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The Software Engineer’s Guide to Negotiating a Raise

303 points by mgadams3 11y ago

richerlariviere 11y ago
Your article is quite interesting. Only one thing annoyed me: the text color doesn't contrast enough with the background, making your article difficult to read. It seems to be your first article on this blog this is why I wanted to give you this advice. Keep working hard.
- mgadams3 11y ago
  Thanks, great suggestion. I've adjusted it to have a stronger contrast.
  - richerlariviere 11y ago
    It's better now :)
deleted 11y ago
[deleted]
meesles 11y ago
I hardly ever post, but I had to for this one: your post is riddled with typos. Useful information, but the mistakes were quite distracting. Proofread before publishing please!
- mgadams3 11y ago
  You were totally right, thanks for the heads up so I could fix them :)
- kenshiro_o 11y ago
  It's still very readable to me. I'd definitely proofread more if I were him but no need to be so harsh (I don't know if English is his first language). It was overall a long and well written post, with a clear structure and insightful content. Also, the article could have been spotless grammatically speaking but utterly uninteresting - I would certainly enjoy the opposite more. The message is more important than the technique at the end of the day.
s73v3r 11y ago
Step One: Go find a job at a competing firm, because that's the only way you'll get a meaningful raise.
- lambdasquirrel 11y ago
  I can't agree with this more. As much as I sympathize with entrepreneurs and managers having trouble hiring engineers in this current environment, I feel like "they" brought it on themselves because wages were probably below what they should've been for years, and because of that, supply became depressed. Now that a lot more infrastructure and tooling is in place, we're seeing the effects of that prolonged depressed supply. It's easy (relatively) to hire junior devs, and much harder to hire senior devs. And even still, I talk to senior devs who have trouble getting a raise. I'm like... ok... well I hear X is hiring.
  - vonmoltke 11y ago
    > I can't agree with this more. As much as I sympathize with entrepreneurs and managers having trouble hiring engineers in this current environment, I feel like "they" brought it on themselves because wages were probably below what they should've been for years, and because of that, supply became depressed. Correction: they are below what people of the quality they want are willing to work for. There are plenty of engineers willing to work for those salaries; the vast majority get rejected. Whether these entrepreneurs and managers actually need the level of quality they are seeking is a subject for a different religious debate.
    - fweespeech 11y ago
      > Whether these entrepreneurs and managers actually need the level of quality they are seeking is a subject for a different religious debate. I'd say its more accurate to say "The quality of engineers isn't effectively determined in most hiring processes."
  - sanderjd 11y ago
    What I don't understand is that the X that is hiring likely also has a bunch of senior devs who are having trouble getting a raise. It would be far more efficient to give raises to current employees who already have expertise at the company than to hire externally.
ryanackley 11y ago
Seems like solid advice. One challenge in asking for a raise at larger companies is it can be difficult to find someone who can actually authorize a raise. A lot of times your manager is a tech lead and his manager has no budgeting responsibility.
- vosper 11y ago
  This is an excellent point. Additionally, even if you do find out who can give you a raise, it may be impractical to get due consideration. I've experienced a situation where the CEO of the (large, listed) company personally reviewed all compensation changes and hiring offers. He was so busy (doing CEO stuff, presumably) that he'd often miss meetings with his direct reports (no-one would even know what city he was in) so imagine what it was like trying to get a resolution for an underpaid engineer on your team. After a while of repeating "we're working on it" you start to look either disingenuous, ineffective, powerless - or all of those. Edit: a word
  - dpweb 11y ago
    That's interesting. I was in a small/mid size co. where the CEO had to approve all raises. I would think it makes more sense to have bands for each position and only hiring or going outside those bands would need approval.
- orborde 11y ago
  I have little experience with this matter, but it seems like the correct answer here is "get a job at another company that doesn't have broken procedures that render them unable to authorize paying for the people they need."
secfirstmd 11y ago
Complementary reference: Negotiation Advice from Silicon Valley :) https://www.youtube.com/watch?v=N6Zz-Nkkaxc https://www.youtube.com/watch?v=N6Zz-Nkkaxc
- mgadams3 11y ago
  One of my favorites!
- deleted 11y ago
  [deleted]
TTPrograms 11y ago
Question to HN: How do you negotiate for a raise when cash value is below market rate but plausible equity value goes moderately above (risk adjusted)? It seems that in the negotiation you have to take a pessimistic view regarding company outcome. Or would you negotiate for higher equity instead of salary?
- vosper 11y ago
  Market rate doesn't matter - what matters is what you can negotiate. The idea that you can swap one $120k engineer in for another is a ridiculous story that employers tell their staff, usually to avoid a discussion about salaries. What matters is how much added value you bring to the company. The difference between your value and your salary is (in some sense) the profit that the company makes on you. Further, is it your assessment that the plausible value of the stock brings you in just above market rate, or your bossess? Even if they're right, why be happy getting a bit over market rate, if you think you could get more?
- npkarnik 11y ago
