How to negotiate your salary package

Welcome to Complex Systems where we discuss the technical, organizational, and human factors underpinning why the world works the way it does. Howdy ho everybody, my name is Patrick McKenzie, better known as PaddyO11 on the internet. I'm here today alone in the studio to record an essay about salary negotiation, which I wrote a number of years ago. Until Vaccinate CA, this might have been the most single impactful thing I did in the course of my career.

I've kept a folder in Gmail for people who write in telling me that they actually got a salary negotiation bump as a result of this. And I kept a spreadsheet about it until the low eight figures before keeping that spreadsheet was a source of stress.

A couple hundred thousand people read it every year. And of course, many of them have told me it worked out well for them. And someone suggested recently, you know, some people get a better experience from listening to things than they get for reading them.

And this in particular is an essay which includes quite a bit of exhortation. And I think hearing a trusted voice say that in your ear might be helpful for some job seekers. So I will do a reading of this and then back on next week with a more typical topic. Salary negotiation. Make more money, be more valued. Imagine something a wee bit outside your comfort zone. Nothing scandalous, just something you don't do often, don't particularly enjoy, and slightly more challenging than totally trivial.

Maybe reciting poetry while simultaneously standing on one foot. If I told you I would pay you $100,000 if you did five minutes of poetry recital while standing on one foot, would you do it? It's an absurd image, but play it straight. There is no hidden gotcha here.

You won't be videotaped. Your friends will never see you make a fool of yourself. The revolution will not be YouTubed. The offer is exactly as simple as you think it is. Poetry. Foot. $100,000. Would you read poetry for me? Of course you would.

You'd be screamingly stupid not to. In fact, not only would you read poetry, you'd probably take a poetry class to make sure you did it right, or go to the gym to verify, yep, sure enough, I can stand on one foot. Phew, pass me the Shakespeare. If you couldn't stand on one foot, you'd fix that.

because you know that it is much easier than other things you routinely accomplish, and you suddenly have a hundred thousand wonderful reasons to learn it, too. What if you were talking about this at dinner with your friends, and one of them said, Oh, no, I'd never do that.

i just don't do poetry i'm an engineer and besides my father told me that people who stand on one foot look silly and what do i need a hundred thousand dollars for anyhow you would not clap them on the back and say damn straight man

poets, always trying to tempt virtuous engineers into their weird poetry-spouting, flamingo-standing ways. You'd say, dude, it's five minutes. Heck, I'll help you practice. This is pretty much how I feel every time I talk to my engineering friends about saddler negotiation.

we overwhelmingly suck at it. We have turned sucky at it into a perverse badge of virtue. We make no affirmative efforts to unsuck ourselves, and, to the extent we read about it at all, we read bad advice and repeat it, pretending that this makes us wise. Dude, it's five minutes. Let's unsuck your negotiation.

New to the site? Hiya, I generally write as an engineer for engineers. Non-engineers can benefit from many of the same techniques, though the hiring market isn't nearly in your favor at the moment as it is for engineers in most major US metro areas. As an aside, 10 years later, people say, would I change the advice in this essay? Given the current hiring market for engineers, I would not change the word. So I say that explicitly. Why negotiation matters.

Your salary negotiation, which routinely takes less than five minutes to conclude, has an outsized influence on what your compensation is. Compensation can include money, or things which are more or less fungible replacements for money, but it can also include interesting things which you value.

From more time with your family, to opportunities to do tasks you find fulfilling, to perks which make a meaningful difference in your day-to-day quality of life. That makes your negotiation five very important minutes. You generally can't do a totally bang-up job on any five minutes of work this year and have your boss give you an extra $5,000. You can trivially pick up $5,000 in salary negotiations just by sucking less.

Since salaries are shockingly durable over time, particularly if one is not good at negotiating, you can expect a $5,000 increase in salary to compound with your standard annual read the HR chart percentage raise. It causes a similar increase in your 401k contribution. which also compounds, and establish a higher peg for any future jobs you take if you're unsavvy and allow those other jobs access to your prior salary history at any rate.

Accordingly, over the next 10 years, the value of $5,000 a year extra salary is close to $100,000 gross, and the value of $15,000 a year extra. Very achievable if you're, for example, a young engineer who doesn't realize that the hiring market is on fire right now, even outside of tech centers like Silicon Valley. It's over $100,000, even net of taxes.

