Ten Rules For Negotiating A Job Offer - Haseeb Qureshi
Ten Rules For Negotiating A Job Offer - Haseeb Qureshi
Ten Rules For Negotiating A Job Offer - Haseeb Qureshi
This is silly. It’s silly for a lot of reasons, but one of the main ones is that in
reality, my negotiation skills are nothing special. There are lots of job candidates
who are better negotiators than I, to speak nothing of recruiters and other
professional negotiators.
It just so happens that most people don’t negotiate at all, or if they do, they
just negotiate just enough to satisfy themselves that they did.
Worse yet, most of the advice out there on negotiation is borderline useless.
Almost anything you read on the subject will be a vague and long-winded
exhortation to “make sure you negotiate” and “never say the first number.”
Beyond those two morsels of advice, you’re pretty much on your own.
I thought to myself: why is there so little actionable advice out there about
negotiation? I suspect it’s because deep down, many people believe that
negotiation is inexplicable, that it’s something some people can do and others
can’t, and that there’s no real way to break it down so anyone can learn it.
I say that’s bullshit. Negotiation is a skill that can be learned just like any other,
and I don’t believe it’s particularly elusive or hard to understand. So I’m going
to try to explain how anyone can do it.
Three caveats.
First: I’m not an expert. There are people who really are experts at this, and
when my advice contradicts theirs, you should assume I’m wrong.
Second: negotiation is tricky to generalize about because it’s deeply intertwined
with social dynamics and power. The appropriate advice for an Asian male in
Silicon Valley may not be appropriate for a black woman in Birmingham,
Alabama. Racial, sexual, and political dynamics accompany you to the
negotiating table.
Third: I’m the first to admit that negotiation is stupid. It’s a practice that
inherently benefits those who are good at it, and is an absurd axis on which to
reward people. But it’s a reality of our economic system. And like most collective
action problems, we’re probably not going to be able to abolish it any time soon.
In which case, you might as well improve at it.
So here’s my guide to negotiation. It’s going to be split into two parts: this first
part will be about conceptualizing the negotiating process, about how to begin
the process and set yourself up for maximal success. The second part will be
advice on the actual back-and-forth portion of negotiating and how to ask for
what you want.
And yet, when people talk about the labor market, they think “oh, a company
wants to give me a job!
job ! What a relief!” As though having a job were in itself
some special privilege for which a company is the gatekeeper.
A job is just a deal. It is a deal between you and a company to exchange labor
for money (and other things you value).
This might sound like an abstract point, but you should absolutely approach
negotiation from this perspective.
At the risk of spouting truisms: always, always negotiate. Doesn’t matter how
good or bad you think you are. You never damage a relationship by negotiating.
No. Negotiate.
Or maybe: “I
“ I don’t want to start off on the wrong foot and look greedy with my
future employer.“
employer. “
No. Negotiate.
We’ll talk more in the next section about why a lot of these objections are
bullshit, and fundamentally misapprehend the dynamics of hiring. But for now,
just trust me that you should always negotiate.
We’ll only get through some of these in this blog post, and the rest will appear
in the second part. But I’ll explain each rule as we get to it.
So let’s start from the top and try to walk through a negotiation process from
the very beginning. For most, that starts when you receive an offer.
Don’t get too excited though. The fun is just getting started.
Eventually, they’ll give you information about the offer. Write it all down.
Doesn’t matter if they’re going to send you a written version later, write
everything down.
down . Even if there are things that are not directly monetary, if
they relate to the job, write them down. If they tell you “we’re working on
porting the front-end to Angular,” write that down. If they say they have 20
employees, write that down. You want as much information as you can. You’ll
forget a lot of this stuff, and it’s going to be important in informing your final
decision.
Depending on the company, they’ll also tell you about the equity package. We’ll
look more specifically at equity in part II, but be sure to write everything down.
The rule from here on out is that everything significant you discuss will have
some kind of a paper trail. Often, the company won’t even send you an official
offer letter until a deal is finalized. So it falls to you to confirm all of the
important details in subsequent e-mails.
So yadda yadda, lots of details, writing stuff down, oh there’s a joke, time to
laugh. Now the recruiter is done talking and you’re done asking all of your
questions.
