Ask HN: What should i answer to a question about salary?
I am a fresh graduate trying to find a junior developer job.
I often get asked in interviews how much i think i should be paid.
How can i know that? What is the best answer i can give so that i won't overestimate and underestimate myself at the same time?
63 comments
[ 12.3 ms ] story [ 150 ms ] threadI guess it depends on the company/person employing you, along with how persuasive you can be :).
That's exactly what they hope will happen: You panic, feel pressured to answer, and give some number that is far below what they were willing to spend. Of course they'd be totally okay with it, if it's below market rate.
If I ever ask a candidate what they're looking to make, it's to make sure I can out-bid other offers.
http://www.kalzumeus.com/2012/01/23/salary-negotiation/
I tried it on myself and I was offered way low then I expected - eventually, I was able to increase the offer by 5K, but that's it... I refused the offer. Of course there are other reasons - at least as they explained they had a limited budget (it was a startup...), and the latest negotiated value was 20% more than other people with similar responsibilities...
BUT, this was the startup... I guess with BigCo-s it is better to say your "BIG" number first.
Calculate your cost of living and use that to determine what you need to not only survive, but thrive enough that you're able to be productive at work. A good boss does not want an employee who is stressed because they cannot make ends meet at home.
You can probably find some good personal income/financial tools online to help you determine what your salary should be given your costs.
While it's common, the tactic of asking an employee what they think they "deserve" is a rather aggressive (IMHO) negotiating technique. Keep that in mind when dealing with management/ownership in the future.
If they try to push you down lower, this isn't the place for you: your cost of living is what it is, and forcing you to work for less than that is simply unfair. Keep looking for a better place.
Not to mention that your first salary impacts all your future salaries (it acts as a baseline), when your cost of living is likely to be much higher.
This kind of living costs calculation (or something like it) is useful if you're starting your own company -- and want to figure out what profit you'll need to be making before you decide "this is worth the effort".
But if you're being hired to do a job, this isn't a good approach.
For high-value workers, there is a large gap between those two. Negotiating is about dividing the surplus.
Your strategy suggests "give almost all of the surplus away."
Review the average salary, multiply that salary by 1.2 (increasing that salary by 20%), and that is what you should tell your employer.
Why 20% you ask? Well, Glassdoor has data from several years prior, meaning the average will be lower than the current average. For example, I was offered 40% more than the Glassdoor average for the same position.
In general, when negotiating salary make an employer put a price tag on you first, then if it is fair, you can go for it or negotiate a little more, ask for extra time off etc. If it is a low offer, they may be testing you to see if you know the market, don't be afraid to come back at a fair market value for new grad in your area.
And don't accept an offer below market with some unwritten promise to increase your pay if you do XYZ. That isn't fair to you and the employer is trying to take advantage of you. If you get a fair offer and you ask for say $2k more, and they say well if you execute over the first 90 days with X Y Z and those are tangible real goals, not subjective, then that is reasonable. Just make sure it is in writing in the offer letter.
You can almost always say you have an interview scheduled on (some day about 4 days away) that you've committed to, and attend whatever interviews you can. In a competitive situation, you should get market price. If a company wants you on Monday, regardless of what they say about the offer expiring, they will usually still want you on Friday, at least in this market. Also, when you start scheduling interviews, try and make them a few days out, so you can schedule more before then.
"My salary requirements depend on the details of the position and non-salary benefits offered."
Me: "That will depend on the other things in the compensation package, such as the paid time off."
HR: "Everyone gets 20 days. We have gym, swimming pool, and medical insurance. We don't offer stock and don't give bonuses: it is a monthly cash based salary structure. Now tell me, what's your minimum?"
I ended up spitting out a number. How should i have responded ideally?
I got that once. There's not much you can do about a situation like that unless you're willing to bypass HR and cold-mail tech managers about your application.
If they balk at that, you just point out that you had to give a high number because you lack information - you'll be willing to negotiate once you know more. After all, do they want to hire someone who will cost the company money by underestimating risk and costs based on incomplete information?
It's a junior dev. Most companies don't expect them to estimate anything. As far as most recruiters are concerned junior devs are perfectly replaceable and if they can't get a number or get a number $20k over everyone else, they have plenty more to choose from.
The best thing you can do is not to play the game with mediocre companies with mediocre recruiters, if you're good enough to pull that off.
