"Don’t give the first number in your salary negotiation."
Ugh, I get so tired of seeing this. I only see a few situations where this is true:
1) You really have no idea what someone in your position in your area makes.
2) You have no "best alternative", i.e., you really need this job and must take any number they give you.
For everybody else, anchor, and anchor high. You can both prepare the recruiter in advance that you will be expensive and couch the actual number in terms where it's clear you aren't threatening to walk if you don't get it. Research has shown that anchors don't depend on any context to the actual issue at hand, so you just want to state an incredibly large number in some way, doesn't have to as direct as, "I want $2.5M / year in total comp from your company." Hell, you should want them to chuckle a little at your number.
If they anchor low on you, your only option is to reset hard. You have to make it abundantly clear that the number is unacceptable. The less desperate you are for the job, the harder you should rebuff a low number, ideally with a "I wish I had known that's where you were thinking, we could have saved everyone a lot of time."
The point is that if you give a number first, there is now an upper bound on your final salary but no established lower bound. If they give a number first, there is now a lower bound on your salary but no established upper bound. A situation where your compensation can only go up is seen as more advantageous than one where your compensation can only go down.
It's a trade off. If you anchor high you're saving yourself time from the majority of companies that try to underpay you. If you don't anchor, you risk getting your time wasted but eliminate the risk not knowing what you're worth.
If you are a highly in-demand, already highly-paid developer, it is likely in your best interest to anchor high. If you are a junior level and trying to get a middle-level role, it's probably better to not anchor.
i think the problem comes if they put out a lower bound that is way too low, then there is no way for them to accept a much higher salary without looking stupid, so they wont.
"If you give a number in response to this question, that’s going to immediately cap your negotiator range. If you say “My current salary is 90,” then they know that anything above 90 is an improvement to you. Even if they would have been willing to pay, let’s say 110 to the right candidate for this position, they’re probably going to offer you 95 and then walk it up to 98, 100."
The employer is incentivized to pay you as little as they can. We know that many employers pay different people doing the same job different salaries. If you can get them to give their number first, it seems (to me) you're in a much stronger position.
Yes, but this also works in reverse. Wouldn't you much rather the anchor be in your hands? You always say a crazy high number, but you can couch it in terms where its not necessarily the number you are asking for. Anchors work like that.
To make this concrete, if I was a level 5 engineer and I knew total comp was around $300k in the Bay Area, I may say something like, "Well, I have been considering getting back into consulting where I know I can get at least $50k / month, but let's see where we can get here at [tech company]."
Note I wasn't asking for $600k / year, and didn't even say I made that now, I just floated it out there. Boom. Anchor.
Yes, you will get either a chuckle or a "Weeeeeeell" hem-haw. Doesn't matter. Anchor has been set.
Most engineers have internal blocks. They don't believe they are worth $600k / year. Better bet your ass MBAs and sales guys do. And we wonder why they make so much more than us?
I would only add that a big reason not to name a number is that you're guessing at what they might be willing to pay. So even if your plan is to anchor high, you're guessing and you might miss. You might THINK you're anchoring high when you're actually guessing a number that's relatively low in the range of salaries they're willing to pay.
You gain a lot of information by waiting for them to make an offer.
Really hard to actually follow the "book". Each page is far too small, and very hard to find the right link to "next". This would be 1000x more useful as maybe 4-5 pages if not 1.
Now I assume it is like this because you want a bunch of clicks.. but I could not image hunting around trying to find all the content. It is a pretty bad desktop experience. Something 1/4 of the screen is content.. the rest is header, footer, another footer, and maybe a plug to buy your book.
Thank you for the feedback - I appreciate this and it gives me some great ideas to experiment with.
I built it this way just because that's how I think of the negotiation process—a series of discrete steps.
Can you elaborate on why it's difficult to find the "next" link? You mean the breadcrumbs make it hard to find the right link? Or placement on the page is challenging? Both?
Bla bla how to read, let's get to the content, scroll down fast. Woops, went too far, now in footer. Put the content up-front when people arrive.
"PART 1", that sounds good. But that's not a link, even though it's blue (the common colour of links).
Now in part 1.
Should I follow the links in the page, no let's go with 'Next'. This looks a lot like the main page again. It is the main page. I clicked on the word after Next, I should be 'Next'! Why have two links back to your main page after the words 'Next' and 'Prev'?
https://fearlesssalarynegotiation.com/book/salary-structures is basically contentless. Should I click on the links in the page, or on 'Next?' If this is like a "book", I would expect to read it by clicking through 'next', but that misses most of the content. Basically, think about how you want people to navigate through. Do you want people to work through page by page with 'Next', or jump around freely? At the moment it seems I have to swap between the two myself, and try to search out all the content.
Excellent, thank you for your feedback. I've updated the main Table of Contents so that when you click eg "Chapter 1. How companies manage their salary structures", you're taken to the beginning of the chapter's content rather than an overview of the concepts in the chapter. I see how this is better.
Previous and Next are a little trickier to address, but your feedback helps me see how it can be confusing. Thank you!
"Recruiters and hiring managers like to present an offer in terms of “your total compensation package” or “total comp” because that number is usually quite a bit bigger than the base salary. It often includes target bonuses, stock options, etc. I recommend ignoring target bonuses or stock options when you negotiate your salary because the real value of those things is often unknowable."
This actually sounds like bad advice for most companies I've worked with. Many financial companies offer contract-guaranteed 1st year bonus amounts, and there's a strong expectation that in future years, if you're doing even a reasonable job, your successive bonuses will keep growing higher. In big tech firms like Google/FB, you get a guaranteed number of RSUs that vest over 4 years, which sets a floor on your yearly bonuses for at least the first 4 years. For senior employees, this bonus can be just as big as the salary itself.
Ultimately, the only number that matters is how much money you're going to get. Whether this money comes in the form of salary, cash bonus, or RSUs, is mostly irrelevant. It's good to be cynical about any unwritten promises the recruiter gives you. But going to the other extreme and optimizing for base salary, instead of total-comp, is a classic case of optimizing for the wrong metric.
It comes down to pricing a financial instrument. The expected amount of money you will get. You can take risk e.g. contract vs. permanent and startup vs big corp into that calculation, and probability (random bonus vs. almost guaranteed) into account.
Ugh, I get so tired of seeing this. I only see a few situations where this is true:
1) You really have no idea what someone in your position in your area makes.
2) You have no "best alternative", i.e., you really need this job and must take any number they give you.
For everybody else, anchor, and anchor high. You can both prepare the recruiter in advance that you will be expensive and couch the actual number in terms where it's clear you aren't threatening to walk if you don't get it. Research has shown that anchors don't depend on any context to the actual issue at hand, so you just want to state an incredibly large number in some way, doesn't have to as direct as, "I want $2.5M / year in total comp from your company." Hell, you should want them to chuckle a little at your number.
If they anchor low on you, your only option is to reset hard. You have to make it abundantly clear that the number is unacceptable. The less desperate you are for the job, the harder you should rebuff a low number, ideally with a "I wish I had known that's where you were thinking, we could have saved everyone a lot of time."
Negotiating is a game. Have fun with it.