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Salary negotiation, it’s not all about the Benjamins

Salary negotiation

Salary negotiation, it’s not always about the Benjamins

Salary Negotiation

Salary negotiation is not just about the salary. As tempting as it is, don’t just go for “da money” with your salary negotiations. There is more to it than just money.

Right now, a few tech candidates in Seattle are juggling a few offers in their job search. The recruiting process is shorter and the numbers are getting larger. My advice to anyone thinking about salary negotiation and taking an offer just for the money is to “think again”.

My advice to a company thinking about offering a large salary to an employee to close them is to think twice during the salary negotiation.

In Seattle, companies like Google, Zynga, and Facebook have entered the hiring fray with MSFT and AMZN. All have brand new shiny offices with catered lunches and gym memberships. Despite the 9.1% unemployment rate at the time of this writing, there is a serious war for talent within the Seattle Tech community and it is fierce.

As a recruiter, I run into this every week. For the most part, we can get around this, because the folks we are looking for, the folks that will be successful and enjoy working in our startup are trying to get away from the large soulless companies. They are looking to make a difference to the bottom line, to work with dedicated individuals, and to work in an innovative, hot space.  At a number of the larger Goliaths, you can add $2M dollar to revenue and it won’t even be a hiccup on the bottom line.  It may not even affect your department. When you work in a startup, you are encouraged to make a difference.  Any one person CAN make a real difference and we EXPECT you to change the world every day.  Any one individual can break this company in half or put it on the map and that is pretty exciting.

I recently interviewed a candidate I liked a lot. I liked him personally and professionally. After meeting with the team, the hiring department liked him a lot as well.

During the interview, we discussed salary and both the company and the candidate recognized that “$X” amount of dollars would be enough to woo him away from his current employer to come join us. “$X” was high, but we realized in this market, it was also “fair”.

When it came to the offer time, I felt pretty confident. He liked us, we liked him, we talked about salary early in the process and he said that the other company he was talking to wasn’t as sexy as ours and the commute was double to name just a few things in our favor. It was Match.com and we were ready to take it to the next level.

We offered 6% more than what was discussed.  ($X + 6%)  I thought the salary was a bit high, but not by much, and not enough to lose the guy over. We like to come in as high as we can with our first offer and not play the negotiation game.  I believe that if you are willing to pay someone an amount, just pay them. Don’t try and cheat them on Day 1. Try to save a few bucks and someone will steal them from you, or worse, the employee will resent me as the recruiter, the hiring manager, and the company.

The candidate lets us know that he got an offer that was 15% higher than what we offered, and 24% more than what he was currently making.

He said it was a struggle but he went with the other company, and suddenly the date went sour.

Readers Digest Version of the next 24 hours:

  • I tell him congrats and I understand where the other company is coming from.
  • I explain I wish we could afford him, but we are in startup mode.
  • I try to explain why I think our offer is more compelling and our space is sexier, how much he will learn with us, etc.
  • I wished him well, and let him know that if things didn’t work out to call us, and I would follow-up in a couple of months

This candidate is a great guy. He handled himself like a pro and was very gracious throughout the proceedings. It was how he carried himself that I wished we had a huge war chest.  I would have loved to go after him.  (I don’t need to match or surpass the offer, I just need to get close and make it compelling.)

At the end of the day, I didn’t want to offer him X + 15%, because I am confident I would be setting him up for failure within our company. When you pay anyone a price for anything, that price comes with certain expectation. It’s just human nature.  If you don’t agree, think about this:

  • When you pay a lot for a meal, you expect great things.
  • If you pay a lot for a meal at a fancy restaurant and the meal sucks, you are pissed and you don’t go back.
  • If you pay a price and get what you expect, there is a good balance.
  • If you don’t pay much for a meal, but it is amazing, you are happy. You tweet, share, and like the place with your social graph.  You are a loyal customer.

If we are going to pay someone $12.00 an hour or $100K, we expect $12.00 an hour or $100K worth of productivity.  I realize with the competition for talent, there is a little wiggle room, but there isn’t 24% worth of wiggle room. One, three, six, months later, after the employee is ramped up, can they possibly produce the expected level of output?  Simply stated, “No”. There will be resentment. There will be buyers remorse and as soon as the economy turns our boy will have to start producing “X” plus 24%. There will be whispers and if there needs to be a cut or a re-org, the expensive within the job descriptions will be looked at first. They may not be the first to get cut, but they will be looked at. Once you are “looked at” in this regard. . .game over.

I would much rather come in at a fair rate, blow the job out of the water and have my manager telling me “we need to give you a raise”, rather than coming in with a salary that I am not going to be able to deliver against. My advice:  Accept a fair rate with a review for a predetermined review/raise in 3 – 6 months. Those that do this have confidence in their abilities.  The difference in Salary is 15%. Let’s just say for round numbers, that is 15,000.  3-6 months of 15K is a 5K to 7.5K sacrifice, and over the course of a 3-5 year career, which would net you 300K, not much of a sacrifice considering how much credibility you will bring.

I don’t know of any managers out there that will have the guts to say:

“we offered you more money then you were worth because the market was so competitive, but you aren’t delivering to that standard” or “the market has changed”.

There will be other reasons given, and they probably won’t be the truth.

If you are juggling a number of offers or contemplating offering the world to a candidate, I encourage you to think it through.  Salary negotiations are not always all about the Benjamin’s.

See you at the after party,

HRNasty

nasty: an unreal maneuver of incredible technique, something that is ridiculously good, tricky and manipulative but with a result that can’t help but be admired, a phrase used to describe someone who is good at something. “He has a nasty forkball”.

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