As an IT consultant, I have had, over the years, needed to negotiate salaries and later contracts for my work. I’m still not very good at it, though in general I’ve learned enough to stay employed during even slow times. Throughout all this, I’ve found that there are a few good rules of thumb that help me determine what constitutes my upper and lower limits, and especially if you are in the tech space, they may prove useful to you as well.
Establish a Range – and Stick To It
Before you begin your own job search, do some homework and find out what the prevailing wages are for your specialty, which will usually be determined both by how rare the skill is and how much experience you have with that skill. If you aren’t making at least the minimum for that field, then that should be your floor.
If you’re making more than the maximum for that field, it’s probably a sign that you need to broaden your search to look for positions that have more management responsibility. Technical acumen can take you far for about ten years, but after that, look for project manager, architecture or “senior” analyst positions, because someone hiring you will expect you to have those skills for what they’re paying.
Note that a lot of less reputable recruiters will try to talk you down. This is usually because they typically know up front what the hiring companies are willing to spend, and they use it to calculate their own cap, which is the amount that they charge to the business to represent you (if they are the ones paying your contract – so more on agencies below). The higher you place your own expectations, the smaller the cap that they earn, so it is in their best interest to talk you down. If a recruiter does this to you, walk away. Do not sign anything, do not consent to anything. I have, over the years, signed such contracts and have always regretted doing it.
On the other hand, if an offer seems too good to be true (and above your threshold), it may also be a red flag that indicates that a company is desperate, the situation is dire, and what is usually needed is better management. If that’s the case, be willing to accept the offer if it comes with hiring and management authority, because it is almost certainly not going to be the case that the problem is exclusively technical at that point. More money means more responsibility, but if you don’t have the authority to handle that responsibility, you will fail.
Does It Help Achieve Your Long Term Goals?
When the wolves are at the door, the idea about what you want to be doing five years down the road may seem absurd, but never, ever take a job if it does not provide a means to an end. When negotiating a salary, this is actually one of the major determining factors: I’ve taken jobs before that looked like they were big money out of the gate, but by the time I wrapped the project up I was a nervous (and often physical) wreck, money went primarily into dealing with all of the negative factors that came with working with the job (family discord, health problems, even a heart attack at one point), and I was if anything farther from my long term objects than when I took the job in the first place.
Pay attention to the signals around you, especially about what people most want from you, not necessarily what job title you’re looking to achieve. In college, I published a couple of small press magazines, and over the years I’ve always had a side job involved in publishing, journalism and blogging, even it wasn’t my “main” job. I’ve even written and co-published a fair number of books aimed at technical audiences, as well as the odd novel or two, but I always saw myself as being primarily a programmer.
Yet when I took programming jobs, I found that while they were usually pretty decent money, they were almost chaotic, often poorly managed, and frequently failed to accomplish their objectives, despite the fact that technically they were not that complex. They were also very stressful because of these factors. Additionally, I would get caught up in the politics of these projects (as a senior consultant, it’s one thing that you strive not to do, because it reduces your objectivity), making it a lot harder to keep seeing the big picture.
A lot of my own writing would reflect this – it was often a good place to put down my observations about what worked and didn’t work in business, but ironically (and perhaps understandably) those same companies weren’t particular happy to have their dirty laundry aired, even if no names were ever named.
It would take my wife Anne’s comment to make me realize what was wrong. “Kurt, don’t get me wrong, you’re a decent programmer. But you’re a better journalist. You’re too much of a story-teller and explainer of things to want to just keep your head down and code.”
“But there’s no money in journalism!” I replied back.
“Doesn’t matter. It’s where your soul is. It’s where your passion is. You probably also haven’t found that there’s money in journalism because you’ve fooled yourself into believing that, because Kurt Cagle the Programmer just sounds better than Kurt Cagle the Blogger.”
I’d also realized, after she said this, that I’d been quietly, and somewhat unconsciously, laying the groundwork for doing that for several months, and that the only thing holding me back was my tendency to jump on jobs because they paid well, even if it wasn’t helping me meet my objectives.
When I finally came to grips with this and focused on my goals and objectives, I discovered that I was actually able to survive and even thrive in that field.
Your time is finite. When you take a job, you’re spending an irretrievable resource – your life – for money. If you don’t make it worthwhile for you, then you’re just wasting time.