  First decide why you want the job. There are good reasons to work at an early-stage startup, the pace of work will stretch your capabilities exponentially more than a stable job will (from personal experience). The skills I developed working at a startup were worth more in hard $$ after I left than I made working there. If your primary motivation is financial, you need to think carefully. You are taking an irrational and outsized risk as an early employee if cash compensation is below market. But people play negative expected value games all the time at the casino. Even if the expected value of the equity is "above" market, the variance on that projected equity is significantly worse for you than getting it in cash. Either way, you should push for roughly market cash compensation, framing it as "your expectations." I have said these exact words before: "The salary figure is definitely below my expectations (which is $___), I'm worried this won't work out." And then pause to get more information from them. Remember, your expectations are framed by your alternatives, which makes it easier to walk away. Best thing is to have another offer, if you don't it's not the end of the world though. They still have to fill the position, which is leverage for you.
- s73v3r 11y ago
gshx 11y ago
It's a good post. One thing great companies get right, is to value the engineers that are working on the codebase. If an engineer is or feels under-paid and they get a competing offer, it's already too late to try and retain them. There's always someone out there that can/will pay 10 or 20% more, so, expecting to retain top engineers at the 70th percentile salary is going to be a futile exercise.
- rokhayakebe 11y ago
  One thing great companies get right, is to value EVERYONE, regardless of their position.
  - gshx 11y ago
    Completely agree though as history has taught us, socialism doesn't scale very well. Better results merit better rewards. The term "Rewards" is broader than monetary benefits. Holds true not just for individual performance but also collective performance at a higher abstraction of entity - team, org, company, city, state, country, etc.
    - collyw 11y ago
      And capitalism is doing such a fine job of scaling at present?
- rando289 11y ago
  > it's already too late to try and retain them This directly conflicts with the most upvoted advice to go get a competing offer. I've read this before too. Is a company really going to think "he's talked to another company, we can't trust him to stick around." ?
dpweb 11y ago
I would downplay 'market rate'. That's fine for commodities. Are you a commodity? You are in a certain role and that does put you in a range of how much value you are adding/are capable of adding (although at a startup this would be a wider range than an established co.) Your only justification for an increase is that you are adding more than you're currently being compd for. There's other factors too, perks, travel demands, how fulfilled you feel, how much you like/hate your boss. You can determine what you are happy with and accept that, but if you can't get it, think about leaving if you can get more elsewhere. But don't stress too much about - am I getting 100% of what I could get. Know that - that doesn't define your worth as a person - and there are many people making much less than you, and many making much much more. Some of them incompetent. Are you happy is the question.
- npkarnik 11y ago
  I've always framed it as "the market rate for me." The nice thing is that things like Hired and AngelList actually let you put a $$ figure on it.
saryant 11y ago
I was recently on the job market and read Secrets of Power Negotiating by Roger Dawson. I'm relatively inexperienced and that book gave me a huge confidence boost. I can directly attribute 15% of my compensation to reading it. Even just the "flinch" he talks about netted me an extra 5k right off the bat. I had always been too afraid to directly ask "what is the compensation range for this position?" but now I ask exactly that, forthrightly and without confrontation. Nobody refused to answer.
- balls187 11y ago
  > I had always been too afraid to directly ask "what is the compensation range for this position?" but now I ask exactly that, forthrightly and without confrontation. Nobody refused to answer. My opinion is you should just ask for what you want, rather than asking what the compensation range is. You will get an answer, but you're unlikely going to get an actual meaningful band.
  - eropple 11y ago
    I disagree on this, but with a caveat. The "top" of the band is usually 10-20% below their actual top, and I can triangulate from there.
    - saryant 11y ago
      Yeah, that was what I was assuming as well. I would ask the range, they'd give one, I'd flinch at the top-end of it and inevitably they'd come up 5%ish percent right away. From there I was generally able to wind up 10-20% above top of the original band.
harryh 11y ago
As a manager of engineers I would add one thing to this generally good advice: After you negotiate the raise, make sure you live up to it. If you kick ass at your job, your manager will very rarely worry too much about what they're paying you, they'll just be thrilled to have you on the team. But if you're not living up to the high expectations you set for yourself then they're really going to regret paying you that extra 5k (or 10k or 20k or whatever).
- Tehnix 11y ago
  This is actually the reason that I prefer changing jobs instead of asking for a raise. Asking for a raise puts me in a position where I have to perform extra to be "worthy" of that raise, while it might have been that my initial salary was way lower than my market value. Why then add the much increased pressure of asking a raise and the uncomfortable conversations that surely does ensue, when you end up in a much better position by simply looking for other offers. In final, I would actually say that I strongly disagree with your advice, and you're (at least that attitude) the type of team that I would probably leave. Your base assumption is wrong to begin with. The raise doesn't come from the employee having to do extra work, no it comes from them currently being undervalued and their current salary not being indicative of their current value, i.e. the raise is should not entail more worth, but is there to match the current level of worth of the employee.