If you really end up with HR from hell, either they'll drag the company down with them or they'll be separated soon -- good riddance.
Unfortunately probably not a great idea if you want the job and you're dealing with HR Drone and there is a possibility that the HR software might ding you for being overpriced.
I'm not a junior dev, but if this happened to me I'd probably walk before even getting to that (with a short message to the interviewer telling them why).
It is a negotiation tactic. They know perfectly well what they are paying their other developers, what the market rate for that position is, and what they are willing to pay you. The only purpose of this question is to trap you into a low number, don't fall for it.
Assume that since you've gotten to the negotiation phase, you've exceeded their expectations.
Ask, 'how many people are you hiring?' If it's more than one, at the same position, then they may have more demand. It also may imply that their budget for hiring is above average.
Ask, 'how difficult has your interviewing been?' If it's been difficult, and you've reached this stage, then your in a better position for negotiation.
Ask, 'what have been your main criteria in hiring?' If it points to a rare skill that you have or some background experience or knowledge that is unique, then you're in a better position.
Ask, 'are there any other candidates that you're interviewing, and how do I measure up?' If there are no other candidates, and/or you're the best candidate that they have, then you're in a better position.
Ask, 'do you have upcoming milestones or deadlines?' If so, then may have higher immediate demand.
Ask, 'what are your goals in hiring me?' If they want to put you to work immediately, then you're in a better position. If they are primarily interested in grooming you, they may have more patience to hire.
Ask, 'who approves the hiring, and are you able to hire me today?' If someone else approves, it may be a harder negotiation. If they can hire you immediately, then you're in a better position.
Finally, don't set your price, first. If they ask, 'what is your price?', ask them 'what is your typical range for this type of position?' Get them to offer their price first because it's always on the lower end of what their range is. Then, consider your position. Ask for something that is slightly outrageous. For example, let's say you determine that you're in a good position. They offer you 80,000. Say that you were thinking more in the 120,000 range. Read their reaction to that. If they seem offended, say 'but, that can be negotiable, based on your benefits, etc.' Then, talk to them about the other benefits of the position, and come down slightly. But, once your initial price is set, that will be the baseline for further discussions.
Always come to the table with as much information as possible.
Always ask for add-ons. Ask for more non-financial benefits. Ask for more vacation. Ask for a more flexible schedule. If it's a big company, you're not in a good position to ask for extras, however.
Tell them that you'll give them an answer very soon, and set a specific date. It will show that you're serious. If you plan wisely, you can have multiple offers from different companies at similar time. Use these other offers to both gauge the demand and to play each offer against other offers.
And, remember, it's always supply and demand.
Someone once said to me that sales is about desire and the price. If a customer desires something then the only reason they won't buy is price. In this case you're the goods and the salesman.
Do people really counter with salaries that are 50% higher than the initial offer? Maybe it is just the nature of the employers I have dealt with in the past, but I have always felt anything in excess of the 5% - 10% range just meant that you and the company were too far off in expectations for a deal to work. In fact, a few months ago I rejected a seriously lowball offer where the difference was similar to the numbers you posted; I didn't even bother to counter. Is it really common to get companies to move by double-digit percentages on initial offers?
Edit: I should point out that people at this company had already told me how hard it was to find qualified people. There were plenty of other indications that they could not afford to be throwing away candidates.
The particular case I mentioned was complicated because: a) the initial offer was knowingly less than I currently made; b) I previously worked for the parent company of the company making the offer and the offer was the same salary grade and almost the same salary I had when I left 2.5 years before. I'm not sure I would have tried to negotiate even if I thought I could get them up 30% - 40%.
Plus, unless you want the job very badly, it (usually) doesn't hurt to ask.
When I joined Yahoo a decade ago, for example, I ended up accepting an offer 40% over the top of the advertised range, after demanding more. When they gave me the 40% offer, they apologised that they really couldn't go higher (it'd push me too far up over some other people in the department) and offered me more options instead, and guaranteed me a review after 6 months instead of 12 to bump me up further (which they did).
I've never taken a job at only 5%-10% above initial offer, and don't think I ever will - I know from my own hiring that we're always prepared to stretch more than that if we've first decided on a candidate.