As an aside, over the course of the last decade, I know people who quite routinely got $25,000 or more and not infrequently got more than $100,000 from negotiating well for mid-career tech professionals. But I actually knew that before I wrote this essay. a side bit of commentary one of the reasons i chose five thousand dollars rather than quoting twenty five thousand dollars was i felt more people would believe it and therefore attempt to put the advice into practice but

You should trust me on this topic, I think. Anyhow, shifting your mindset to embrace negotiation. We'll discuss tactical advice in a moment, but let's talk about the psychology of negotiation first.

I think that middle-class Americans are socialized from a very young age to view negotiation as something that is vaguely disreputable and engaged in only by poor people. Think of the associations you have with the word haggling. Do you think of a successful young professional talking about thousands of dollars in a brightly lit office? No, you probably think of an old woman arguing over a trivial sum of money in a dirty flea market.

If I were a little more paranoid and a little more Marxist, I'd honestly think that you were so misinformed about reality that it is almost prima facie evidence of a conspiracy to keep you in the dark about this. Feel the advantage of people who a.

you won't negotiate with, and b. will feel absolutely no compunction about negotiating with you. Principally, this will be your employers. People say that your house is the biggest purchase they'll ever make, but it won't be the most consequential negotiation.

If you're saying only about 25% or so if your gross income is subject to the results of real estate negotiations, close to 100% is subject to the results of salary negotiations. Thus, your salary negotiations are probably going to be the most important financial decisions you will ever make.

We socialize middle-class Americans to go into them unprepared, demotivated, and fearful of success. The reality is that rich and successful people negotiate. This is one important way in which they get and stay rich. It is an all-day, everyday thing in much of the business world, which is where most rich people get their money. Your counterparty does not share your mental model of negotiation. Salary negotiations are very asymmetrical.

Companies know this and routinely exploit it. Job seekers don't, perhaps because they think doing so would be unfair, and the word exploit makes them actively uncomfortable. So we often default by pretending that the employer is evaluating the negotiation like we would.

This is not true, and acting like it is true will harm both your interests and the interests of your future employer. For example, many people's mental model of employment is that an employee with a $60,000 a year salary costs about $60,000 to hire. If they negotiate $65,000 instead, that's $5,000 extra, which has to come from... somewhere. If the negotiation breaks down then, then that is $60,000 saved. This mental model is broken.

Get in the habit of seeing employees like employers see them, in terms of fully loaded costs. To hire someone, you need to pay for their salary, true, but you also have taxes, a benefits package, employer contributions to retirement, healthcare, and the free soda your HR department loves mentioning in the job. ads, and what have you. A bit of trivia, for U.S. employer professionals, the largest component after salary is usually healthcare, followed by payroll taxes.

The fully loaded cost of employees are much higher than their salary. Exactly how much higher depends on your locality's laws, your benefits package, and a bunch of other HR administrivia, but a reasonable guesstimate is between 150% and 200% of their salary. As inside, lower than that outside the tech industry and engineering professions. But if you're ballparking at 140% across most of the populace, you're not in a crazy place.

The fully loaded cost of an engineer receiving market salaries these days in California or New York is close to $20,000 a month. It is only $10,000 a month if they're receiving a heavily below market salary, such as if they were working for a startup. If you have a kid brother who majored in Flemish dance and got a modest full-time job in a non-profit, his fully loaded cost is probably still $4,000 a month or more. As an aside, those quotes for market salaries are very stale at this point.

Also, the quote for the Valley of Vivas Taller is unfortunately stale 10 years later. This is a roundabout way of telling you that companies are not sensitive to small differences in employee wages because employees are so darned expensive anyhow. You see $5,000 and think, holy cow, even after taxes, that's a whole new vacation. $5,000. $5,000! It would be so very, very greedy of me to ask for $5,000 extra dollars.

The HR department sees $5,000 and thinks, meh, even after we kick in the extra taxes, that's only about 3% of their fully loaded costs for this year anyhow, or seven hundredths of 1% of that team's hiring budget. I wonder if the cafeteria has carrot cake today. As an aside, if you actually join the corporate world and do budgeting for teams, you will not be budgeting dollars. You'll be budgeting in, and goodness, I hate this word in the depths of my soul, headcount, because...

Headcount A and headcount B, meaning a person A and a person B, are close enough in wages and close enough in cost that at a department level, rather than having your abstraction being, well, we spent $2,020,000. on salary and related expenses this year. It's much easier to communicate, okay, you previously had budget for 20 headcount. You have gone to your boss and asked for more budget for the next year, and they have given you two additional headcount.

And again, as long as you're within the salary bars for your company, nobody cares what those two additional quote unquote headcount get from you in the negotiating room. Virtually any amount of money available to you personally is mousetroppings to your prospective employer. They will not feel offended if you ask for it. I received a comment that this is untrue for startups by someone today.