  - harryh 11y ago
    There is obviously a lot of nuance here. Certainly more than I covered in my 4 sentence comment. Generally with most companies there will be a salary range for most positions. You're right that if that salary range is out of wack with the prevailing market rates the company is unlikely to retain good people (or attract them in the first place). But assuming the range has been set more or less correctly you're likely to have a salary at least in the ballpark of what's appropriate. My point was really about pushing your manager to go towards the high end of that range (either for a new job offer or a raise at an existing job. doesn't matter). As long as you've got some ammo in your corner this will generally be possible. But then afterwards I go back to what I said. Live up to it so your manager doesn't end up regretting his decision.
jrs235 11y ago
"It doesn’t really matter when you have the raise conversation, what matters is that you’ve done extensive research and tht you are prepared going into the negotiation. You can either be proactive and set a time with your manager or you can wait until your normal performance review. " I disagree with this advice for a few reasons... waiting for the normal performance review time is bad if your company's budgeting process doesn't line up. We budget on the calendar year, we review after 1st quarter. If we didn't have your raise in the budget it's much more difficult to get it approved. Know how you company does its budget. The best time to ask for a raise is before we do the yearly budget. ADD: But doing extensive research and coming to the table prepared drastically increases the likelihood of getting the raise you ask for.
- mgadams3 11y ago
  This is a great perspective that likely rings true for a lot of larger companies.
sul4bh 11y ago
Just letting you know, this needs a fix: http://www.mgadams.com/contact-page/ http://www.mgadams.com/contact-page/
- mgadams3 11y ago
  Thank you.
text_and_cases 11y ago
I work for a US company via outsourcing site, at $22/h full-time. Was one of the first developers, pushed their dead product up to the finish line almost by myself, now leading a tiny team. Even though I put in a great job for 2 years now, my repeated questions for a review which would (hopefully) lead to a raise ended up in silence. Outsourcer offered to "try and squeeze" $0.50/h more, that was in January. What's even worse, I am locked in with the them so I can't bring up the financial questions to the client directly. Other than raising stakes and possibly risking my position, which wouldn't happen probably, which makes it even more awkward. In few months I'll move from Eastern Europe where I live now, to a western EU country, so taxes and cost of living will put me slightly above welfare. FML
- mattm 11y ago
  Like the commentator said above, get another offer. Obviously you can't get it from this outsourcing site so you'll have to find it somewhere else. What's the outsourcing site? They're probably billing you out at $100+/hr. They don't want to pay you more because they don't need to. You've stayed for 2 years at that rate. They don't need to "try and squeeze" anything from the client. They are the ones that don't want to pay more.
- rhizome 11y ago
  Thing is, the agency is probably billing the client at least double your rate. If they can string you along without a raise, all the more free money for them.
- tonyarkles 11y ago
  You've touched on something that the Op talks about a fair bit, but assumes exists without actually verifying that it does: leverage. Your situation is rough, for a few reasons. First, because you're not negotiating with the client directly, you can't really use the fact that you know their product inside and out as a selling point to justify the raise. Second, you've already "proven" to them that it's work that an outsourced contractor can pick up and work on. By no means am I suggesting that you're not uniquely qualified to be working on their product! I'm just having a hard time figuring out how to sell it, especially if your middleman has no vested interest in improving your wage. It sounds to me like your only real move would be to work around the middleman and negotiate directly with the client. That's probably going to violate contracts that both you and the client have signed. Maybe your best bet would be to hold onto the gig until you move, and then look for something in your new location that offers more opportunity for growth.
rsp1984 11y ago
> 1. Establish your track record as a top engineer. > 2. Lay out your specific future plans to solve their burning problems and objectives. As someone who's been into raise negotiations on both sides of the table I think the entire article could be distilled to these two points. It's all about solving critical problems and getting s__t done. If you as an engineer can establish yourself as the one who 'gets it' and who consistently makes annoying problems and complexities disappear your negotiation position is unbeatable because then you're probably amongst the top 5% or 10% of engineers and any good company would do anything to keep you. Most of the time some percent more or less salary for a top performer don't make a difference in the scheme of things but missed deadlines and key projects do.
tnorthcutt 11y ago
Also relevant, by Patrick McKenzie: http://www.kalzumeus.com/2012/01/23/salary-negotiation/ http://www.kalzumeus.com/2012/01/23/salary-negotiation/
cookiecaper 11y ago