After several rounds of interviews, they actually came back with an offer for much higher (they did ask me how much I am expecting to get paid before making the offer). I countered back and definitely got a salary offer that was certainly way more than 50% of the original intended offer and about 30% more than the actual offer they actually ended up making in their initial pitch.
I strongly suspect these sites are being gamed. Either that, or the numbers are based on surveys that are mostly filled in by people that are worried about being underpaid (guess what, that means they probably are).
In my (totally anecdotal) experience Glassdoor undervalues by >=20% even at the same company.
However, after going through and guessing salaries, the "crowd predictions" are absurdly low for my location and industry.
I saw a few profiles of people at my employer in related fields, so I have a fairly good idea of what their salary range could conceivably be. The crowd predictions were off by a factor of ~2-3x (on the low side). I just saw a profile of a reservoir engineer with an M.S. and ~5years of experience at a major oil company. The crowd guess was 68k. $168k would be reasonable (maybe a bit high). $68k is completely absurd.
Answer: I'm happy to evaluate the entire compensation offer package if we get to that stage. I understand junior developers are getting in the range of low $60s-to-high $70s. *Then flip the question: Can you share with me what your compensation band is for this role?
http://www.iwillteachyoutoberich.com/blog/salary-negotiation...
Read "Ask The Headhunter's" articles/columns on salary negotiation for some background information.
If you say too large of number, you won't be hired. If you say too low of number, then you either leave $$$ on the table or they wonder why your number is low.
I've asked "are you offering me the job?" If they say no, then I ask if we can continue to see if I fit. This did not always work well.
Someone on HN posted the link to the Noel Smith-Wenkle method which is a better method and it works well, I've used it more than once effectively.
http://infohost.nmt.edu/~shipman/org/noel.html
The first method is a set of websites or statistics that you can find pretty easily. You'll hear Glassdoor and Salary.com as a couple examples. Some schools might have data on their past graduates. I know that Carnegie Mellon [1] publishes their data, which includes the employer a graduate joined, the location, and some compensation data.
Unfortunately, much of what you'll find is anonymously self-reported, and when people self-report salary information they are probably more likely to exaggerate up than exaggerate down.
A second method of getting numbers on market rate is from talking to people. For you, that may be other graduates who have already landed jobs or people that graduated last year who may be willing to share what they were paid. Recruiters who work local markets are also a good resource for this information, as they actually see the job offers and are likely to have more accurate figures than the self-reported data seen on salary websites.
As for overestimating or underestimating, most people here are going to tell you to never give a number first. Negotiation is described as having a winner and a loser, and if you don't get the maximum amount someone was willing to spend than you lost. There isn't a clear way to determine how much someone would have spent, so approaching negotiation in this win/lose manner isn't all that useful.
Someone who knows the market rate for their experience and skills is in a much better position, and someone with a long track record of successful employment that knows their market rate is completely set and more able to use tactics in negotiating that are being offered to you here in this thread. Unfortunately, you (as an entry-level candidate) won't typically have that same amount of leverage or power in negotiations, as entry-level candidates are generally considered more homogenous.
In other words, if a company finds an entry-level candidate being somewhat 'difficult' (for lack of a better word), they may take the attitude that there may be 10 other entry-level candidates who won't be. I'm not saying you shouldn't negotiate - in many cases you should, and in some cases you shouldn't (most obvious being when a company offers you what you requested or even more than you requested).
Last bit of advice - if and when you give your number, don't follow it with anything. Entry-level candidates have a tendency to state a number, and if there is even a few seconds of delay by the other party they add "but that is negotiable". Don't do that. There is an article on that a few weeks ago [2] that explains a bit more.
1 - http://www.cmu.edu/career/salaries-and-destinations/2014-sur...
2 - http://jobtipsforgeeks.com/2014/08/08/negotiable/
Also make some calculations, and start with housing. Calculate your salary to be no less than 30% of this expense since it's the one more critical and gives a good all around base which depends on your location. If you don't pay for housing now, you'll in the future, so better take that into account and save it in a bank.
Then give a range, say "I'm in the X and Y range, but I would feel much more comfortable making Z" where X<Z<Y, X is your lower limit and Y is the top of the line for what you've seen online.
Finally, don't go into an interview talking about salaries unless the potential employer starts talking about it. They might find it rude on your part.
BTW, if you're starting to look for jobs, this tool might help you (https://github.com/Eldelshell/JobHunter) <plug shameless="true"/>