How should you negotiate your job offer? How do you evaluate whether your offer is good enough? How should you frame that negotiation conversation?
This discussion features Ed Chang, founder of zerosum.net and former FAANG manager, on how you should approach your job offer negotiation. Ed shares tons of actionable insights in this podcast, including:
How your relationship with the recruiter is super important
How you need to establish the right expectations and frame of reference
Importance of research and having knowledge about the market
The right time for having this conversation
Typical increase that you can expect
Tools and resources that can help you
Ed Chang founded ZeroSum Consulting to help tech workers negotiate their best possible compensation package. He has worked at startups, research labs, and multiple FAANG companies (FAANG = Facebook, Apple, Amazon, Netflix, Google), where he has sat on both sides of the negotiation table. Ed holds a Ph.D. in EECS from UC Berkeley.
Here are some quotes from his former clients:
“It is like I was leaving four Teslas on the table every year.”
"This service helped me not only increase what I was told was the "absolutely final" offer by an astronomical amount (which on its own could constitute a perfectly decent salary of a recent graduate), but it helped me shape my growth trajectory in ways I couldn't have imagined for myself at this stage of my career. After finalizing the negotiations and signing, I felt more empowered and appreciated than ever."
Check out the podcast below to listen to the complete discussion!
Note: Interested in going deeper into Negotiation? Check out this popular and highly rated course on Successful Negotiation on Coursera, offered by the University of Michigan, to give your negotiation skills an edge :)
Here are our detailed notes from the discussion / transcript of the podcast:
Let’s say I'm a candidate, and I'm at the beginning of my recruiting process. And a lot of times a recruiter might ask you, do you have a level in mind, a target level? And what is your current level? What would be your advice for how a candidate should answer this question?
It would depend on the candidate. I think everyone is hoping to one day interview for another job hoping to get themselves into another position where they're being paid more, and maybe, correspondingly, that they have a higher level as well. But the company is trying to figure out if you can do the job at that level, they don't want to, in some sense, over level you and have you interview and maybe get a job that you're not qualified for. So there's some back and forth there.
If you're a new grad, typically, there is a new grad level that’s set at most companies (Eg: level three for starting engineer). But if you're experienced in industry, or if you're going to a start up, it's a lot more flexible. So to answer your question, if a company is asking you kind of what level you're going for, you can do your research at the beginning and get an idea for what level suits your level of experience, and also your ambitions for the type of job that you want to do.
Would you recommend candidates reveal their current level? This would apply to someone who perhaps feels that, maybe their current level is not representative of their capabilities, and they are looking to get a level jump?
In that case, I would not recommend that they reveal their level, if they feel that the work that they're doing, and the experience that they have both the years of experience as well as the job responsibilities they've had in the past - If they feel that that qualifies them for another level, then I think they should just go ahead and talk to that.
You're under no obligation to reveal any information that is not going to be helpful to your cause!
What would you suggest as a good way of framing your response to a question like that from the recruiter?
Well, as I had said, I think one way of framing it is by saying the level that you're going for, and then backing that up with the work that you're currently doing or the work that you've already done. Another way of framing it is, if you have ideally, friends that you've worked with, who are also at that company and the type of work that they do And then you can compare yourself against them in kind of a benchmark that can work as well. So I know people who have gone from one large company to another. So then the person when they interviewed, they just told the recruiter, I know these three people, and they're all at this level. And I've worked with them in the past. And I believe that I'm at that level as well. And so I'd like to interview at that level.
That's a good idea, establishing benchmarks for the recruiter to use.
And there may be cases in which revealing your level could be advantageous as well. Let's say that you are a senior engineer, which would be say, level 5, at Google or at Meta. And then you wanted to interview for a level 6 staff position. Let's say that you've been level five for a couple of years. And that you believe that you've been operating at a level six, you've been getting high performance ratings - you could be very transparent, open and say, I'm level five right now. But I've been level five for four years say, my last two performance review cycles, I've been at the strongly exceeds rating. So my manager has told me that I should be going for promotion. But I'd like to explore the opportunity at, say, Amazon or Apple or or at Meta for this equivalent position that I'm going for a promotion for.