Most companies are inclined to think of raises as tiny annual percentage gains, which may keep in step with cost of living increases only if you're lucky. If you ask for more than that, managers are trained to save the company money and not honor the request. They're expected to call your bluff. If you show up with an offer from another employer, they may counteroffer, but may just as well let you go because of your "disloyalty". People can and do often suffer retribution when they ask for raises. The business world sees things completely differently than the engineering world.
choppaface 11y ago
How about equity that's the same quality (not magnitude) that the company gives investors? I.e. instead of these 10/20/30/40 (non-uniformly-vesting) ISO grants, the company issues the employee monthly debt that is convertible into stock and has a preference on the company's assets if it goes under? How do we negotiate more meaningful equity?
programminggeek 11y ago
For the record, it is believed to be in the company's best interest to lowball an employee and use a temporary information advantage to "save money". This is why some good people probably change jobs more than mediocre performers. If you have skill, at some point you figure out you are being taken advantage of.
mikekchar 11y ago
I wish I could say that I can't believe the conversation going on, but alas, I have been here before. Here is some friendly advice for those of you who were not working in the 90's: 1) This is HN and a lot of people here have drunk a lot of the start up Koolaid. I can understand that; especially in the kind of market we have right now. I should warn you, though, that some day the arbitrary measurements used for evaluating the worth of a startup will change dramatically. Yes, it seems like crazy talk right now, but some day the startup you work for will be evaluated based on sales, revenue and profitability not by how big your burn rate is, or how "disruptive" your technology is. 2) Some day aquisition and IPOs will be difficult and capital for companies without an amazing track record (of making money) will be hard to get. 3) There will be a time when stock prices will persistently go down; even if you work for the big amazing company whose shares have made X number of people millionaires. Some day you will find yourself working for the IBM of the mid 90s or the Microsoft of the early 2000s. You might even work for a Nortel and have a $100 per share price drop to 0 (as well as losing your job) over a year or two. 4) You can over price yourself. I know that seems stupid because obviously you can just price yourself to the market. That 30% increase you got from moving to another company can't be bad, right? Until that company tanks because they are paying stupid money to employees and nobody will hire you because you are too expensive. And when you realize it, and cut your expectations you've been out of a job for 6-8 months and nobody trusts that you can be any good because otherwise, why haven't you been snapped up by somebody else? 4) You can price yourself into a layoff. Sure your company is going amazingly well today. Your company got a $200 million cash infusion just last year, bumping the valuation up to $2 billion. There are 250 employees and your technology is super-awesomely-disruptive. But wait... there is a downturn in the market. Nobody will fund an IPO. You're running out of cash. No angel investors are showing up and revenue can only handle 100 employees. Let's look at the price/performace ratio of the current employees! Wow, Bob is good but... are we really paying him that much??? 5) I'm sorry to say it, but IMHO programmers are not underpaid as a general rule. Money you don't negotiate into your pocket is not "left on the table". It's not like the money is piling up somwhere. Money that isn't spent on your salary is spent somewhere else. Companies have slim profits these days and concentrate on growth. Even large companies tend to tune their profits to about 5% and don't even pay dividends! R&D expenses in a company range from about 2-30%, but often hover in the 10-15% range of expenses. For a company whose revenue is driven by technology, that means that the 10% activity pays for the other 90% of the company. Some people are worth the extra 30% pay raise because it will drive the appropriate amount of revenue. I'm just going to have to say it, though: most people are not. If salaries go up 30% across the board, a lot of the companies you work for will tank. I'm not saying that you aren't worth the 30% extra. It's just that the attitude of "We're getting the shaft" is going to kill a lot of companies (as it has done in the past). There's a reason old timers joke about Aeron chairs and foosball tables. These things I have seen and I'm sure I will see again.
kmonsen 11y ago
I agree with step 1: Go kick ass, but I would make it a bit more specific. Make your managers (and if possible his managers) life easier. Use your skills to solve their problems. If he knows he can count on you, and you do work that make sure he can do his job he will be in your corner. I don't mean to suck up, just when your are doing your magic make sure it is on something that everyone else considers a problem that needs to be solved now. I have seen a few people who have done really clever stuff, but it was on things that wasn't critical for the success of the project.
sudeepj 11y ago
Article like these make me wonder whether I work in a different world altogether :) Where I have worked (which are considerably big companies) we are "told" the salary raise during appraisal cycle. It is never open for negotiation. At the most, you can "express" disgust and thats about it. Hopefully this "disgust" will be taken into account during next year (depending on the manager). The only time I have seen someone from software fraternity negotiating is when he coming into the org or leaving the org. Note: my experience is limited to working in UK and India.
focusaurus 11y ago
Here's my similar long-form article based on advancing in a large enterprise software organization. http://peterlyons.com/leveling_up http://peterlyons.com/leveling_up

