivocal with your preferences and
timeline.
If there is nothing that a company could do to sign
you, or you don’t actually want to work for them, then don’t negotiate
with them. Period.
Don’t waste their time or play games for your
own purposes. Even if the company isn’t your dream company, you must be
able to imagine at least some package they could offer you that would
make you sign. If not, politely turn them down.
It costs each
company money to interview you and to negotiate with you. I didn’t
negotiate with every company I received an offer from, but if there was
one key mistake I made in my job search, it was that I still negotiated
with too many (in large part because I didn’t think my job search would
be successful).
Making the Final Decision
Okay, it’s decision time.
(Yes, you do have to make one.)
Three things to keep in mind here:
- be clear about your deadline
- assert your deadline continually
- use your final decision as your trump card
When
you start negotiating, you don’t have to be clear about your timeline
because you probably don’t have one yet. But once you get into
intermediary stages, you should set for yourself a deadline on which
you’ll sign. It can be for an arbitrary reason (or no reason at all),
but just pre-committing to a deadline will allow you to negotiate more
clearly and powerfully.
“A weekend with the family” I found works
nicely, as it has the added benefit of roping other decision makers in.
Then when companies push you to end negotiations early, you can
re-assert this deadline.
Companies should all be totally aware of
when you’re going to make your decision. This will raise the stakes and
galvanize negotiations as the deadline approaches.
This deadline
also lets you defer your decision while still improving offers. Your
narrative should basically be “I want to see the strongest offer your
company can muster. Then I will go into my cave, meditate for 10 days,
and when I emerge I will have decided in my heart which company to
join.” This gives you enormous power to avoid any on-the-spot decision
points or premature promises.
Eventually, deadline day will come.
Try to make this a business day (say, a Friday or a Monday) so that you
can communicate with recruiters during this day. If a hail mary is going
to happen, it’ll happen here.
Even if there’s only one company in the running, you should always
always
wait until the last day to sign your offer. Yes, even if you’re certain
you’re going to sign and even if it’s your dream job. I’ve seen many
scenarios in which offers spontaneously improved as deadlines
approached, or a fallen player gets up and presents you the holy grail
in the 11th hour. Either way, there’s no harm.
Finally, your trump card. Save this for the very end. Your trump card is these words:
“If you can do X, I will sign.”
Note,
this is NOT “If you give me X, the offer will be more compelling blah
blah blah.” We’re past that. It’s time to make a promise.
Every
company that’s still on the table, let them know what it would take to
sign you (unless there’s nothing they could do). And when you make the
final ask, don’t forget reason-giving, even if it’s the same reason as
before!
“Hi Joel, I’ve been thinking it over and it’s
genuinely a really tough decision for me. I loved everyone at [COMPANY]
but the one thing that makes it hard for me is the salary. As you know
I’m trying to pay off my student loans so salary is really important to
me right now. If you can improve the salary by 10K a year, then I’ll be
totally ready to sign.”
With luck, they meet you half-way. Or, with a little more luck, they’ll meet all of it.
And
just because I know someone will ask — yes, once say you’re going to
sign, you should always sign. Never go back on your word. It’s a small
world. People talk. These kind of things will come back to haunt you.
(More importantly, never go back on your word because you’re the kind of
person who never goes back on their word.)
Tell all of the other
parties that you’ve made your final decision. Thank them for the
negotiation. If you did it well, they’ll usually thank you back, tell
you to keep in touch, and to reach out again in a couple years next time
you’re on the market.
Many
of the words we see are simply there for grammatical purposes (the, a,
an). They don’t provide you with the same kind of meaning as words like
“university”. We have to minimize subvocalization in order to boost our
reading speed. Why do we have to do this? Because subvocalization limits
how fast we can really read.