Your recruiter will now say something along the lines of “so
“ so what do you think?“
think? “
This seems innocuous, but your reply here is critical, because there’s a lot you
can say to weaken your position. This is your first decision point.
This leads to rule #2 of negotiating: always keep the door open. Never give
up your negotiating power until you’re absolutely ready to make an informed,
deliberate final decision.
This means your job is to traverse as many of these decision points as possible
without giving up the power to continue negotiating. Very frequently, your
interlocutor will try to trick you into making a decision, or tie you to a decision
you didn’t commit to. You must keep verbally jiu-jitsu-ing out of these antics
until you’re actually ready to make your final decision.
Protecting information
There’s an uncomfortable silence by now, and their “what
“ what do you think?”
think? ” is
hanging in the air.
A company doesn’t give you insight into what it’s thinking. It doesn’t tell you its
price range, how much it paid the previous candidate with your experience, or
anything like that. It intentionally obfuscates those things. But it wants you not
to do the same.
A company wants to be like a bidder in a secret auction. But unlike the other
bidders, it wants to know exactly how high all of the other bids are. It then
openly intends to exploit that knowledge, often by bidding one cent more than
the second highest bid.
Yeah, no. Screw that. It’s a silent auction, and to keep it that way, you must
protect information.
In many situations, the only reason why you have any negotiating power at all
is because the employer doesn’t actually know what you’re thinking. They might
not know how good your other offers are, or how much you were making in your
last job, or how you weigh salary vs equity, or even how rational you are as a
decision-maker. Bottom line, you want them to be uncertain on exactly what it
would take to sign you.
What if you were the kind of person who wouldn’t even consider an offer below
110K? Or the kind of person who wouldn’t consider an offer below 120K? If you
were, you wouldn’t ask for 90K, and if they offered it as conciliation, you’d tell
them to stop wasting your time.
By staying silent, they don’t actually know which of those kinds of people you are.
In their mind, you could be any of the three.
A corollary of this rule is that you should not reveal to companies what you’re
currently making. There are some exceptions, but as a rule you should assume
this. If you must divulge what you’re making, you should be liberal in noting the
total value of your package (incorporate bonuses, unvested stock, nearness to
promotion etc.), and always mention it in a context like “[XYZ]
“ [XYZ] is what I’m
currently making, and I’m definitely looking for a step up in my career for my next
role.“
role. “
Companies will ask about your current compensation at different stages in the
process—some before they ever interview you, some after they decide to make
you an offer. But be mindful of this, and protect information.
So given this offer, don’t ask for more money or equity or anything of the sort.
Don’t comment on any specific details of the offer except to clarify them.
Think like the watermelon farmer. This offer is just is the first businessman
who’s stopped by your watermelon patch, glanced over your crops, and
announced “I’ll take all of these right now for $2 a melon.”
Cool. It’s a big market, and you’re patient—you’re a farmer after all. Just smile
and tell them you’ll keep their offer in mind.
A company is making you an offer because they think you’ll do hard work for
them if they pay you. If you lose your excitement for the company during the
interview process, then they’ll lose confidence that you’ll actually want to work
hard or stay there for a long time. Each of those makes you less attractive as an
investment. Remember, you are the product! If you become less excited, then
the product you’re selling actually loses value.
Imagine you were negotiating with someone over buying your watermelons, but
the negotiation took so long that by the time you’d reached an agreement, your
watermelons had gone bad.
Companies are terrified of that. They don’t want their candidates to go bad
during a negotiation. Hence why they hire professional recruiters to manage the
process and make sure they remain amicable. You and the recruiter share the
same interest in that regard. If a company feels like you’ve gone bad, suddenly
they’re a lot less willing to pay for you.
So not only are you ending the conversation with the power all in your hands,
but note there’s another important move here: you’re roping in other decision-
makers.
This is a classic technique in customer support and remediation. It’s never the
person on the phone’s fault, they’re just some poor schmuck doing their job. It’s
not their decision to make. This helps to defuse tension and give them more
control of the situation.
It’s much harder to pressure someone if they’re not the final decision-maker. So
take advantage of that.