303 points by mgadams3 11y ago

Your article is quite interesting. Only one thing annoyed me: the text color doesn't contrast enough with the background, making your article difficult to read. It seems to be your first article on this blog this is why I wanted to give you this advice. Keep working hard.

mgadams3 11y ago
Thanks, great suggestion. I've adjusted it to have a stronger contrast.
- richerlariviere 11y ago
  It's better now :)

deleted 11y ago

[deleted]

meesles 11y ago

I hardly ever post, but I had to for this one: your post is riddled with typos. Useful information, but the mistakes were quite distracting. Proofread before publishing please!

mgadams3 11y ago
You were totally right, thanks for the heads up so I could fix them :)
kenshiro_o 11y ago
It's still very readable to me. I'd definitely proofread more if I were him but no need to be so harsh (I don't know if English is his first language). It was overall a long and well written post, with a clear structure and insightful content. Also, the article could have been spotless grammatically speaking but utterly uninteresting - I would certainly enjoy the opposite more. The message is more important than the technique at the end of the day.

s73v3r 11y ago

Step One: Go find a job at a competing firm, because that's the only way you'll get a meaningful raise.

lambdasquirrel 11y ago
I can't agree with this more. As much as I sympathize with entrepreneurs and managers having trouble hiring engineers in this current environment, I feel like "they" brought it on themselves because wages were probably below what they should've been for years, and because of that, supply became depressed. Now that a lot more infrastructure and tooling is in place, we're seeing the effects of that prolonged depressed supply. It's easy (relatively) to hire junior devs, and much harder to hire senior devs. And even still, I talk to senior devs who have trouble getting a raise. I'm like... ok... well I hear X is hiring.
- vonmoltke 11y ago
  > I can't agree with this more. As much as I sympathize with entrepreneurs and managers having trouble hiring engineers in this current environment, I feel like "they" brought it on themselves because wages were probably below what they should've been for years, and because of that, supply became depressed. Correction: they are below what people of the quality they want are willing to work for. There are plenty of engineers willing to work for those salaries; the vast majority get rejected. Whether these entrepreneurs and managers actually need the level of quality they are seeking is a subject for a different religious debate.
  - fweespeech 11y ago
    > Whether these entrepreneurs and managers actually need the level of quality they are seeking is a subject for a different religious debate. I'd say its more accurate to say "The quality of engineers isn't effectively determined in most hiring processes."
- sanderjd 11y ago
  What I don't understand is that the X that is hiring likely also has a bunch of senior devs who are having trouble getting a raise. It would be far more efficient to give raises to current employees who already have expertise at the company than to hire externally.

ryanackley 11y ago

Seems like solid advice. One challenge in asking for a raise at larger companies is it can be difficult to find someone who can actually authorize a raise. A lot of times your manager is a tech lead and his manager has no budgeting responsibility.

vosper 11y ago
This is an excellent point. Additionally, even if you do find out who can give you a raise, it may be impractical to get due consideration. I've experienced a situation where the CEO of the (large, listed) company personally reviewed all compensation changes and hiring offers. He was so busy (doing CEO stuff, presumably) that he'd often miss meetings with his direct reports (no-one would even know what city he was in) so imagine what it was like trying to get a resolution for an underpaid engineer on your team. After a while of repeating "we're working on it" you start to look either disingenuous, ineffective, powerless - or all of those. Edit: a word
- dpweb 11y ago
  That's interesting. I was in a small/mid size co. where the CEO had to approve all raises. I would think it makes more sense to have bands for each position and only hiring or going outside those bands would need approval.
orborde 11y ago
I have little experience with this matter, but it seems like the correct answer here is "get a job at another company that doesn't have broken procedures that render them unable to authorize paying for the people they need."

secfirstmd 11y ago

Complementary reference: Negotiation Advice from Silicon Valley :) https://www.youtube.com/watch?v=N6Zz-Nkkaxc https://www.youtube.com/watch?v=N6Zz-Nkkaxc

mgadams3 11y ago
One of my favorites!
deleted 11y ago
[deleted]

TTPrograms 11y ago

Question to HN: How do you negotiate for a raise when cash value is below market rate but plausible equity value goes moderately above (risk adjusted)? It seems that in the negotiation you have to take a pessimistic view regarding company outcome. Or would you negotiate for higher equity instead of salary?