For a funded startup which has enough engineers to warrant a foosball table, the company payroll is well north of $100,000 a month. Making a new hire is a big commitment, but they will still have a lot of flexibility on the details because the details do not shave months off their runway. We've been talking about your employer as an abstraction, but the instant case, you're talking to an actual person. Let's call him Bob.

is Bob's job to get you signed with the company as cheaply as possible. But Bob is not super motivated to do so because Bob is not spending Bob's money to hire you. Bob is spending Bob's budget. Bob generally does not get a large performance incentive for shaving money off of his hiring budget. You get a new MacBook if you convince Bob to give you $5,000 extra, but Bob gets, if he is anonymously lucky, a dinner at TGI Fridays if he convinces you to take $5,000 less.

In fact, there are many organizations, and many bobs, for whom power, status, and money come from asking for more budget every year. If you turn out to be on the expensive side, that is great for Bob, because A, he manages a high-powered peon, so he must be a high-powered manager, and B, this will help Bob get more budget next quarter.

So if you're worried about what Bob will think of your moral character, or if you want to compensate Bob because you feel you owe him for this job opportunity, do Bob a solid and negotiate in a spirited fashion with him. You don't owe Bob for giving you this job opportunity, by the way.

Please internalize this. Everyone in this discussion is a businessman. Some might call themselves regular employees, which just means they're businessmen with self-confidence issues and poor business skills. If the deal makes economic sense, it will happen. If it doesn't...

Firm handshakes will be exchanged, non-specific promises will be uttered, and everyone will forget about this discussion in a matter of hours. You will not be blackballed for negotiating. Bob couldn't care less, and even if he did care, he has better things to do with his time than worry about a candidate. he didn't hire.

Bob's working through a list of a dozen people right now, and his manager Dave is being such a hard case about that project schedule, and he's not sure he can make his daughter's piano recital, and the cafeteria's carrot cake was a little dry. Bob is far, far less invested in this negotiation. than you are. Your negotiation started before you applied to this job. Your negotiation doesn't happen in a vacuum.

Generic career advice is a little bit outside the scope of this post, though I've previously written a bit with engineers in mind that folks from many walks of life tell me was useful. But to make a long story short, many people think job searches go something like this.

You see an ad for a job on monster.com or wherever. You send in a resume. You get an interview. You get asked for salary requirements. You get offered your salary requirement plus 5%. And then you try to negotiate the offer if you bring yourself to do it. This is an effective strategy for job searching if you enjoy alternating bouts, being unemployed, being poorly compensated, and being treated like a disposable peon.

I served three years as a disposable piano in a Japanese megacorp and might be projecting a tad bit here. Regardless, my loss is your gain. You will have much, much better results if your job search looks something more like. Optional, but recommended. Establish a reputation in your field as someone who delivers measurable results vis-a-vis improving revenue or reducing costs.

Have a hiring manager talk with you specifically about an opening that they want you specifically to fill. Talk informally, and then possibly formally, and come to the conclusion that this would be a great thing if both sides could come to a mutually fulfilling offer.

Let them take a stab at what that mutually fulfilling offer would sound like. Suggest ways that they can improve it a bit, such that the path is cleared for you doing that voodoo that you do so well, to improve their revenue and or reduce their costs. Optional. Give the guy hiring you a resume to send to HR for the records. Nobody will read it because resumes are an institution created to mean that no one has to read resumes.

since no one will read it we put it in the process where it literally doesn't matter whether it happens or not because if you had your job offer contingent on a document that everyone knows that no one reads that would be pretty effing stupid now wouldn't it You might think that desirable jobs at well-managed companies, Google, Microsoft, Hot Startup, Foo with What, Dotly, etc., have layers and layers of bureaucratic scar tissue.

a great image from 37 Signals, to ensure that their hiring will conform to established processes and that offers will not be given to candidates sourced by using informal networks and interpersonal connections. If you believe this, you have a dangerously incomplete mental model of how the world operates. I have a specific recommendation to make that model more complete. Start talking to people who actually work for those companies and who have hiring authority.

Virtually no company has a hiring process which is accurately explained by blog posts about the company. No company anywhere has a hiring process which is accurately explained by their own documents about how the hiring process works. I won't give names, but all of the following are companies you've heard of. An ironclad non-compete with an IP assignment of a major multinational. Struck from the contract with four sentences of discussion.

A major tech employer offering a desirable employee X dollars as a salary because it was the max the HR department allows for that position. He got hired that week at 2X. All party rules. hiring organization, HR, and employee think they pulled one over on the other participants. A funny story goes here.