Okay!
We have our first offer. Send a follow-up e-mail confirming all of the details you
discussed with your recruiter so you have a paper trail. Just say “just
“ just wanted to
confirm I had all the details right.“
right. “
Groovy. Next step is to leverage this to land other offers and find the best deal
we can find in the job market.
If you’re already in the pipeline with other companies (which you should be if
you’re doing it right), you should proactively reach out and let them know that
you’ve just received an offer. Try to build a sense of urgency. Regardless of
whether you know the expiration date, all offers expire at some point, so take
advantage of that.
Hello [PERSON],
I just wanted to update you on my own process. I’ve just received an offer from
[COMPANY] which is quite strong. That said, I’m really excited about [YOUR
AMAZING COMPANY] and really want to see if we can make it work. Since my
timeline is now compressed, is there anything you can do to expedite the process?
Should you specifically mention the company that gave you an offer? Depends.
If it’s a well-known company or a competitor, then definitely mention it. If it’s a
no-name or unsexy company, you should just say you received an offer. If it’s
expiring soon, you should mention that as well.
Either way, send out a letter like this to every single company you’re talking to.
No matter how hopeless or pointless you think your application is, you want to
send this signal to everyone who is considering you in the market.
Second, if there are any other companies you are looking to apply to (whether
through referral or cold application), or even companies at which you’ve already
applied but haven’t heard back, I would also follow up with a similar e-mail.
First, you must realize what a company’s goal is. A company’s goal is to hire
someone who will become an effective employee and produce more value than
their cost. How do you figure out who will do that? Well, you can’t know for
certain without actually hiring them, but there are a few proxies. Pedigree is the
strongest signal; if they did it at other companies, they can probably do it at
yours. And if someone trusted within the organization can vouch for them,
that’s often a strong signal as well.
But turns out, almost everything else is a weak signal. Weak in the sense that
it’s just not very reliable. Interviews, if you think about it, are long, sweaty,
uncomfortable affairs that only glancingly resemble actual employment. They’re
weird and can’t tell you that much about whether an individual will be a good
at their job. There’s no way around this. There are a few stronger signals, like
bringing someone in for a week or two on a contract-to-hire position, but strong
candidates won’t consider this. So candidates as a whole have effectively forced
companies to assume almost all of the risk in hiring.
The truth is, knowing that someone has passed your interview just doesn’t say
that much about whether they’ll be a good employee. It’s as though you knew
nothing about a student other than their SAT score. It’s just not a lot of data to
go off.
Nobody has solved this problem. Not Google nor anyone else.
And this is precisely why it’s rational for companies to care that you’ve received
other offers. They care because each company knows that their own process is
noisy, and the processes of most other companies are also noisy. But a candidate
having multiple offers means that they have multiple weak signals in their favor.
Combined, these converge into a much stronger signal than any single interview.
It’s like knowing that a student has a strong SAT score, and GPA, and won
various scholarships. Sure, it’s still possible that they’re a dunce, but it’s much
harder for that to be true.
This is not to say that companies respond proportionally to these signals, or
that they don’t overvalue credentials and brands. They do. But caring about
whether you have other offers and valuing you accordingly is completely
rational.
So this is all to say—tell other companies that you’ve received offers. Give them
more signal so that they know you’re a valued and compelling candidate. And
understand why this changes their mind about whether to interview you.
Your goal should be to have as many offers overlapping at the same time as
possible. This will maximize your window for negotiating.
When you receive an offer, often the first thing you should ask for is more time
to make your decision. Especially in your first offer, more time is by far the most
valuable thing you can ask for. It’s time that enables you to activate other
companies and end up with the strongest possible offer. So be prepared to fight
for time.
Exploding offers are offers that expire within 24-72 hours. You won’t see this
much at big companies, but they’re becoming increasingly common among
startups and mid-sized companies.
Exploding offers suck, and I share most people’s disdain for this practice. But I
do understand it. Exploding offers are a natural weapon for employers to combat
a strong hiring market for tech workers. Companies know exactly what they’re
doing with exploding offers—they play on fear and limit your ability to seek out
counteroffers.