vosper 11y ago
Market rate doesn't matter - what matters is what you can negotiate. The idea that you can swap one $120k engineer in for another is a ridiculous story that employers tell their staff, usually to avoid a discussion about salaries. What matters is how much added value you bring to the company. The difference between your value and your salary is (in some sense) the profit that the company makes on you. Further, is it your assessment that the plausible value of the stock brings you in just above market rate, or your bossess? Even if they're right, why be happy getting a bit over market rate, if you think you could get more?
npkarnik 11y ago
First decide why you want the job. There are good reasons to work at an early-stage startup, the pace of work will stretch your capabilities exponentially more than a stable job will (from personal experience). The skills I developed working at a startup were worth more in hard $$ after I left than I made working there. If your primary motivation is financial, you need to think carefully. You are taking an irrational and outsized risk as an early employee if cash compensation is below market. But people play negative expected value games all the time at the casino. Even if the expected value of the equity is "above" market, the variance on that projected equity is significantly worse for you than getting it in cash. Either way, you should push for roughly market cash compensation, framing it as "your expectations." I have said these exact words before: "The salary figure is definitely below my expectations (which is $___), I'm worried this won't work out." And then pause to get more information from them. Remember, your expectations are framed by your alternatives, which makes it easier to walk away. Best thing is to have another offer, if you don't it's not the end of the world though. They still have to fill the position, which is leverage for you.
s73v3r 11y ago

gshx 11y ago

It's a good post. One thing great companies get right, is to value the engineers that are working on the codebase. If an engineer is or feels under-paid and they get a competing offer, it's already too late to try and retain them. There's always someone out there that can/will pay 10 or 20% more, so, expecting to retain top engineers at the 70th percentile salary is going to be a futile exercise.

rokhayakebe 11y ago
One thing great companies get right, is to value EVERYONE, regardless of their position.
- gshx 11y ago
  Completely agree though as history has taught us, socialism doesn't scale very well. Better results merit better rewards. The term "Rewards" is broader than monetary benefits. Holds true not just for individual performance but also collective performance at a higher abstraction of entity - team, org, company, city, state, country, etc.
  - collyw 11y ago
    And capitalism is doing such a fine job of scaling at present?
rando289 11y ago
> it's already too late to try and retain them This directly conflicts with the most upvoted advice to go get a competing offer. I've read this before too. Is a company really going to think "he's talked to another company, we can't trust him to stick around." ?

dpweb 11y ago

I would downplay 'market rate'. That's fine for commodities. Are you a commodity? You are in a certain role and that does put you in a range of how much value you are adding/are capable of adding (although at a startup this would be a wider range than an established co.) Your only justification for an increase is that you are adding more than you're currently being compd for. There's other factors too, perks, travel demands, how fulfilled you feel, how much you like/hate your boss. You can determine what you are happy with and accept that, but if you can't get it, think about leaving if you can get more elsewhere. But don't stress too much about - am I getting 100% of what I could get. Know that - that doesn't define your worth as a person - and there are many people making much less than you, and many making much much more. Some of them incompetent. Are you happy is the question.

npkarnik 11y ago
I've always framed it as "the market rate for me." The nice thing is that things like Hired and AngelList actually let you put a $$ figure on it.

saryant 11y ago

I was recently on the job market and read Secrets of Power Negotiating by Roger Dawson. I'm relatively inexperienced and that book gave me a huge confidence boost. I can directly attribute 15% of my compensation to reading it. Even just the "flinch" he talks about netted me an extra 5k right off the bat. I had always been too afraid to directly ask "what is the compensation range for this position?" but now I ask exactly that, forthrightly and without confrontation. Nobody refused to answer.

balls187 11y ago
> I had always been too afraid to directly ask "what is the compensation range for this position?" but now I ask exactly that, forthrightly and without confrontation. Nobody refused to answer. My opinion is you should just ask for what you want, rather than asking what the compensation range is. You will get an answer, but you're unlikely going to get an actual meaningful band.
- eropple 11y ago
  I disagree on this, but with a caveat. The "top" of the band is usually 10-20% below their actual top, and I can triangulate from there.
  - saryant 11y ago
    Yeah, that was what I was assuming as well. I would ask the range, they'd give one, I'd flinch at the top-end of it and inevitably they'd come up 5%ish percent right away. From there I was generally able to wind up 10-20% above top of the original band.

harryh 11y ago

As a manager of engineers I would add one thing to this generally good advice: After you negotiate the raise, make sure you live up to it. If you kick ass at your job, your manager will very rarely worry too much about what they're paying you, they'll just be thrilled to have you on the team. But if you're not living up to the high expectations you set for yourself then they're really going to regret paying you that extra 5k (or 10k or 20k or whatever).