And I think a good recruiter, if you present them with this kind of data , they would help you then or at least help you make the case. And then it's up to the hiring committee.
So this kind of gets into a deeper question. I know you said you're gonna start off with a simple question. But the deeper question is how do you handle your relationship with the recruiter. So the recruiter is going to be the one who kind of makes or breaks your candidacy with the company, and is going to be the one who has, in some sense, the one who's relaying the offer, and the one who's negotiating on your behalf with the rest of the compensation committee at that company. So you want to get the recruiter on your side as much as possible, which means that the more information you give the recruiter, the more that they will like you and want to fight for you. That's honestly, if you give them too much information, then you show them the bad cards in your hand, then they'll, in their mind, they can lowball you a little bit, because they have such a complete picture that they'll know that you're not as good a candidate as you'd like to present yourself. So it's a fine line to walk between those two. Am I clear on that?
Actually, this is a really good point, which is that I think a lot of people may not think of the recruiter as much more than a channel between themselves and the interviewers, and whoever's making the final hiring decision. But, it is the recruiter who is going to be making the case for you. And the recruiter is on your side, not the company side, is that correct?
The recruiter is on both sides. The recruiter scores a win when they can get high quality candidates for the company. And the way they do that, is they want the company to be happy, and they want the employee to be happy, or the new recruit to be happy. And they want to set an offer that's so high that the recruit is willing to leave their current position and willing to forego other job offers. So the recruiter themselves are playing a delicate balancing game just like you are.
So this then dovetails well with the next question, which is, let's say I've gone through the interviews, and I have an offer. And now we are getting into the stage of actually figuring out your compensation package. So if the recruiter asks you, do you have a number in mind? How would you suggest responding to that question?
First of all, I would definitely want to have the numbers in mind. We’ll talk about the recruiter or what we tell our recruiter later. But initially, I think it's so important to have done your own research and know what you're coming into. Because they say knowledge is power. And this is one case where having that knowledge is probably one of the most important times in your life financially.
Imagine that you were investing in the stock market, and you were just picking stocks by the name of the company. I like the name Apple, that sounds like such a cute name for a computer company, I'm gonna put a lot of money into it. I think that people wouldn't advise that you pick stocks that way. But a lot of people go into salary negotiations, not having done the research that they would have done in the stock market. So just like in the stock market, there's a lot of information available on the web, similarly, you should do the same thing for your career. There's a lot of information publicly on the web, and websites like levels.fyi, and Glassdoor that gives you a lot of data, a lot of data points on the range of salaries you should be expecting. So that's one source of information.
Another source of information, I would say, that's not in the public databases is you should go talk to your friends, especially those who have gotten offers from the company that you're applying to, and talk to them about the offer that they got, presumably they're good friends, and they're willing to share that information with you. Hopefully, you belong to some professional or networking organizations, such as, Women in Product where there are a lot of conversations within the forums on people helping each other out and trying to give each other information on, on the offers that they're getting to make sure that everyone in the group is getting a fair offer. So that's a second way of getting information not through publicly available websites. And the third form of information would be I think, finding a consultant such as myself who run a compensation negotiation service. And there are other services that you can find on the web, where you can talk to a coach, and they will go through their own databases, and take a look at your specific situation and give you a more narrow range of numbers that you should be expecting.
What research would you recommend candidates do? So definitely, what is the comp range that companies are giving for a particular level. Anything else?