But I can't tell you that funny story, because literally two hours before publication, someone emailed me for advice about a situation that he believes is incredibly unjust at his company, and it is exactly that funny story to the letter. Now if I tell you the funny story, he may think,

Dang, I write Patrick in confidence and it ends up on his blog. So, no funny story today. Suffice to say that in my old age, I treat Dilbert less as far as Son Moore's documentary. As an aside, people do occasionally come to me ten years later and say, so can you tell the funny story now? And I don't remember what the specific funny story was, although I have an inkling of the genre that it was.

We can't hire engineers fast enough through our standard processes, so I guess we'll circumvent them by just tossing $1 million per employee at whomever they currently work for. Who cares? It isn't my million.

I've heard that subsequently explained by the M&A team, which is the team that is being spoken of here obliquely, that because of various infelicities within the company, the M&A team has a large budget directed from on high to make sure that the company is able to route around its own processes for getting smart people into the company and sometimes getting projects off the ground.

And different organizations have a different locus of concern in which they think the M&A team is more responsible for of those two. When does a salary negotiation happen?

Only negotiate salary after you have an agreement in principle from someone with hiring authority that, if a mutually acceptable compensation can be agreed upon, you will be hired. This is really, really important because it has direct implications for your negotiation strategy. First, the company is going to spend a lot of time and effort on getting you to the point of agreement in principle. Pretend you've gone through six rounds of interviews.

You probably won't if you get hired on informal networks because all barriers vanish when important people want to get a deal done. Let me give you some advice to someone a little less well-situated. Do some quick mental math on what that actually cost the company, with reference to one man month of an engineer's time costs $20,000, like we discussed earlier. You quickly reach the conclusion that the company has spent thousands of dollars just talking to you.

And that doesn't even count the thousands they spent deciding to talk to you instead of whoever isn't in the room right now. Walking away from the negotiation means they lose all that investment. Yeah.

sunk cost fallacy and all but since people predictably act in this fashion you should well predict that they will act in this fashion they really want to reach an agreement with you as inside I think I would say 10 years later, as someone who has been under the gun for a number of weeks and trying to find a candidate for a position, you pay an ongoing tax to your productivity at the other parts of your job when you have an open role that you are actively interviewing people for.

trying to suss out candidates on LinkedIn, asking people for recommendations, et cetera, et cetera. Your business needs that person to progress, or at least believes it does. And you would like to get to the other parts of your job, which are for most hiring managers, things that you are scored for much more directly than your performance in actually hiring. And so if you have a candidate who is so close to the finish line and who you are happy.

be with in terms of their likelihood of being the appropriate fit. You really don't want to lose on the last day over a trivial amount of salary. And so you become very incentivized to just say yes, in the same way that a person who is desperate for a job becomes very incentivized to just say yes.

if they feel like oh no if I don't say yes to the first thing that is said out of the counterparty's mouth I will be unemployed again for the next three or six months I think the acknowledgement of an ad read sounds cooler in Japanese Cool, right?

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They've got thousands invested in this discussion by this point. They want you. The absolute worst outcome of negotiating an offer in good faith is that you will get exactly the contents of that offer. Let me say that again for emphasis. Negotiating never makes worthwhile offers worse. This means you need what political scientists call a commitment strategy. You always, as a matter of policy, negotiate all offers.

In this wide world, I'm sure you can find a company who still makes exploding offers, where you get one yay or nay, and then the offer is gone. You have a simple recourse to them. Reviews them, and deal with people who are willing to be professionals. You're not a peasant. Don't act like one. This also means you do not start negotiating until you are already has a yes if. Yes, if we agree on terms. Do not start negotiating from no but. No.

but we might hire you if you're really, really effing cheap. You don't want to work for a no-but for the same reason that smart employers hate hiring candidates who are a no-but. No, but maybe if not on my team, etc. If they're leaning to not hiring you, you will compromise excessively on negotiation to get them to hire you. Compromising excessively is not the point of the exercise. It's a seller's market for talent right now. Sell to someone who's happy to buy.

This means that any discussion of compensation prior to hearing yes if is premature. If you're still at the job interview and you're talking Bryce, you are doing something wrong. Read the room. It is entirely possible that you came for a job interview, finished it, and proceeded directly to a salary negotiation. That's probably suboptimal.

but it is okay. Just don't give the employer the option of having the schedule be job interview, salary negotiation, and back to job interview if they discover that you have a spine. The ideal resolution to the job interview is for both sides to be enthusiastic about the arrangement, and for you to close with a warm handshake, and I look forward to receiving your offer by, oh, would tomorrow be enough time for you to run the numbers?