Tehnix 11y ago
This is actually the reason that I prefer changing jobs instead of asking for a raise. Asking for a raise puts me in a position where I have to perform extra to be "worthy" of that raise, while it might have been that my initial salary was way lower than my market value. Why then add the much increased pressure of asking a raise and the uncomfortable conversations that surely does ensue, when you end up in a much better position by simply looking for other offers. In final, I would actually say that I strongly disagree with your advice, and you're (at least that attitude) the type of team that I would probably leave. Your base assumption is wrong to begin with. The raise doesn't come from the employee having to do extra work, no it comes from them currently being undervalued and their current salary not being indicative of their current value, i.e. the raise is should not entail more worth, but is there to match the current level of worth of the employee.
- harryh 11y ago
  There is obviously a lot of nuance here. Certainly more than I covered in my 4 sentence comment. Generally with most companies there will be a salary range for most positions. You're right that if that salary range is out of wack with the prevailing market rates the company is unlikely to retain good people (or attract them in the first place). But assuming the range has been set more or less correctly you're likely to have a salary at least in the ballpark of what's appropriate. My point was really about pushing your manager to go towards the high end of that range (either for a new job offer or a raise at an existing job. doesn't matter). As long as you've got some ammo in your corner this will generally be possible. But then afterwards I go back to what I said. Live up to it so your manager doesn't end up regretting his decision.

jrs235 11y ago

"It doesn’t really matter when you have the raise conversation, what matters is that you’ve done extensive research and tht you are prepared going into the negotiation. You can either be proactive and set a time with your manager or you can wait until your normal performance review. " I disagree with this advice for a few reasons... waiting for the normal performance review time is bad if your company's budgeting process doesn't line up. We budget on the calendar year, we review after 1st quarter. If we didn't have your raise in the budget it's much more difficult to get it approved. Know how you company does its budget. The best time to ask for a raise is before we do the yearly budget. ADD: But doing extensive research and coming to the table prepared drastically increases the likelihood of getting the raise you ask for.

mgadams3 11y ago
This is a great perspective that likely rings true for a lot of larger companies.

sul4bh 11y ago

Just letting you know, this needs a fix: http://www.mgadams.com/contact-page/ http://www.mgadams.com/contact-page/

mgadams3 11y ago
Thank you.

text_and_cases 11y ago

I work for a US company via outsourcing site, at $22/h full-time. Was one of the first developers, pushed their dead product up to the finish line almost by myself, now leading a tiny team. Even though I put in a great job for 2 years now, my repeated questions for a review which would (hopefully) lead to a raise ended up in silence. Outsourcer offered to "try and squeeze" $0.50/h more, that was in January. What's even worse, I am locked in with the them so I can't bring up the financial questions to the client directly. Other than raising stakes and possibly risking my position, which wouldn't happen probably, which makes it even more awkward. In few months I'll move from Eastern Europe where I live now, to a western EU country, so taxes and cost of living will put me slightly above welfare. FML

mattm 11y ago
Like the commentator said above, get another offer. Obviously you can't get it from this outsourcing site so you'll have to find it somewhere else. What's the outsourcing site? They're probably billing you out at $100+/hr. They don't want to pay you more because they don't need to. You've stayed for 2 years at that rate. They don't need to "try and squeeze" anything from the client. They are the ones that don't want to pay more.
rhizome 11y ago
Thing is, the agency is probably billing the client at least double your rate. If they can string you along without a raise, all the more free money for them.
tonyarkles 11y ago
You've touched on something that the Op talks about a fair bit, but assumes exists without actually verifying that it does: leverage. Your situation is rough, for a few reasons. First, because you're not negotiating with the client directly, you can't really use the fact that you know their product inside and out as a selling point to justify the raise. Second, you've already "proven" to them that it's work that an outsourced contractor can pick up and work on. By no means am I suggesting that you're not uniquely qualified to be working on their product! I'm just having a hard time figuring out how to sell it, especially if your middleman has no vested interest in improving your wage. It sounds to me like your only real move would be to work around the middleman and negotiate directly with the client. That's probably going to violate contracts that both you and the client have signed. Maybe your best bet would be to hold onto the gig until you move, and then look for something in your new location that offers more opportunity for growth.

rsp1984 11y ago

> 1. Establish your track record as a top engineer. > 2. Lay out your specific future plans to solve their burning problems and objectives. As someone who's been into raise negotiations on both sides of the table I think the entire article could be distilled to these two points. It's all about solving critical problems and getting s__t done. If you as an engineer can establish yourself as the one who 'gets it' and who consistently makes annoying problems and complexities disappear your negotiation position is unbeatable because then you're probably amongst the top 5% or 10% of engineers and any good company would do anything to keep you. Most of the time some percent more or less salary for a top performer don't make a difference in the scheme of things but missed deadlines and key projects do.