Yes, I would try to understand how the comp is broken down too, because total comp range as a number by itself is useful. But what's more useful is knowing how much of that is in salary, bonus, initial equity grant, and then what their equity refresh policy is. And by having those numbers and by constructing a spreadsheet to see how the numbers add up over time, equity is not a very straightforward thing to calculate, even if you ignore the variations in the stock market, of which we've seen a lot the past couple months, even if you ignore all that, the fact is that when you're given equity, you go through a fairly complex vesting schedule. Usually you don't vest anything for the first year, and then one year into it, you get a quarter of it. And then you either get monthly or every quarter after that, a chunk of it until the initial grant runs out. But then there's equity refreshes on top of that, and those depend on your performance at the company and how you're rated at the company. Depending on on that, the equity refreshes are a fraction of your initial equity grant so that at the end of your four years at the company, when the initial equity has run out, the refreshes stacked together should be approximately what your initial equity grant is. And it often leads to a case where people are making more in their fourth year of the company than they are in the fifth year of the company because of the way the equity refresh grants have stacked up.
But I'm just giving a very verbal overview. I know that for somebody who's not really thought about how their equity looks like and they kind of just get their paycheck, all these numbers may be flying over your head. People should first understand how their current compensation is structured, and then what that new structure would look like if they accept the offer at another company.
Are you aware of any resource that breaks down what a typical tech offer consists of and how the math works?
On the publicly available sites that I've talked about, people just talk about total compensation, I don't think they go into that level of detail. I personally wouldn't want to go interviewing for another job without knowing that level of detail and knowing what my offer is year after year. But that level of detail is hard to encapsulate and capture in a site like levels.fyi for instance. So if you go to the levels.fyi website, you'll see that they have a lot of information, you can choose different companies, you can compare different companies and compare different levels at different companies and see how the pay scales line up. So you can see that, maybe a level seven at Amazon is equivalent to either between a level six and a level seven at Google in terms of total compensation. That's the type of information you can get at levels.fyi and then they'll break that down between the salary, bonus and equity, but they're not going to break down how that equity spreads out over four years.
So coming back to the original question. Say I’ve done my research, and the recruiter asks me do I have a number in mind? What should I say?
In this case, I would strongly recommend not being the first person to give a number. I would say to the recruiter, if they asked me, if I have a number in mind, I would say that I've done research, I've talked to some friends or I've looked at numbers at levels.fyi, I have a rough idea of what the range would be. And can you the recruiter help me get to the higher end of that range.
So you’re using levels.fyi, as the authoritative source for figuring out what your salary should be.
That's one source that you can use to figure it out. And you could bring that up to the recruiter and say, I've looked at those numbers that has this range. I've talked to some other friends, they're either in that range or in the high end of that range, or maybe in some cases might be outside that range. So without naming specific numbers to the recruiter, you can say, I've looked at these sources, whether it's levels or Glassdoor, or talking to friends, and say that I'm aware of the general range, but I would like your help in getting me to the high end of that range. How can we work together in that, what can I do for you to help give you ammo for the offer committee so that you can help argue for a higher range?
And one follow up question to this. I've noticed that sometimes when you do this, you don't share a number, and you want them to come up with a number first, but the recruiter still pushes you for a number. If they do that, what should you say?
I haven't actually seen that tactic recently. Because, at least in California, where a lot of the tech industry is, it's illegal for recruiters to ask you what your compensation is. They can ask you number of shares or how much equity you have invested and they can try to work backwards from your total compensation, but you're under no obligation to give it to them.
So what I've seen more recently is recruiters kind of throwing out ballpark numbers. I recently worked with someone who got an offer from Meta, and before they got to actually a verbal offer, he said the low end of the offer is going to be at this point, it's definitely going to be higher than this. But the low end is this, I just wanted to kind of set your expectations. And then I had advised my client to go back and say, that's lower than I was expecting, because I was looking at the numbers on levels.fyi. And that would be below the median for that range. But I haven't seen recently, any cases of recruiters saying you have to give us a number first. Usually, if you're at the stage where you're going to get an offer, it's incumbent on the company to provide those numbers first.