You then have a high likelihood of doing your salary negotiation over email, which is likely to your advantage versus doing it in real time. Email gives you arbitrary time to prepare your responses. Especially for engineers, you are likely less disadvantaged by email than you are by having an experienced negotiator talking with you. The first rule is what everyone tells you it is. Never give a number first.

Every handbook on negotiation and every blog post will tell you to not give a number first. This advice is almost always right. It is so right, you have to construct crazy hypotheticals to find edge cases where it would not be right. For example, if your previous salary was set during the dot-com bubble, and you are negotiating after the bubble popped, you might mention it to anchor your price higher, such that the step-down will be less severe than it...

would be if you engaged in free negotiations uncovered by the publicist history. Does this sound vaguely disreputable to you? Good. This vaguely disreputable abuse of history is what every employer asking for salary history, salary range, or desired salary is doing. They are all using your previously anomalously low salary, a salary which did not reflect your true market worth.

because you were young or inexperienced or unskilled at negotiation or working in a different firm or in another line of work entirely to justify paying you an anomalously low salary in the future. Never give a number. But Patrick, you cry, I don't want to be difficult. You're not being difficult. You're not doing anything immoral. You're not being unprofessional. They're businessmen. Sometimes they don't have all the information they would love to have prior to making a decision. They'll deal.

They already deal with every employee that they've ever had who is not a doormat in negotiations, which includes essentially all the employees they really value. Ramit Sethi, more on him later, introduced me to a concept he calls competence triggers.

Basically, if you have to judge someone's skill based on a series of brief interactions, you're going to pattern match their behavior against other people who you like. When people with hiring authority think of winners, they think of people like them who live and breathe this business thing.

They negotiate things as a matter of course. That is a major portion of the value they bring to the company. Volunteering a number when asked says the same thing to people with hiring authority that Flunking Fizbuzz says to an engineer. This person might be a wonderful snowflake in other regards, but I'm the thing I care about.

They're catastrophically incompetent. It will also cause them to retroactively question competencies they'd previously credited you with. I have literally heard that feedback, in so many words, from folks with whom I've had successful business dealings.

A funny and hindsight story, I cost myself five figures with a single email. The particulars are boring, but suffice it to say it was a fairly recently made, wet-behind-the-ears engineer error in quoting a client. He noticed. So did my bank statement.

My bank statement kept quiet, but the client complained that it made him think less of me until we actually got to work together. So anyhow, you may hear reasons why you should give a number. Objection. I really need a number to move the process forward. What you should think. You're lying to me to attempt to get me to compromise my negotiating position. What you should say.

I'm more concerned at the moment with talking to you about discovering whether we're a mutual fit. If we're a great fit, then I can be flexible on the numbers with you, and you can be flexible on the numbers with me. If we're not a great fit... then the numbers are ultimately irrelevant because your company only hires A players. I only work at roles I would be an A player at. Don't talk like that normally. Fine then.

Talk like yourself, but say substantially the same things. Engineers overestimate how different we really are from business people. We say 10x engineer, they say a player, but at the end of the day, we believe that there are vast differences in productivity between workers.

Okay, gut check. Is this something we actually believe to be true, or is this something that we just wish for? If it is actually your best guess about the state of reality, then it has immediate news you can use, implications for how you should conduct your life. This forum needs a number.

What you should think. You're lying to me, to attempt to get me to compromise my negotiating position. What you should say. Give me good access, and I'll fix it in a jiffy. No, seriously speaking, I'm more concerned at the moment with discovering whether our mutual fit...

Oh, it's physically impossible. I'll put $1 in then to get the ball rolling and we'll circle back to a letter. Objection. We want to figure out whether you're an appropriate candidate for the position. What you should think. You're lying to me. to attempt to get me to compromise my negotiating position. What you should say. It's important for me that this is a good mutual fit for us. Let's talk about why I'm a great fit for this position. I know you're concerned about. Fill in the blank here.

In addition to my previous successes doing it, I have some great ideas for what I'd do about that if I was working at your company. Would you like to drill into those, or is there another job area you're more concerned about to start with? Objection. I'm sorry. Gray tried to dodge there, but I just can't go forward without a number. What you should think. You're lying to me to attempt to get me to compromise my negotiating position.

What you should say if you're an engineer. Well, you know, I would hate to walk away from a negotiation over this. Working with your company looks like it would have been such a wonderful opportunity. I hear the hiring market is super tight right now.

Would you like me to introduce you to other candidates? Maybe we can shave a few months off of you filling this position. What you should say if you're not an engineer. Damn, I guess I should have studied engineering. What you should say if you're a little put out by that comment. Well, you know, salary is only one component of the total compensation package. In terms of total compensation, we're probably looking at something like fill a number here.

