Bad career advice I received early in my career: Don't talk compensation until late in the interviewing process after you've already convinced them to hire you.
Compensation is the first thing I bring up now. "I currently make X salary, Y annual bonus, and Z equity. This position will need to exceed all 3 by at least 20% before I even consider it. Does that sound doable? If not, let's not waste any more of each other's time."
Unless you're already extremely out of band and are pretty sure your range will be higher than 95% of your incoming offers, I do not recommend doing this. Never give first numbers, and if you're in software and haven't gotten past the middling, typical startup salary numbers and onto the mind-blowingly high numbers, you will not feel confident enough to handle a negotiation where you've already given away too much information.
I have >20 years of experience and my comp is absolutely >95% of inbound offers. So yes, I definitely want to not waste time with those and instead focus on the 5%.
That's great, and I'm in a similar situation myself. But your intro mentioned this being early career advice, which could mislead people into making pretty big negotiation mistakes.
Definitely negotiate, but the first rule of negotiation is to never be the first to give a number. And the 2nd rule is to always have multiple options that you'd consider.
I disagree: the first one who gives a number is able to anchor the negotiation around their preferred outcome; it's much harder to negotiate up from a lowball number than the other way around.
The preferred outcome of the company is making a successful hire, so they will go high enough to make sure they get a great candidate, or if they can't afford that, will go to their max budget. And if they don't then you don't want to work there anyway.
There is no situation where you will say a high number and they will move up to meet you if that number was greater than their max budget to begin with.
> There is no situation where you will say a high number and they will move up to meet you if that number was greater than their max budget to begin with.
Yes, and since it's quite common to have companies where their max budget is not acceptable (probably because they are the ones who can't fill their vacancies and thus have recruiters spam everyone all the time), it's important to filter them out by saying the high number before you've wasted many hours on worthless interviews.
The point is the tactic of giving the first number, though successful in ending many unappealing recruitment attempts, also has the unintended side effect of making it impossible that you'll ever get an offer SIGNIFICANTLY ABOVE your target range. Because comp boosts in the 50-100% range are possible, and you actually want to see those, you should let the recruiting org offer the first number.
You can simply quote a much higher amount instead. Boost your own salary by 100% and ask for that. When I was still working, that's what I used to do, and lo and behold, I 8x'ed my salary within 5 years.
Again, as others have repeatedly said here, this is a textbook example of why that’s a bad strategy. 100% sounds like a ton to you. How could it not? My last top offer was literally 2.5x what I was making. Never in my wildest dreams would I have been able to pick a number that high and say it with a straight face.
Interviewee: OK, I can consider it if you promise me a reasonable revision in a year.
2:
Interviewee: Whats your offer?
Company: Z, Z<Y
Interviewee: That's too low. I want X.
Company: You're asking for X when we offered Z. That's too much of a difference and it doesn't sound reasonable to us. We find it insulting. Let's end it here.
Can't tell whether it is sarcasm or not. A "Company" might get insulted, but, lucky you, you talk to a hiring manager. Who is just a person, not an entire organization, and who is not spending that X out of their own pocket.
The hiring manager is a person representing a company, which is exactly why they would find their downplaying the offer (because they were hoping to increase it somewhat to meet the candidate in the middle, so they had to start low because they want to keep some gap there) embarassing and feel insulted.
They may not be spending out of their pocket but they are spending out of their budget.
In corp dev where I worked until 2020. The compensation range is small enough that you know when you’re asking for top of range and you are at most leaving a couple of thousand on the table.
If you're going to start with salary, at least don't tell them what you currently make, because that will instantly be their baseline. Just tell them what you desire and don't tell them that it is 20% or whatever more than what you currently make.
But really you shouldn't start with giving a number. They already have a huge advantage because they negotiate salary all day and you do it once every few years. Just ask them for the range and make sure the minimum is above your X+20% number. If it's not, let them know that their range is too low, and if they won't tell you, say, "thank you, next".
I don’t think this true if you are already near top of band (very lucky place to be in). Right now I have golden handcuffs and just ignore almost all recruiters because I know only a few select big companies (plus quant) can match my pay.
Startups are a bit more hit or miss though, and if they are small enough they probably won’t even have pay bands. You need to do more due diligence there
Does the baseline matter though? If I’m not switching for less than 1.2x does it matter if they know what $current pay is?
Either they can offer it or they can’t?
It still matters because of mental anchoring. In their mind they are being very generous by giving you 20% more than you make so their offer will be the minimum.
If they don’t know what you’re making now, they will think the minimum might be too little and if they really like you they will go higher than the 1.2x.
The question wasn't about whether one should go first here, the question was whether if I make $100k should say either
a) "I make $100k today and I want at least 20% more which is $120k"
vs
b) "I want at least $120k"
The difference there is a lot less obvious. Of course, in the second you might have a minuscule chance of them offering way over $120k whereas in a you would not.
They might be willing to offer 1.4x. If you tell them you want at least 1.2x, they're probably not doing 1.4x. If you ask them what the range is and they tell you a range, you can at least ask them for the top of the range or more. Worst case they just say they can't do X but can do Y, and then you have more info to negotiate with. Way better than not knowing and leaving money on the table.
Once you've reached a high salary, it's a "damned if you do, damned if you don't".
If you talk comp early, you'll potentially (almost certainly) lowball yourself. If you don't, you'll spend a full time job's worth of time with hopeless positions.
If you are currently underpaid (and many people early in their careers are), this is a way to keep being underpaid.
What if they are willing to offer 50% more, but you ask for 20% more and end up with it?
If they go first, and they lowball you, you can always ask for more. If you go first and say "I want $X", and they say "OK!" you probably left money on the table.
You have a lot of experience, so you probably know what you are worth. But a lot of people a few years into their careers would undervalue themselves in this kind of negotiation if they went first, especially if they are transitioning from startups to big tech.
I have to imagine that it is good advice for early in your career. When you’re applicant number x out of 1500 who all got good grades at a good school, have some good github projects, and do well at the leetcode, grating the interviewer by prematurely mentioning comp may not be your best move.
Fresh out of school, you're worth just about as much as someone you graduated with.
20 years into your careers, you may be worth 10x or 1/10 of that same person.
Why waste people's time? It's a waste of time interviewing for a place if you know they aren't offering anything close to what you'll be asking. And if you're making 2-3x the median salary for that job title, you should probably get a comp range up front.
I've been burned by this a lot. Don't talk comp, go through hours of interviews, taking afternoons off for in person interviews (in the before times), all to find out that their maximum for for the position is a 25% pay cut.
Agreed, but it depends a lot on how much you value your time.
When starting out, you are usually not going to be low balled as you are cheap. Your time is not worth as much either and you are trying to climb the ladder.
Once you get to proper level of compensation, your time becomes much more valuable and the number of offers that meet that level of compensation become much lower. This means your best call is probably to move to talking money first.
Of course, you might miss out on some opportunities but you'll save a lot of time.
I do the same thing - I give them a ballpark of what I am making right now and depending on the opportunity what it would take to make me say yes (and if I em flexible/etc).
Sets expectations and avoid wasted time, which everyone prefers.
Not at all for software. You have many resources to do your do diligence and figure out what's the range. For top companies it's okay to put off the compensation talks for later.
Compensation is the first thing I bring up now. "I currently make X salary, Y annual bonus, and Z equity. This position will need to exceed all 3 by at least 20% before I even consider it. Does that sound doable? If not, let's not waste any more of each other's time."
Way too many lowballers out there.