[If you’re looking for earlier stage tactics, or to get introduced to this post, you’ll want to start with Part 1. Otherwise, keep reading!]
Bargaining heuristics (when you make counteroffers)
The oft misunderstood, highest intensity stage of negotiation: going back and forth on price. When engineers say negotiation is stressful, they mean bargaining is stressful – the waiting after sending a counteroffer, the pressure of advocating for yourself, and the energy it takes to be wisely disagreeable can be a drain. But not for naught! This is where you earn your keep.
Strategic heuristics
These heuristics are high-level, from the 30k-foot-off-the-ground view. We’ll get into the low-level practical view later, but for now, it’s about the strategic heuristics.
Heuristic #11: Monotone voice FTW! (Introverts everywhere celebrate?)
This MIT study found the outcomes of negotiations can be predicted based on the degree of vocal variance. The folks who display more tonal variance are more likely to lose, and the ones who use less variance are more likely to win. If you bargain on the phone, keep a neutral tone throughout. You want to sound measured, analytical, present yet cool. If you write a counteroffer in an email, remove all emojis and exclamation points. If you’re a super dynamic speaker or typer, wonderful, save it for later, in a situation where it helps.
This picture is from Inkforall.
Heuristic #12: Current, Target, Ask
When you make a bid to a company, they’re much more likely to split the difference or say no than they are to acquiesce; regardless of what you ask for, it’s highly likely you won’t get it. Unsurprisingly, the best way to get what you want is to ask for more than what you want. When you receive an offer, don’t worry about what they have said or what they can do. Think of what you want; this is your Target. Your Ask stands to be higher than your Target, and here’s how to find the Ask.
If you have one offer, then calculate the highest number you can ask for without being unreasonable. This is easier if they’re a more well-known company because there’s more of a likelihood they’ll have a wealth of information on websites like levels.fyi. Filter for engineers like you, and look for patterns. If the highest salary listed is $172k only comes up once, maybe that’s a fluke. But if the salary of $168k comes up 3-5 times, that’s a pattern, so you know it’s reasonable to ask for it!
If you have competing offers, make bids based on mismatches. If Google has a higher base, and Facebook has more equity, then ask Google for more equity (using Facebook’s higher equity), and Facebook for more base (using Google’s base). This can be repeated for as long as there are mismatches.
Heuristic #13: Great candidates don’t ask if it’s negotiable, they assume it is
Never ask “Is this negotiable?” It marks you as a rookie. Engineers who do this may think it’s respectful to the company but that’s missing the point. Negotiation is a given, companies expect it from good candidates. If you were selling watermelons at a farmer’s market, and one customer asked “Is the price flexible?” While the second customer says “Will you take 2$ instead of 3$?” The first one asks a naive question, so you bat it down without thinking: “Nope, sorry.” The second requires you to think, and assuming the bid is reasonable, you’ll at least entertain it.
Photo courtesy of HBR.
Heuristic #14: Hiring managers can influence the compensation team
If negotiating with a large company, you might hear the hiring manager feign helplessness saying they can’t influence the comp team, implying something like the comp team is an independent impenetrable force. This isn’t true. Like all other processes, there is the possibility of exceptions to the norm. Hiring managers can tell the comp team information such as “This person is a top priority hire” which will increase the likelihood of the compensation team awarding a bigger amount.
Heuristic #15: Ignore 3rd-party recruiters
Regardless of what they tell you, it’s likely they don’t know the specifics of this hiring manager, this role, or the compensation package. Even if they did, they have no incentive to influence. If you get an offer, and it went through a 3rd party agency, ask the actual end client (the company you’d be working at) if you can chat about compensation with them. If they agree, or if they opted in earlier by talking to you about money, you can proceed to ignore the 3rd party recruiter until the process is over.
Heuristic #16: Recruiters will say your current comp is as good as another offer, it’s not
If the only leverage you have is your current job’s compensation, it’s harder than negotiating when you have 1 offer; this is like squeezing water out of a stone. What usually happens is they offer you slightly more than what you’re making or slightly less. Speculatively, it seems to happen because they know you’re unsatisfied enough to think about leaving and they assume they can get you for cheap (because you don’t have multiple options). Unless it’s an extremely rare situation, this might be the toughest position to negotiate from.
Another example of how sharing info with recruiters about money, like sharing info with police, can and will be used against you!
Thanks, StutterRockstar, for the picture.
Heuristic #17: The first time you hear it’s the “best they can do” it’s not true
I’ve heard “I want to know if I’m pushing too much” dozens of times, usually from candidates who have sent one counteroffer. Mainly they ask because the company said something slick, such as “We’ve reached our max.” To stop there is the mistake of taking the company at their word. Remember, they can pay you whatever they want. They have a war chest. It’s their job to say “no” because most candidates will take what they can get and shuffle on home. The first time you hear they’re tapped, it’s not true, it’s just smart. If you were them, you’d say the same.