That's extremely helpful information. So, assuming that the recruiter asked you for a number, you say you’ve done your research and want the higher end of the range. And now they come back to you with an offer. How do you figure out if this is a good or not so good offer, what should be your next step?
So if they come back to you with firm numbers, saying that, we'd like to give you a verbal offer of this, this, and this, where this would be kind of the salary, the bonus, and the equity over four years. And then ideally, the recruiter will be also transparent with you, and talk about what the equity refresh policy is at the company, then you should take those numbers, you should put them into your spreadsheet. And you should compare that spreadsheet against other offers that you may be juggling at this point, or at least what your current compensation is to see how much gain you're making. So for instance, let's say that your total compensation is going to be 500,000, next year, and then you get an offer, let's say from Apple, and then you go through and work out all the numbers and you see that the first year is going to be 600,000, then the next year is going to be 650. Maybe because of equity refreshes, etc. And then you look at that and say, well, in the first year that I'm going I'm making a 20% gain from 500,000 600,000. I'm happy with that, or maybe I'm not happy with that. I think that's one way to look at it to frame things against your current compensation.
And then I think I'd also want to then compare those numbers against what you've heard other people have gotten for that same level of position to see if you're being paid fairly.
And then finally, if you're not happy, after all that, you can come up with a specific reason that you're not happy with it and then go back to the recruiter. For instance, you could go to the recruiter and say, thank you for getting us to this stage, I appreciate the work you've done to get this offer. However, this offer is not significantly higher than what I'm currently making. And if I'm going to take the risk of changing jobs to to join your company, I'd like there to be a more significant bump, you could frame it that way, even without revealing what you're currently making, you could basically say what you're currently offering is you could say it's either below or not high, not much of an increase above what you're currently making. That's one way you could frame it. Another way you could frame it is compared to the numbers I've seen on levels.fyi, this number is on the lower end or not close enough to the higher end as I was hoping for, or say that I've talked to a pair of friends who recently got this level of job at the same company and their offers were in this range. So I was hoping to be hitting this range. So those are three different benchmarks you could use. But what's really important here is not just come back and say, “I want more money!”. It's having a reason that you frame it behind, which can make you sound more rational and less greedy, if that makes sense.
Definitely. And even for the recruiter, if they have to make something happen for you, they need to back it up with some reason as to why that raise is justified. Typically, how much raise should a candidate shoot for?
It depends on the type of company that you’re going for, whether it's a large tech company or startup and the type of position that you’re going for. When you say how much of a raise, do you mean beyond their current position or beyond the first verbal numbers that we're getting from the recruiter.
So definitely compared to my current compensation, if I'm changing a job, then what's a good percentage increase? 20% / 50% / 100% ? So that's one. And the second one too.
So for the first one, I think that if people could be getting 100% raises by changing jobs, then changing jobs would be happening even more frequently than it's happening right now. It's highly unusual. The biggest increase I've seen for a tech company is someone who was recently promoted, and they got the same level at another big tech company, and their total compensation went up by close to 50%. But that is a highly unusual case. I think typically, the compensation jumps are more like in the 20% to 30% range from what I've seen in the past year.
And that is across the overall comp.
Yes. So for instance, someone who's making 500K in total comp at one company interviews at another company, they get an offer, they negotiate, and at the end, they get 600, or somewhat higher than 600 for a 20% or 30% bump in total compensation.
For increase over the first verbal offer from the recruiter - It depends on how serious they were with the number that they gave you initially, in the case that I told you about where I'd advised a client, and the recruiter came back and said, it's going to be at least this number, that number ended up being very much a lowball. And the final number was something 30% or 40% higher than what that initial number was. So there was a huge jump. But in most cases, I think that once a recruiter has gotten the committee to create an offer, and they're giving it to the person verbally, that offer is kind of an anchor, that is not going to change by more than usually say 10% or so.
