4 ms·

I've found, more often than not, when a company takes a hard negotiating position upfront with engineers, it ultimately proves to be penny-wise and pound-foolis

I've found, more often than not, when a company takes a hard negotiating position upfront with engineers, it ultimately proves to be penny-wise and pound-foolish. Many times, what a company "saves" in negotiations is immaterial relative to the hiree's compensation. In exchange, the company immediately begins a relationship with an engineer on a sour note and sends a huge signal about company loyalties and values. I'd recruited an engineer to join my team, and he tells me his comp requirements (90K salary). For the position, we budgeted 96k. A stellar engineer and ideal team fit, I thought he was underpaid at that, but that's what he asked for so I prepared an offer. In preparation, the CEO (who signed off on such things) sets our initial offer to 85K. I was surprised -- why would we not offer the candidate 90k salary? The conversation went something like this: CEO: Offer him 85K. Me: Why? He asked for 90K, and we've budgeted 96K. CEO: I want to leave some room for negotiation. Me: Room? CEO: Yeah. I think we can get him to come down from 90K. Me: You haven't met him yet. Why do you believe he would accept a lower offer? CEO: I never take the first offer at face value. Me: I've talked to him, and he earns 90K in his current position. He doesn't want to take a pay cut. CEO: Well, let's see how much he wants this job. I make the offer, and the candidate responds "I don't want to take a pay cut, and can't accept your offer." The back-and-forth begins, and we finally come to agreement -- at 90K. And while the engineer accepted and joined our team, I could tell that the offer negotiation made him uncomfortable and left a bad taste in his mouth. He did a great job for well over a year, until he left for a new position. He explained to me that he received a better offer, and that the other company was "more inviting". After his departure, the CEO lamented how engineers seem to have no loyalty. Indeed.

lincolnq 15y ago
This is a great story. It illustrates everything perfectly: Why, as employee, you're probably getting played and that you should ask for more money. Why, as employer, it's advantageous to be magnanimous and not lowball the employee. And it illustrates the power imbalance.
- jroseattle 15y ago
  Very prudent. I try to be as straight-forward as I can with candidates, and I insist on honesty from both sides. As a side note, I originally wanted to offer the candidate 96K because I knew he was worth it (more, actually.) But, the CEO decided to press on an engineer who wasn't all that driven by money. A phenomenally poor decision. I resigned from my position at a later date, and our hiring practices were not without consideration.
tnicola 15y ago
It's not always just about the savings. While it may not be the tactic that yields different result than just straight shooting, the concept of negotiation teaches you about the person and the way they deal with controversy and conflict. As a hiring manager I use salary negotiation to learn oodles about the candidate. It was salary negotiation that made him take the second job (or so you think), but what do you think how would that person respond when you (or his peers) disagreed with his approach to development, architecture or other difficult people on the team (assuming that there are some). How did he react in other situations? Don't get me wrong. I think that paying people what they are worth is very important. I recall a conversation with a manager from whom I inherited my team about a potential raise for one of the team members. Me: Claire didn't get a raise in a year a half. Can you tell me why? Former manager: She didn't ask for one. Why would we throw money at people. Me: Because I value her work and given inflation and cost of living, she is technically making less now than she was when we hired her. Former manager: I don't work that way. I don't give raises unless people ask for them. She was let go and I inherited her new team as well. In a nutshell, neotiating initial salary can teach you a lot about the candidate and the way they deal with difficult situations. If we, as managers, don't walk away from the table and hire the person, it is our job to be proactive and pay them what they are worth and what market will bear. And that is what makes loyal employees.
- jroseattle 15y ago
  With certain individuals, I believe that makes sense. My experience with a majority of engineers I've encountered is that the task of negotiation is a necessary evil, but not one they wish to engage in. > It was salary negotiation that made him take the second job (or so you think), but what do you think how would that person respond when you (or his peers) disagreed with his approach to development, architecture or other difficult people on the team (assuming that there are some). How did he react in other situations? Very good question. We certainly conducted code reviews and we had some strong discussions about approaches to problem-solving, in which he was no shrinking violet. For this given individual, he was confident in that type of negotiation (defending development code design.) I believe he wasn't interested in negotiation around compensation because he really was interested in the problem set and opportunity we presented, and was simply trying to keep his cost-of-living steady.
aaronbrethorst 15y ago
I know you can't say, but being another Seattleite, I wish I knew who this CEO is so I can be sure I never work for them.
- jroseattle 15y ago
  This CEO left town, so as long you're hanging around Seattle you're in good shape.

lincolnq 15y ago

This is a great story. It illustrates everything perfectly: Why, as employee, you're probably getting played and that you should ask for more money. Why, as employer, it's advantageous to be magnanimous and not lowball the employee. And it illustrates the power imbalance.

jroseattle 15y ago
Very prudent. I try to be as straight-forward as I can with candidates, and I insist on honesty from both sides. As a side note, I originally wanted to offer the candidate 96K because I knew he was worth it (more, actually.) But, the CEO decided to press on an engineer who wasn't all that driven by money. A phenomenally poor decision. I resigned from my position at a later date, and our hiring practices were not without consideration.

tnicola 15y ago

It's not always just about the savings. While it may not be the tactic that yields different result than just straight shooting, the concept of negotiation teaches you about the person and the way they deal with controversy and conflict. As a hiring manager I use salary negotiation to learn oodles about the candidate. It was salary negotiation that made him take the second job (or so you think), but what do you think how would that person respond when you (or his peers) disagreed with his approach to development, architecture or other difficult people on the team (assuming that there are some). How did he react in other situations? Don't get me wrong. I think that paying people what they are worth is very important. I recall a conversation with a manager from whom I inherited my team about a potential raise for one of the team members. Me: Claire didn't get a raise in a year a half. Can you tell me why? Former manager: She didn't ask for one. Why would we throw money at people. Me: Because I value her work and given inflation and cost of living, she is technically making less now than she was when we hired her. Former manager: I don't work that way. I don't give raises unless people ask for them. She was let go and I inherited her new team as well. In a nutshell, neotiating initial salary can teach you a lot about the candidate and the way they deal with difficult situations. If we, as managers, don't walk away from the table and hire the person, it is our job to be proactive and pay them what they are worth and what market will bear. And that is what makes loyal employees.

jroseattle 15y ago
With certain individuals, I believe that makes sense. My experience with a majority of engineers I've encountered is that the task of negotiation is a necessary evil, but not one they wish to engage in. > It was salary negotiation that made him take the second job (or so you think), but what do you think how would that person respond when you (or his peers) disagreed with his approach to development, architecture or other difficult people on the team (assuming that there are some). How did he react in other situations? Very good question. We certainly conducted code reviews and we had some strong discussions about approaches to problem-solving, in which he was no shrinking violet. For this given individual, he was confident in that type of negotiation (defending development code design.) I believe he wasn't interested in negotiation around compensation because he really was interested in the problem set and opportunity we presented, and was simply trying to keep his cost-of-living steady.

aaronbrethorst 15y ago

I know you can't say, but being another Seattleite, I wish I knew who this CEO is so I can be sure I never work for them.

jroseattle 15y ago
This CEO left town, so as long you're hanging around Seattle you're in good shape.