Who Are You Actually Working For?
Here’s a subtle truth that you seldom hear about on job boards or even popular media. Most companies do not like to hire people. Every person being hired by a company represents a capital investment of roughly four times their annual wages. That’s money not going to shareholders or bonuses.
A brief history lesson:
Temp agencies have been around forever, but the modern temp agency got its start in the 1880s in England providing secretaries, nannies, domestic staff and groundskeepers for the burgeoning nouveau riche. The arrangement worked out well for both the agencies and its customers, and even (to a much more limited extent) benefited the workers because it both provided a more stable income (paid by the agency) than the often capricious aristocrats tended to do.
However, as the level of education increased and options opened up, especially for women, in the early 20th century, many people who would otherwise have gone into service went into the growing business sector instead, to the extent that domestic service jobs all but collapsed. Agencies adapted by specializing – largely by managing contracts for secretaries. Originally most secretaries were male, and their primary jobs were to manage all of the business related tasks of their employers, such as drafting of letters, keeping accounts, and managing schedules. World War I saw many educated men being drafted for service, and consequently between this and the emergence of the typewriter, most secretaries were drawn from the pool of educated young women instead both in England, and in the United States.
In general, while the wealth of companies grew enormously during this period, comparatively little of that wealth went to the secretaries, being absorbed primarily by the agencies that managed their contracts. Most secretaries did not work for the companies they worked at, and seldom participated in any significant growth with a company even if they had been critical in that company’s success.
When computers began to make their way into businesses, most corporate managers had become phobic about the idea of touching a keyboard. That was menial work, something only suitable to be done by … women. Not surprisingly, many of the first programmers after the end of World War II were consequently women, because, well, they had the skills to most efficiently use keyboards, and the logical mindset to handle this sort of work. It was only later, as demand for programming talent rose (and with it salary potential) that young men began to flock back into IT, in many cases displacing many of the women who’d been there from the beginning.
Temp agencies saw the opportunity to make money, and began to provide technical talent fairly to companies early on. Not only were companies pretty much primed for this – they had always bought their keyboarding talent from agencies – but it also cut out all of the complexities of actually hiring people on as staff to just that small percentage who were essentially managers. Companies did this for the very simple reason that they saw technical people as contingency workers who didn’t do the important jobs of actually making money for them (remember that most corporations have long been biased towards salesmen, to the extent that even if a designer or a developer was instrumental towards the creation of product, it was the salesman who translated that product into income (at least this was the mindset).
Such agencies also provided a way around government regulations requiring health care and other benefits for workers. By utilizing agencies, most companies could reduce its costs there, while at the meantime the agencies could get away with providing the absolute minimum such benefits required by law. They often ended up becoming the gate-keepers into large corporations, typically by handling most contingent contracts going in, and serving as a probationary arena for companies who could then take several years to decide to move someone into a full time position, while IT support staff could languish in agency ghettos and be terminated at a moment’s notice with almost no real legal recourse.
Many agencies have since moved into the role of also becoming recruiters, though typically with the intent of snapping up potential talent then reselling that talent through their own agency rather than placing job hunters with positions actually working at the companies they are ostensibly working for.
Unless your primary goal is getting experience (which is actually a pretty good use for agencies), be very careful before you sign anything about understanding who you are actually working for, who is managing your payroll, taxes, and benefits, and what those benefits actually entail. Sometimes a bit of detective work will let you also figure out who they are representing (it’s not unusual for several of these agencies to see the same contracts at the same time) and allow you to bypass them altogether. If you do decide to go with an agent, get information in writing about how much of their employees gets converted to full time with the client (it’s usually a lot smaller than you may think).
It is not in your best interest to share any financial information with recruiters. They have a piece of the puzzle you don’t have – what the client is prepared to actually pay to fill the job – and that is a powerful bargaining tool in their favor. If they will not accept that you prefer to negotiate directly with the client, then walk away. If you really want the job, your chances of getting it actually will go up if you’re willing to take the effort and find out who is in fact doing the recruiting.
How Getting Hired Is Changing
I grew up at the very beginning of the personal computer age, so a lot of what is taken for granted today was only a distant light when I landed my first programming job while in college. Then (in the early 1980s), your resume was sent in the mail, was often still typewritten, and was an indispensable tool in getting a job. Today, that’s no longer really true.