I'm going to use the case of someone who is earning 500,000, and they get an offer from another company of 600,000. And they're wondering, how much higher can I push it? I'd be surprised if they were able to push that offer more than to 650,000. Once they have that 600,000 offer verbally or say over email, because once it is set, then that means that the offer committee has already evaluated it. However, if it wasn't at that point, let's say that the recruiter had said, we're looking at least 600,000. But it could be much higher than that, then, in that case, because there are no actual numbers that the company is committing to for an offer. In that case, it could go quite a bit higher, or it could go to say in the 700,000 range.
So this is a really important point, which is choosing your timing of your negotiation. So you're saying that the most important time and when there is the most scope for the numbers to change, is before they create that verbal offer?
Yes, before they create the verbal offer. Because once the verbal offer is created, that means it's gone through a committee, and the company has committed to it because they've committed to saying that we're going to let the recruiter give these real numbers to the candidate. If the candidate says yes, we're going to bring them on. So we'd better be sure about these numbers. And when they say we'd better make sure about these numbers, then there's not that much give to say that, we're going to just increase these numbers by 20%, because they have already deliberated to come up with those numbers. So ideally, you work with recruiter to try to get those initial numbers as high as you can.
Which means that when you get your offer, and you're having that first conversation with the recruiter where he or she is trying to figure out “do you have a number in mind?”, that is probably the most important conversation as far as negotiation goes, because you want to give the right frame of reference and your expectations.
Yes, you hit it on the nail, precisely.
This is really good to know.
Can you share some examples of what is the best way to be framing your points without seeming pushy?
That is super important. Because like I said, at the beginning, you're building up a relationship with the recruiter, and you want the recruiter to be in your corner, trying to convince the offer committee that this is a super valuable candidate, that your interview performance and all the other signals that you have justif your coming in at this level and at the high end of this level for the compensation band.
I do want to return to the question you had asked if I could weave in, one of them is about location, I would say that the discussion about location ought to really happen before the interviews even and much before the offer negotiation, because the recruiter is trying to match you up with a hiring manager, the hiring manager may have preferences, they may not have preferences, and they may say, this person can work remotely. Or they may say I want all my team members in the bay area so that we can have team meetings, and that we can be together at least a few times a week. If you live in LA, for instance, and you're not willing to change your location over the Bay Area. At that point, there's no real reason even to go through the interviews, much less get to the offer stage. So I would say working with recruiter, and a good recruiter would be asking you this at the beginning, anyway, about your location preferences. What I would definitely not advise doing is saying, once you've got your offer, now looking at location and saying, Hey, I wonder if I can get a transfer to a different location as part of the process because this is setting back to the recruiter. And it's throwing a big wrench in the plans that the recruiter is doing. The recruiter is going through a checklist and saying, the hiring manager needs someone with this skill set. I found someone with the skill set, the hiring manager wants someone working in the Bay Area, this person says they'll move to the Bay Area or is in the Bay Area already. This is all good. And then as they lead you through the process, you go through interviews to pass the interviews. Now you're working on the offer. Going back on the location is not going to make the recruiter happy.
What would you say are some of the other elements that you should probably discuss with the recruiter right at the beginning? (location is definitely one)
I would say level is another one because they need to calibrate the level of interviewers that you're going to be having because typically you can only be interviewed by that level or higher. So for instance, let's say you were an L5, and you were coming in to interview at an L6 position somewhere else. And then after you go through interviews, you tell the recruiter actually I was hoping for L7 position, the recruiter will be pulling out their hair because they are thinking I just spent all this time talking to the hiring manager getting a list of of interviewers for you who were L6 because they would be qualified to interview you. Now you're telling me that you're only going to accept an L7. If I'd known that and I'd seen your resume - 1. I could have dissuaded you to say that actually, it looks like from your resume that you haven't done a scope of work. I don't think that I could. I should be wasting both of our times trying to assemble an interview panel to interview you at 7.