Suggested calculation, take the package value from your last company and add 5 to 10%. If you don't know how to calculate the value of your compensation package, learn that. But as a rough guesstimate, salary plus 30 to 50% for full-time employees in professional roles, and the multiplier tends to scale up as your...

salary scales up. P.S. I double majored in making things and making things up. The joking comes from a place of love. Okay, love and scheidenfreude, in solution with each other. Listen to what people tell you. Repeat it back to them.

Properly run negotiations are not jockeying contests. They're persuasive exercises. We'll give the company a pass on the what's your number question because it is an established social ritual that they get one free pass at screwing you. You still don't have to cooperate with it, though. you know what people find persuasive their own words people love their own words when you talk to them you should use their own words seriously watch the eyes light up did the solicitation for the job say

We are seeking someone with strong skills at scaling traffic in a fast-moving environment. Pick out the keywords. Scaling traffic, fast-moving environment. Scaling traffic doesn't sound like how I'd phrase it if I were writing or speaking for myself, but if you've just described your need to me as scaling traffic, by golly, I will tell you how great I am at scaling traffic. Reinterpret or rephrase the...

true bits of your own story such that it fits the narrative framework which they have conveniently told you that they are going to respond to. Did you previously work in a small business which was unencumbered by lots of process? Sounds like a fast-moving environment, right? Call it exactly that, then.

A micro tip. Take notes during job interviews and salary negotiations. It's easy. Go to the convenience store before the job interview, buy a writing instrument and a $1 notebook, and jot down occasional notes when appropriate. Can I do that? Of course you can. Do you know anyone who you've ever thought, man, I thought they were competent, but it turned out they had a notebook, so I had to write them off? No. Taking notes says I'm attentive and detail-oriented, and I care about what you say.

Make sure you can take notes without playing with your pen or otherwise appearing to fidget. In terms of specific things that should get your pen moving, among others, I would focus on specific words they use and concerns they have, so I can come back to them later in the conversation.

numbers are another good thing to hit the notebook because numbers should only ever trend in a direction of better to you so you don't want some to do something stupid like so how many days of vacation was that again and let a 24 suddenly become a 20.

You might think, I'm going to write down the offer so I have proof of it for later. Get offers written, that hopefully goes without saying, but get it written by them and or in a follow-up discussion with an email recapping the important points and asking if you understood them correctly. Your notes will not convince their HR apparatus to honor the agreement and event of retroactive miscommunication, but an email from the decision maker likely will.

As an aside in the tech industry, there is an institution of offer letters where all the major terms are captured in a letter. That isn't a perfect institution because of the component of equity valuation where the offer letter will often not have sufficient information to value. you the equity, but it will be very upfront at what the salary is. And you should always receive that for saying yes to a job, at least in our industry. People say the darndest things.

For example, someone might spontaneously volunteer during a job interview that they've been interviewing for the position for six months. None of my clients would ever say that, of course, but then again, one would hope none of their consultants would ever chop five figures off their own invoice with an email. If they say the position has been open for six months, take note of that.

During the salary negotiation, if they have a pricing objection, one of your first responses should be, I appreciate that this is a little more money than you might have been thinking about, but this is an opportunity to get this position filled without delaying your business by another six months. What is the value of that six months?

of execution to you. Conversely, don't say stupid things during job interviews, such as, I need this job because... You never need a job. Being needy means that the party who is not needy has automatic leverage over you. your batna best alternative to a negotiated action is the negotiation is very poor instead of being needy aim for i am enthusiastic about the opportunity of working with you assuming we can come to mutually satisfactory terms

A micro tip. Notice how often I say we, and variations on mutual win. Those work pretty well. The only thing better than we is you, and variants of it. because people care a heck of a lot more about their problems than they do about your problems. This advice is stolen shamelessly from Dale Carnegie. This means that...

You should talk about their problems, concerns, and wishes, and b. You should guard against your own natural tendency to bring up irrelevant things, like your own problems, which typically will not sell the decision-maker on adopting the mutual when you're proposing. Similarly, I generally try to phrase things positively rather than score debating points. You just said X. That was contradicted by your earlier statement Y, which means...

Wins debating points, but does not win friends and influence people. You might try something like, good point, but take into account your early concerns about why. Research, research, research.

Many people will tell you that you should familiarize yourself with the approximate salary range for the position in your region. This advice is easy to act on. Go to a salary aggregation site. Guess what the position is. Pray that this gives you a better number than a random number generator.

but it leaves a lot to be desired. It's 2025. Facebook and LinkedIn exist. You should, before any job interview, have intimate knowledge of the target company. Prospective peers within the company are one obvious way to get it. So are ex-employees, folks who have dealing with them professionally, etc. Key things you want to learn. What do they value? What do they value within the company? Roles, titles, groups?

