Your comp questions answered: negotiating pay part 2Featured
Hi Everyone! I'm going to be writing about compensation here each month. Last month, I talked about negotiating pay from an employee perspective and wow, did y'all have some amazing feedback. I'm revisiting that again this month, because (a) so many good follow-ups; and (b) some great points came up in the comments and direct messages I want to touch on. I'll cover companies and compensation negotiation in a future post. Also: send me more questions, either here in the comments or via message! I want to make this useful to you all.Kicking things off with this excellent comment. (https://elpha.com/posts/tf1cn5o3/your-comp-questions-answered-negotiation#xv3ngbej) from @niya:"It's absolutely in your worst interest to provide any "requirements" prior to negotiation. Want to call this out since I see many women shoot themselves in the foot doing that and get 10s of thousands less on their offer than what's market."I agree with @niya on this – you don't want to share your requirements first. You really want to get them to give you information without you giving up too much info. There’s some great content available on this topic from negotiation experts, and it’s generally accepted that it’s not in the candidate’s interest to be the first one sharing a number. Even so, I stand by something I said in the last post: when directly asked about your compensation requirements, be prepared to answer with a range. Dodging that question is hard to do gracefully. Being prepared with your expectations for the role can keep you from making an in-the-moment error. Asking about level and pay ranges. One of the best questions you can ask a company is "What is the pay range for this role/level?" But depending on the job and stage of the company, that answer can be harder to answer than we'd like. In a larger, organized company – or in a role that has existing employees – the answer is clearer. Asking "How many recs are open for this role? At what levels? How many people are already in this role/team?" can give you an idea of how experienced the company is at hiring someone into your job. Even if the company has this "figured out" in some groups, it may not have done this in every team. In tech companies, engineering is usually first to develop rigor around hiring and career levels, with other teams following later. If you're joining a team that hasn't developed hiring/career discipline yet for whatever reason – you're in an unusual role, or the company is just early and disorganized – the negotiation game is more fraught. Very early-stage companies often look for people to wear multiple hats. When you're among the first few hires in a role, there can be a wide range of both scope and pay expectations. I say this because sometimes it's a tactic on the part of the company to be hand-wavy and "we don't know the level you might be" to try to avoid throwing out a range. Other times, the company really may have some flexibility depending on the seniority of the candidate – you! – and just haven't settled on what they want. It's crappy, but it's still true. That means that the big-company negotiations can be both more constrained and more predictable. Of course this isn't ideal. Even an early company should have some idea before they talk to you about a role, or even a few ideas! But in practice there's a lot of variability. No matter what company you're talking to, getting an idea of what's common at other companies can be useful. If your job is listed on levels.fyi, that's a pretty good source for getting a sense of how it pays at some larger companies. Remember that early-stage companies will be trying to preserve cash. Their comp packages will likely lean more heavily on stock options, risky but potentially lucrative. Only you can know your personal tolerance for that risk, so there's no "one right answer" when it comes to stock vs. cash. Later-stage companies are generally seen as lower-risk, with a lower chance of a stock-options windfall.One last thing: market data of all sorts is a guideline, but it's not precise. Think of it like climate vs. weather. Averaging the high temps of an area year-round gives a very general idea of the situation on the ground. It can't tell you if it'll be 72° on your birthday. So do get that data to help you get your bearings before a negotiation, but don't assume that "this market number is accurate." Companies use market data plus several other factors to set internal compensation targets. Beware of under-leveling. If there is only one thing you take away from every single post I write, it's this point. Under-leveling is incredibly common. It also negatively affects both compensation and overall career development opportunities. Coming in lower means you don't start with as much money or advanced projects. That's not to say that you should always fight to get the highest level you can! If you're not confident that you can take on the role's requirements, don't push for it. Companies tend to take a conservative approach, and will want to offer you a lower level with "a chance to grow." I'm generally skeptical of this, both from personal experience and having seen it play out so many times. That's why you need to understand how the company sets levels, and where you may fit best.In very large, established companies, leveling at time of hire may be set by a hiring committee. If that's how your potential employer works, your ability to negotiate for a higher level is pretty low. With an earlier-stage company, there may be more flexibility. If you want to negotiate for a higher level, you'll need to have a clear picture of the way the company defines levels. Be ready to articulate your strengths and experience, and compare them to expectations for the target level. Finally, don't negotiate against yourself. This may sound odd, but I've seen it literally dozens of times. When talking about pay expectations, I've had candidates – mostly women, but not only – start with a completely reasonable number... then talk themselves DOWN! "I believe that $140k is appropriate for this role... but of course I could take a bit less. I mean I'd love to work with your company... I could go as low as $132... or maybe even $128?" More than once, I have interrupted someone to say stop stop STOP! And I mean, I get it. As a hiring manager, I'm excited too! I'm excited that you might be someone we get to work with, and I'd love this to work out. I know that when you are hoping for the job, when you're excited about the opportunity... when you want it! – it can be hard to hold back from doing whatever you can to try to make it happen.This is why you come into the conversation with a plan and a range. In a compensation negotiation, everyone has a job to do – and in a good negotiation, you have the same goal. You both want to find a way to come to an arrangement where you're both happy and excited to move forward. Sometimes, that arrangement isn't going to happen, but being calm, prepared, and polite gets you closer to that shared goal.