So before you start the interview process, you should be clear on the level that you're interviewing at, as well as the location.
What about title?
Well, here it's different between big companies and small companies. At a big Tech company, they'll have titles assigned by a by level, like a level five would be senior level six, be staff, seven would be senior staff, etc. And you don't really get to choose so much. At different companies, you might be able to choose an informal title, as long as it's not a keyword like director or VP, or CEO or something like that, you may be able to say, I'm the head of this, or I'm a chief scientist in this. Or I'm an architect in this without using their official titles. But even so you will have an official title within the HR system. So that's at a big company.
At a startup, I think there's more leeway, and they don't put as much as much weight on titles, because titles to a startup are more free, and they can make everyone a director, if they want to, you can come in and say, Oh, sure, I'm the director of this, because it doesn't cost the startup any money to do so. But a large company, let's say, Amazon cannot bring in everyone and say, you're a director here. Because if they start doing that, then everyone's gonna be a want to be a director, and it cheapens the whole title for everybody else.
I think that there's generally more flexibility in equity than there is in base salary, especially once you get beyond maybe even a little bit at level five, and definitely beyond level five, at level six and higher. You can negotiate a bigger change in equity, than you can negotiate for a change in base salary. And bonus is usually a percentage on base salary. So once you've agreed on your base salary, the bonus won't change that much. So knowing that information can help you prepare to say that if I want the biggest change in my total compensation, and I want to keep the recruiter on my side by not seeming pushy. One way of seeming more reasonable is to limit your requests, don't be going to the recruiter every other day and say, can I have higher salary? Hey, can I have a higher bonus? Hey, can I have a higher signup bonus? Hey, can I have a higher equity? Hey, can I have better equity refresh because the recruiters can be sick of all your all your asks.
What I would do is focus on the biggest bang for the buck. The buck here is how much time you have with the recruiter and how much patience they have with you. And the thing is, you want to increase your total compensation. And to do that, I would say just focus on the equity part. Recognize that the recruiter doesn't have that much ability to change the salary band, but they have a lot more to change on the equity band. So after they, even before they get to the initial verbal offer, ask them, Hey, I understand that you're going to put together this package for me, what's most important in this package out of everything is my total equity. If I don't even look at the other numbers, but equity - how much can you push on that for me? And then they'll say, okay, they're gonna push on that number. And I think that's going to have the biggest impact on your total compensation.
Have you heard of cases where the recruiter just says no, sorry, that's not possible.
I have. I had one client, unfortunately, who I think ended up on not as great terms with a recruiter and they came off as being kind of pushy, and the recruiter was not willing to budge for them. And so when they were asking for higher equity numbers, the recruiter basically said, nope, sorry, this is our final offer.
So that's actually really good to know. And I guess the person that you are negotiating with throughout this process, is it the recruiter, should you be reaching out to anyone else, or you're only speaking with the recruiter?
I would say in the majority of cases, you're just interacting with the recruiter. And a lot of people think that I'm interacting with the company. But there are a lot of people in the company and the recruiter is the face of the company to you. It's possible that you might know the hiring manager that you're interviewing with. And if you know the hiring manager as a personal friend, maybe you could reach out and discuss with them. But in a lot of cases, the hiring manager doesn't have visibility, much less power to influence the offer so much. At most, the hiring manager can write a letter to the offer committee saying, I'd like to request that this person be considered as an exceptional candidate. And please kind of make the best possible offer you can for them, and then the hiring manager needs to come up with a bunch of justifications, they'll look at the interview feedback and say, because I'm looking for someone with specifically the skill set, and in the interviews and of the references, this person shows that they have great aptitude in this and they will be an amazing hire for the company and amazing hire for my team. So I really want them on my team. If the hiring manager goes through that kind of effort. That's something that the offer committee will take into account. However, even then the hiring manager is not going to have visibility into the final numbers, the recruiter has more visibility and more influence over being able to try to convince the offer committee to give you those numbers.