In a sense, it’s unsurprising that if startups have more difficulty attracting and
securing talent, they’d resort to this practice. What I don’t like is the dishonesty
about it. Employers often justify this by saying “If
“ If you need more time than this,
then that’s a sign you’re not the kind of person we’re looking for.“
for. “
Please don’t buy this crap or feel guilty over it. They’re simply doing this to
improve their chance of closing candidates. Needing more than three days to
make a life decision isn’t a sign of anything other than thoughtfulness.
Exploding offers are anathema to your ability to effectively navigate the labor
market. Thus, there is only one thing to do. Treat the offer as a non-offer unless
the expiration window is widened.
In no uncertain terms, convey that if the offer is exploding, it’s useless to you.
Example conversation:
I have one big concern. You mentioned that this offer explodes in 48 hours. I’m
afraid this doesn’t work at all for me. There’s no way that I can make a decision on
this offer within a 48 hour window. I’m currently wrapping up my interview process
at a few other companies, which is likely to take me another week or so. So I’m
going to need more time to make an informed decision.
If they push back and say this is the best they can do, then politely reply:
That’s really unfortunate. I like [YOUR COMPANY] and was really excited about the
team, but like I said, there’s no way I can consider this offer. 48 hours just too
unreasonable of a window. The next company I join will be a big life decision for
me, and I take my commitments very seriously. I also need to consult with my
[EXTERNAL_DECISION_MAKER]. There’s no way that I can make a decision I’m
comfortable with in this short an amount of time.
Pretty much any company will relent at this point. If they persist, don’t be
afraid to walk away over it. (They probably won’t let that happen, and will come
grab you as you’re walking out the door. But if they don’t, then honestly, screw
‘em.)
I was given several exploding offers during my job search. And every time, I did
essentially this. Every single offer immediately widened to become more
reasonable, sometimes by several weeks.
Don’t let a company bully you into giving away your negotiating power.
Do not fall into the trap of valuing companies solely along one dimension. That
means don’t just value companies based on salary, equity, or even on prestige.
Those are all important dimensions, but so are cultural fit, the challenge of the
work, learning potential, later career options, quality of life, growth potential,
and just overall happiness. None of these inherently trump any of the other.
Anyone who tells you “just choose wherever you think you’ll be happiest” is
being just as simplistic than someone who says “just choose the one that offers
the most money.” All of these things matter, and your decision should be
genuinely multi-dimensional.
Be open to being surprised as you explore different companies.
It’s also important to understand that companies don’t all value you along the
same dimension either. That is, different companies are genuinely looking for
different skills, and there are some companies at which you will be more and
less valuable. Even at peer companies this is true, especially so if you have a
specialized skill-set.
The more companies you talk to, the more likely you are to find a company to
which you are significantly more valuable than the rest. Chances are this is
where you’ll be able to negotiate your strongest offer. It might surprise you
which company this turns out to be; keep an open mind, and remember that a
job search is a 2-sided process.
One of the most valuable things you can do for yourself in this process is to
really try to understand how employers think and what motivates them.
Understanding your interlocutor is extremely important in negotiation, and we’ll
be exploring that a lot in the next blog post.
But most of all I want to emphasize: be curious about the other side. Try to
understand why employers think the way they do. Be sympathetic toward them.
Care about what they want and help them try to get it. Adopting this mindset
will make you a much stronger negotiator, and accordingly, a much better
employee and team member.
Okay. That’s as far as we’re going for today. In the next blog post, I’m going to
cover the last four rules of negotiation. I’ll also go over the actual back-and-
forth process—how to ask for what you want, how to strengthen offers, and how
to dismantle the tricks that companies will try to pull on you. Also a lot more
on the theory of negotiation, which I really dig.
Haseeb Qureshi
Managing Partner at Dragonfly. Effective Altruist. Airbnb, Earn.com
(acquired by Coinbase) alum. Writer. Former poker pro. Donate 33% of my
income to charity.
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San Francisco
Haseeb >|<
@hosseeb · Oct 26, 2018
Plan.
Solicit criticism.
Exercise.
Whatever you do, don't "work harder." It's pretty much never
the answer.
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Haseeb >|<
@hosseeb · May 12, 2022
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