tnorthcutt 11y ago

Also relevant, by Patrick McKenzie: http://www.kalzumeus.com/2012/01/23/salary-negotiation/ http://www.kalzumeus.com/2012/01/23/salary-negotiation/

cookiecaper 11y ago

Most companies are inclined to think of raises as tiny annual percentage gains, which may keep in step with cost of living increases only if you're lucky. If you ask for more than that, managers are trained to save the company money and not honor the request. They're expected to call your bluff. If you show up with an offer from another employer, they may counteroffer, but may just as well let you go because of your "disloyalty". People can and do often suffer retribution when they ask for raises. The business world sees things completely differently than the engineering world.

choppaface 11y ago

How about equity that's the same quality (not magnitude) that the company gives investors? I.e. instead of these 10/20/30/40 (non-uniformly-vesting) ISO grants, the company issues the employee monthly debt that is convertible into stock and has a preference on the company's assets if it goes under? How do we negotiate more meaningful equity?

programminggeek 11y ago

For the record, it is believed to be in the company's best interest to lowball an employee and use a temporary information advantage to "save money". This is why some good people probably change jobs more than mediocre performers. If you have skill, at some point you figure out you are being taken advantage of.

mikekchar 11y ago

I wish I could say that I can't believe the conversation going on, but alas, I have been here before. Here is some friendly advice for those of you who were not working in the 90's: 1) This is HN and a lot of people here have drunk a lot of the start up Koolaid. I can understand that; especially in the kind of market we have right now. I should warn you, though, that some day the arbitrary measurements used for evaluating the worth of a startup will change dramatically. Yes, it seems like crazy talk right now, but some day the startup you work for will be evaluated based on sales, revenue and profitability not by how big your burn rate is, or how "disruptive" your technology is. 2) Some day aquisition and IPOs will be difficult and capital for companies without an amazing track record (of making money) will be hard to get. 3) There will be a time when stock prices will persistently go down; even if you work for the big amazing company whose shares have made X number of people millionaires. Some day you will find yourself working for the IBM of the mid 90s or the Microsoft of the early 2000s. You might even work for a Nortel and have a $100 per share price drop to 0 (as well as losing your job) over a year or two. 4) You can over price yourself. I know that seems stupid because obviously you can just price yourself to the market. That 30% increase you got from moving to another company can't be bad, right? Until that company tanks because they are paying stupid money to employees and nobody will hire you because you are too expensive. And when you realize it, and cut your expectations you've been out of a job for 6-8 months and nobody trusts that you can be any good because otherwise, why haven't you been snapped up by somebody else? 4) You can price yourself into a layoff. Sure your company is going amazingly well today. Your company got a $200 million cash infusion just last year, bumping the valuation up to $2 billion. There are 250 employees and your technology is super-awesomely-disruptive. But wait... there is a downturn in the market. Nobody will fund an IPO. You're running out of cash. No angel investors are showing up and revenue can only handle 100 employees. Let's look at the price/performace ratio of the current employees! Wow, Bob is good but... are we really paying him that much??? 5) I'm sorry to say it, but IMHO programmers are not underpaid as a general rule. Money you don't negotiate into your pocket is not "left on the table". It's not like the money is piling up somwhere. Money that isn't spent on your salary is spent somewhere else. Companies have slim profits these days and concentrate on growth. Even large companies tend to tune their profits to about 5% and don't even pay dividends! R&D expenses in a company range from about 2-30%, but often hover in the 10-15% range of expenses. For a company whose revenue is driven by technology, that means that the 10% activity pays for the other 90% of the company. Some people are worth the extra 30% pay raise because it will drive the appropriate amount of revenue. I'm just going to have to say it, though: most people are not. If salaries go up 30% across the board, a lot of the companies you work for will tank. I'm not saying that you aren't worth the 30% extra. It's just that the attitude of "We're getting the shaft" is going to kill a lot of companies (as it has done in the past). There's a reason old timers joke about Aeron chairs and foosball tables. These things I have seen and I'm sure I will see again.

kmonsen 11y ago

I agree with step 1: Go kick ass, but I would make it a bit more specific. Make your managers (and if possible his managers) life easier. Use your skills to solve their problems. If he knows he can count on you, and you do work that make sure he can do his job he will be in your corner. I don't mean to suck up, just when your are doing your magic make sure it is on something that everyone else considers a problem that needs to be solved now. I have seen a few people who have done really clever stuff, but it was on things that wasn't critical for the success of the project.

sudeepj 11y ago

Article like these make me wonder whether I work in a different world altogether :) Where I have worked (which are considerably big companies) we are "told" the salary raise during appraisal cycle. It is never open for negotiation. At the most, you can "express" disgust and thats about it. Hopefully this "disgust" will be taken into account during next year (depending on the manager). The only time I have seen someone from software fraternity negotiating is when he coming into the org or leaving the org. Note: my experience is limited to working in UK and India.

focusaurus 11y ago

Here's my similar long-form article based on advancing in a large enterprise software organization. http://peterlyons.com/leveling_up http://peterlyons.com/leveling_up