What does a career path look like for successful people within the company? Roughly speaking, how generous are they with regards to axes that you care about? Do they have any compensation levers which are anomalously easy to operate?

For example, if you asked around, you might hear a few people say that a particular firm pushes back modestly on out-of-band increases in salary, but they'll give in-the-money option grants like candy. Then all the fuzzy stuff. What is the corporate culture like? Yada yada.

I will add, in addition to here, many years later, you should thoroughly understand what the ladders and levels look like for the company, for larger tech companies, which will become a focus of your employment there later, but which they're often strategically vague about prior to people joining.

They're harmonized at the biggest names in tech. And they're harmonized largely for a reason, because those companies are constantly competing for each other's employees, but they're not necessarily harmonized across the entire tech industry. And so.

one thing that you will be discussing is when I join, am I a level three? Okay, if I want more money, do I have to be at level four to get that? Well, what signal would you need from me now to come to the conclusion that I'm actually a level four? I should be hired as a level four. I think it is an open secret in the tech industry that the easiest promotion you will ever get is one that is given during the hiring process and not during the, you know, semi-annual try to.

write together a packet justifying a promotion and send it to a committee of people who you might or might not know the identities of which will be judged by some combination of algorithm and voodoo rituals You can even bring a lot of these questions to the job interview, which is, again, prior to the negotiation. Maybe... don't ask them. So are you guys tightwads? But...

Culture asks questions like, what are the projects that the company thinks are really key to its future, and how would a motivated person go about getting on them? Are both totally fair game and win you brownie points for asking. Similarly, a lot of employees will, out of company loyalty, attempt to sell you on taking the job with the company by trading you very useful information. And as an aside, employees are often less than guarded about saying things which are very...

common knowledge within the company, but not common knowledge outside of the company, such as their ladder system, et cetera, et cetera. You can often ask people for their level. They will straight up tell you. The more you know, the more options you have when doing negotiation, because you'll have more things and more motivational things which you can offer in exchange for things you want.

It will also help you avoid making mistakes like, for example, getting into a rigid classification system where the classification you're aiming at will make forward advancement towards your goals very difficult. For example,

There are some companies where product and QA are run like separate fiefdoms, which haven't forgotten the most recent war. And in those companies, getting hired as an engineer may not be a career enhancing move if you like making things for a living. There are other companies where people...

cross-function in all the responsibilities all the time, and applying for a job advertising as quote-unquote support engineer makes lateral moves onto customer-facing projects trivial. You can find which you're applying for by taking any engineer out for coffee.

New information is valuable and can be traded for things you want. There was a post recently on Hacker News about someone's experience with the job offer from Google. They wanted more money. The recruiters offered to think it over and came back with the reply that Google's food benefit was worth a significant amount of money with the calculation to back it up. That is a pretty brilliant reply. Google's food benefit is about as old as the company.

Approximately all people wanting to work at Google are aware of its existence. However, the explicit calculation of what it is worth is new. And so if you bring up that calculation, by implication you're offering newly found value to the negotiation. This successfully convinces people.

and that they didn't really need that extra money. It is so successful at this that Google recruiters apparently have this entire interaction scripted since multiple people report having the exact same experience. As an aside, yeah, it is totally scripted. Maybe this is obvious to people. Maybe it isn't. People whose job it is to hire people have documents and best practices for hiring people, which are shared across the company.

and sort of embedded as the standard practice. And sometimes they do the standard practice and sometimes they don't. But yeah, things we say to come to candidates when they give us pushback about salary is totally something that a bunch of very smart people have jammed in a document. and refined over the years. You should steal this tactic. You are an expert in your own skillset, life story, and ideally value you can create for the company. However, the person you are talking to is not.

If they ever resist about something which you want, consider reaching into the treasure chest that they are mostly buying blind, and revealing one of the many glittering jewels inside. They are going to get them all anyhow, but if they buy the chest... But each one you bring out decreases the perceived risk of buying it and therefore increases its perceived value. Let's roleplay here. The company says, we can't see our way to $88,000. Applicant.

I know you do a significant amount of business with your online store. At my last company, I increased sales by 3% by fill in the blank. What would a 1% increase in sales be worth to you? Well, I don't have that figure in front of me, but would it be safe to say millions of dollars?