So basically, the decision maker is the offer committee and as a candidate, you have no idea who is on that offer committee. And really the only person who has the ability to influence that offer committee is the recruiter. What tactics have you seen candidates use that are very helpful in successfully negotiating your comp?
The tactics, I would say, maybe more strategically, two big things. And I've talked about both of them in this podcast already. But the first thing is to have a solid knowledge base, the numbers you're coming in with and you don't come off as kind of flailing wildly. You are in a delicate negotiation with the recruiter, and it helps your case to seem informed and not ignorant to the recruiter to come in as an equal partner. That's the first one to have as much knowledge as possible coming in.
And the second one is, with that knowledge, build a good relationship with the recruiter. Don't look at the negotiation as a, it's me versus the recruiter. And whatever I can do to either push him or her or bully them, or kind of pull wool over their eyes, or otherwise manipulate them to try to get a higher offer, that is generally not going to work because the recruiter has been through many more negotiations than you have, because it's their job. And the recruiter is in a position of power, but also wants what's best for you. I think there are other analogies that you could look at, to try to understand your ideal relationship with the recruiter. One of them is a police officer who stops you. The police officer is obviously in a position of power, but it’s greatly to your advantage to try to get on the police officers good side, not through being obsequious or flattering, or trying to name drop, or do shady things, but to have a real human connection with the police officer, understand that they're doing their job, and that you're trying to make their lives as easy as possible for them to do their job.
I remember when we were initially having our discussion for the podcast, one of the tactics you also mentioned was how having another offer can give you a lot of leverage.
Yes, that's probably the third most important thing. After having knowledge and having good relationship with the recruiter, having another offer is the strongest leverage that you can have on the offer committee. And it's leverage that you can give to the recruiter as well. If you're in a position where you're interviewing, then I would say it's always ideal if you can interview at multiple companies, especially at companies that you feel like are going to give you similar strong offers, because you can take the highest offer and shop that around. Generally, most companies will match each other's offers. So let's say that I were interviewing at Apple and Amazon and Netflix, for instance. One of them offers me 500, and other offers maybe 550, and other offers make 600 in total compensation. But let's say in that order, Apple offered me 500. Amazon offered me 550. And the Netflix offered me 600. But I really wanted to work at Apple. But I'd like Netflix's salary offer. If I got all three of those offers. Typically, I can go back to Apple and say, you know, I'm interviewing at all these companies, I like your company and your project and your group the best. But I have this outstanding offer from Netflix. And you could show them the offer letter, for instance, and I have an offer from Netflix at 600,000. Would you match that? And typically Apple will match that if they've already given you an offer because it's staring them in their face black and white that Netflix is willing to pay you 600,000. That means as an engineer or a product manager, you are worth 600,000. So they be willing to pay that to you as well, because that's just what you're worth. And then you can end up with your favourite job, at your favourite company with the highest offer.
I think another interesting thing you'd mentioned was that you can use another offer to raise your salary at your existing company also, not just when changing jobs.
I think this is controversial, because some people will say that you're showing disloyalty to your company by doing that. There are two points of view, I would characterize them as the loyalist point of view, and then the mercenary point of view, just to put very descriptive names to them. The loyalists point of view is, say if you're going out behind your manager’s back or behind your company's back and interfering with other companies, and you get another offer and then you come back and shove it in the face of your management saying I should be worth this much, pay me that much. And then the company reluctantly ups your pay. Loyalists will say, well, you better be counting your days at that company, because you've shown your company that you're willing to backstab them, they'll be willing to backstab you and let you go whenever they want. So that's the Loyalists point of view. The Mercenary point of view is that let's all be real and transparent and honest with each other. Companies are only wanting to pay people as much as people will accept and stay working at the company, and people are wanting to make as much money and willing to go to different companies that are going to pay them more. It's a free market, in California we have at-will employment, which means the company for no reason at all may tell me sorry, your employment is canceled, just because we don't want you here anymore. Or you could go to the company and say sorry, I don't want to work here anymore. I just don't want to. And it's no hard feelings, no one can sue each other for doing so. The real effect of at will employment is that companies should always be trying to hire people at the lowest rate possible, and then training them up, and then paying them just enough that they continue to stay at the company. And meanwhile, people should constantly be interviewing to see what position they could get with their current new skill set. Now as a result of inertia, the market is not as efficient as that and most people end up staying at a company longer, and for less pay than the company would be willing to pay them. But the company would lose a lot of profit if they paid everyone what they were worth.