I am sometimes astonished to find recruiters coming to me with copies of my resume that were sent out in response to a job from five years ago. I also find that today that many companies actually go with LinkedIn or similar sites that actively track the same information as a resume and are usually more up to date. Their HR may still need a resume as a pro-forma measure, but it is becoming less and less relevant as a tool for getting a job, in favor of community based measures of endorsement, activity on social media, and code samples in online repositories.
Personally, I think this is a good thing – yes, you need to show skill competence, but increasingly what matters in the workplace is a more holistic approach that illustrates competence, modalities of thinking, communication strengths and the desire to help others. This also reflects a change where fragmentary text searches are being replaced by a broader semantic view of connectedness, and where networking is beating out cold-calling as the means to both find talent and find those who could use that talent.
However, this has some profound long term impacts upon getting a job, and negotiating in general. Many newer companies, especially startups, have all but given up on traditional recruiting methods, and instead are focusing upon social media networking to reach out to potential candidates (or get recommendations about such candidate). This means that among other things it is easy to have conversations that allow for both better interaction before hiring and the ability to negotiate with a company directly.
This is an advantage that should not be underestimated. First, it makes it easier for a person to negotiate beyond the salary, and seek benefits (or concession leverage points) that wouldn’t be available in the gated world of agency-oriented recruiting. Can some kind of remote working arrangement be arranged? Is some equity ownership in exchange for a reduced salary feasible? Can I bring my dog? Are you willing to provide training/retraining in exchange for an extended commitment on my part?
These kind of negotiation points have traditionally disappeared in the presence of a broker who is only concerned about getting x dollars out of their prospect call, which is important, because many of these negotiation points are critical to what turns a job from being onerous to being enjoyable.
This leads into the last point:
You Are Also Interviewing the Company
Most job negotiations become one sided deliberately. The company has the money, has many people who will weigh in on whether you would be a good fit, and has the potential to screw you over if they decide its in their best interest. It is their contract that you will be signing, and if you say no, well, there’s always a thousand other candidates just clamouring to work for them.
This attitude is fostered because it is in the best interest of the company offering the job to seem omnipotent to prospective candidates. Cowed candidates will almost invariably take what’s offered, rather than negotiate for better terms, even though what’s offered more often than not is as minimal as the company can get away with.
However, a contract is signed between two equals, and if you go into a job without that attitude, you will get screwed. That doesn’t mean that you have to arrogant or rude (and in general going in acting in such a way will almost certainly not get you the job). Rather, it means that you need to recognize that you are bringing something unique to the relationship – you – and if they do not believe that you have something that they need, they would not be negotiating with you in the first place.
Supply and demand works both ways. You have the option of walking, of going to their competitors with your skills, your networks, and your perspectives. You have the option of starting your own company, and becoming a competitor of theirs in your own right. Part of the reason that there is a (possible) job shortage is that there are enough people who in general have recognized that they could get a better deal by creating their own company that the available pool of candidates willing to work for “the man” is drying up (and often these micro-companies do not show up very well in any survey). Yes, many of those micro-companies will fail, but so will many more established companies. That’s the nature of business.
What that means in practice is that while you shouldn’t get greedy, neither should you let a company steamroll you when negotiating. As a rule, bargain for what you think is fair, and add a pad of 15-20% to give you room for negotiation. Don’t forget about factors like cost-of-living, state taxes, the cost of relocation (if you can’t negotiation a relocation benefit). Also don’t forgot about ensuring that you have the authority to do what you need to do – it’s remarkable how many companies hire people without giving them the authority to do their jobs properly. Be prepared at any time to say thank you but no thanks.
If for whatever reason you do decide to go with an agent, make sure that agent is working for you, not for the company, and understand up front exactly, down to dollar amounts, what both you and they are getting for that service. Do your homework with both companies and agents, make sure that they are legitimate, accredited, and have solid reputations.
Getting a job is as momentous as buying a house or a car. It will commit you to a course of action for years and potentially decades, will affect where you live, what kind of family life you have, and what career options are available to you in the future. Yet we routinely give companies incredibly sway over our lives because we fail to negotiate as equals, let ourselves be conned by middle-men and opportunists, and fail to assert ourselves when it comes to valuing our own skills, perspectives and networks. Such change can only come from within.
Source: Five Tips for Negotiating Jobs