That sounds about right, yeah. Great. I can't wait to get started. Getting me that extra $4,000 would make this a much easier decision. Considering that this is conceivably worth millions to you, we'd be silly and ask to do business with each other. I'll see what I can do.

Let me help give you some options. See below. This hypothetical applicant is doing well on negotiation, but apparently needs to do more research on what conversion optimization specialists can get away with charging these days. Here, let me help you. Six-figure salary with all the usual perks as an employee, senior engineer project rates through you might not believe me if I told you as a consultant.

Anyhow, simply by bringing attention to something which was hopefully already in bold print on their resume, they just increased their perceived value to the company, thus justifying the company moving a lever, which, again, the company isn't really sensitive to at the end of the day. As an aside, I mentioned earlier, resumes are an institution created to make sure that people don't have to read resumes, to be just slightly more empathetic to the hiring manager part of this discussion.

You've read hundreds of resumes over the last couple of weeks. You and the recruiting team have been sending emails back and forth to coordinate schedules, et cetera, et cetera. And you're actually meeting this person who is one of... Hundreds of people well above Dunbar's number that you are trying to keep in this constellation of your mind. Weeks after reading the resume. And so, you know, you're a busy professional in a tech company.

Probably, if you reread their resume on the day of, it's in the five minutes immediately before the interview. Many of your peers who are less diligent will not actually reread the resume. They'll simply have forgotten it all and assume that anything relevant comes out in the course of the interview. And so things that are on your resume that you think are adequately disclosed to the company, disclose them again. It will probably be new to the company every time they hear it.

Can you tell I'm cynical about the value of resumes in the hiring process? Extremely cynical. You have a multi-dimensional preference set. Use it.

Don't overly focus on your salary number. It is important, of course, but there are many parts of your compensation package and many more things that you value. Should you and the other party reach an impasse on part of it, offer to table that part of the discussion. to be returned to later and bring up a different topic. You can then trade improvements for concessions or parent concessions on the earlier topic. Employer, we were thinking about $80,000. $80,000 is interesting.

a word I have a comment on later, but not quite where we need to be to get this done. Do you have any flexibility on that number? I think I can convince HR to approve $84,000, but that is the best I can do. I appreciate that. $84,000, huh? Well, that isn't quite what I had in mind, but the right package offer could make that attractive. How much vacation comes with the package? 20 days a year. If you could do 24 days a year, I could compromise that $84,000.

I think I can do that. For those keeping score at home, the applicant never gives up anything, but the employer will walk away feeling like he got a good deal. Here's my micro tip. Interesting is a wonderful word. It is positive and noncommittal at the same time. If they tell you a number, tell them it is an interesting number, not a wonderful number. Hopping around the offer also helps you defuse common negotiating tactics like, I have to go to an external authority to get approval of that.

This is in the negotiation playbook because it works well. It injects an automatic delay in the process and gives you a scapegoat for refusing a request while not being guilty of the refusal yourself. you should strongly consider having an external authority of your own. Significant others work well. Note that in the U.S., your would-be employer is legally prohibited from breathing on the subject of your marital status. So, something like, we'll have to talk it over.

or that sounds reasonable but i have to run it by the family has the dual virtues of being a socially acceptable reason to delay any major decision while also being equally available to unattached youngins I talk shop with family all the time. I'll certainly continue discussing employment with my family after it includes my fiancé, too. You can tell this essay is dated if we now have two children. And are married, obviously.

Anyhow, say your decision maker says that proving deviations from the company's salary structure is outside of his discretion, and those evil ogres in HR will likely deny his request. That's fine. express sympathy with him, because he just said that he wants to give you more but can't, then refocus the discussion on things which are within his personal authority.

vacation days, work hours, project assignments, travel opportunities, professional development opportunities, and the like are good areas to probe at. You can then use the unspent, you wanted to do things that are nice for me, obligation which we just acknowledged as one of the things that he has authority to grant you. For your future perusal.

I'm deeply indebted to a few buddies of mine, principally Thomas, who was at Montesano back in the day. He's currently at Fly.io. And Ramit Sethi for teaching me to be less of a doorman in terms of negotiation. Thomas has forgotten more than I... than i'll ever know about doing negotiations with clients you can check out the hacker news search for t tachik which is his username negotiation for some good advice linked in the show notes or if you're in chicago take him out for coffee

Some years after I wrote this article, Josh Judy, one of my buddies, wrote the literal book on salary negotiation. If you learn the best from books, I recommend it. If you prefer more personalized advice, he has that available too. And, well, thanks so much for listening to this special episode. See you next week on Complex Systems. Thanks for tuning in to this week's episode of Complex Systems. If you have comments, drop me an email or hit me up at patty11 on Twitter.

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