I'm clearly in the mercenary camp than the loyalist camp, the loyalist camp is not a real reflection of how the job market is, in the modern tech industry. Maybe it was that way for our parents generation, or maybe it's that way, in different countries around the world or different industries. But I would say that for the tech industry in Silicon Valley, the mercenary camp is really the correct way of looking at it. And to get back to your question, if you interview for another company, and you get a higher offer, but you realize you prefer the job at your current company, bring that offer back and say, I interviewed at other companies, because people are always talking to recruiters. And I interviewed and got this job offer. So what do you think? Basically, I wouldn't be a jerk about it. When you go back to your management, you should just ask your management gently, what should I do about this job offer?
You’ll get one of two answers. One answer would be they'll let you go, and say sorry, we can't pay you that amount. If they can't pay that amount, then I think you have already shown your hand. And so you should go to the other company. So if you're about to do this, you should take the risk that your current company is not willing to pay it, and that you will look like a fool if you stay at your current company, if they call your bluff.
More likely the company will be like, this person realized how much they're worth in the current job market, we will match that. And they may not match it exactly dollar for dollar, but they may rework your compensation such that you're making about the same now that your current company that you are with the offer that you've got. So just by doing that, going through interviews, getting the offer, be willing to say to your current company I'm worth this much with the implied assumption that if the current company doesn't pay you that, then you have no choice for your own career, but to go to the other company.
Are there are common mistakes candidates make during this entire process?
I would say that one mistake that candidates make, probably the biggest mistake is they never get started on the process and when I say get started on the process, I mean, keep their eye on the market, respond to high quality recruiters and be interviewing. So in the movie Glengarry Glen Ross, there's the famous line from that movie, “Always keep closing” Because the chief salesperson is trying to instill in the junior sales people that their number one job is they should be keep making sales and closing sales. And I would say to anybody working in the tech industry, you should always be interviewing, not like every month, but at least every year to two years, you should be looking at where you are in your career and looking around to see if there are other opportunities. And could you get a 20% - 30%, even possibly a 50% pay bump by going to another company, interviewing and then switching companies or bringing that back to your current company to equalize your pay.
If someone comes back to you and asks if it’s ok I'm switching my job every year to two years? Should they be worried about having so many jumps on their resume?
I wouldn't worry about it. If you are so good, that you can be getting these pay raises every year or two years, it just means that you are accelerated, you're great at your job. And you shouldn't just be getting pay raises, but you should be getting more responsibility because they're correlated. It's not possible that you're going to be say, a level three fresh out of college engineer, and then jumping every year to two years and getting a 20% bump, and do this three or four times. Because the market just doesn't go up that fast. At one of those jumps, you must have jumped into a higher level into the the next level above, which would be like level four, at Google or at Meta. And in doing so you effectively job hopped into a promotion. And that is totally normal and accepted. If I see that on a resume, I think oh, that's someone who's really kind of on the ball with their career. And if I were to hire that person, I know that they would do a great job because they're extending their job skills. They're proactive, and they're a go getter. I might have trouble keeping them on the team unless I give them something high profile enough that they'll get promoted in my company such that they'll get that pay bump at my company. But I know that I'm dealing with a high performer, if I see them jumping around like that.