Tactics to proceed pushing include a competing offer increase, being firm on your price, and changing focus (to bargain with the hiring manager instead of the recruiter, for example).
Heuristic #18: Most senior-level candidates get weeks, not days, to decide
Contract positions, aggressive recruiters, 3rd party positions, and projects that are on fire might ask you to decide in less than a week. With quality positions, it’s normal to have at least 2 – 3 weeks. The more senior you are and the more leverage you have, the longer they’ll wait. Some engineers get months to decide. This message is not for them. If a company extends an offer and gives you less than 6 days to decide, that’s a clue that something is wrong with the company. Especially if you ask for more time, and they say no. And even more so if they spring it on you, as opposed to from the beginning of the process saying they have a 6-day turnaround.
If you end up reneging on an offer because of aggressive practices, don’t sweat it. Once I congratulated a hiring manager, “Rockstar Engineer just signed with you!” To which he said: “Let me know when they start” because reneging was so common. In case you’re worried about your reputation, the bigger the company or the more messy the recruiting, the more likely they don’t sweat reneging in the long run.
Heuristic #19: If it doesn’t help, don’t share it
This is one of the most straightforward and helpful heuristics for interviewing, talking about your work history, and obviously, talking about money! If it adds to your valuation, then say it, and if it doesn’t, then there’s no reason to say it. If Google is offering less base (or a lower level position) than Facebook, don’t tell that to Facebook. If Uncle Tony’s Pizzeria is your competing offer to Google, don’t mention the name of the no-name company to Google.
The Sopranos script was renowned for what it didn’t say, they didn’t share unless it helped. Courtesy.
Heuristic #20: How much would they have to pay you to live without X?
If a competing offer is giving you remote work, and Google is not, then how much would Google have to pay you to not work remotely? Putting a dollar value (ascribed by you) to non-monetary features of an offer is a straightforward way to equalize offers that, on the face, look incomparable.
Heuristic #21: Push to the degree of the leverage you have
Your leverage is the total of a slew of factors, many of which you don’t have access to. However, an easy rule of thumb is the more senior you are, the more you can push. The same can be said for the more niche your skillset, and the quality of your competing offers. Competing offer quality is not only the size of the numbers, it’s also the relevance of the company. A Google competing offer is the best quality if you have an offer from Facebook. The same cannot be said for Uncle Tony’s Pizzeria (even if the numbers are as good).
That doesn’t mean juniors with a run-of-the-mill skillset and one offer can’t push! Even those folks can healthily push multiple times. The message is for the high-value engineers who don’t realize they are: if you’re super senior, super niche, or have really good offers, push until the company’s tapped, and don’t bow out early because of fear.
Tactical heuristics
These tactical heuristics are about the low-level details and the practical down-to-earth value. You can implement these more directly, and see the difference more immediately.
Heuristic #22: No haggling live
Haggling back and forth is when multiple prices are exchanged quickly. In the moment this involves math, thinking on your feet, and serious nerves. It’s better off avoided, especially if the other side is more practiced than you. Unless you’re an expert, bargaining in real time can only hurt you. For everyone else, the recommended maximum allowed per conversation is: a) naming one price, or b) commenting on their one price. That way you can collect yourself, and then go over another price in the next conversation. Do this to avoid negotiating against yourself.
Don’t haggle live with people who do it way more than you, like this guy, courtesy to This is Money.
Heuristic #23: Laugh off lowball offers
Lowballs happen. When they do there are only 2 options: entertain it as is, or communicate how big the gap is. The first option occurs because a candidate didn’t clarify (with themselves) what to do if an offer was too low and got dragged into something they didn’t plan for (because they weren’t clear with the company.) The second option is much more effective. In a friendly voice, respond with a laugh followed by “I’m sorry, but that’s much lower than I was anticipating, significantly lower actually, and I’m nervous because the gap is really big.”
Heuristic #24: If you have one offer, ask for 10 – 20% more
The traditional counteroffer is between 10% and 20% higher than the current offer. If you’ve never negotiated before, or don’t know what to ask for, ask for this. It’s low enough to not be unreasonable and high enough so you still can get a win.
Heuristic #25: If you have one startup offer, ask for 1.5-2x the equity
This is a best practice for negotiating with a startup. It may seem high, but compared to how many undiluted shares outstanding they have, it’s not. It’s a normal course of action and a straightforward way to negotiate for startup equity. And in general, if you’re unfamiliar with equity the gold standard resource on the net is this GitHub page.
Heuristic #26: A range of two strange numbers > a single number
When you make a bid, or a counteroffer, asking for a single number limits your bargaining power while asking for a range expands it. If you ask them for 50k more, there are only 2 possible positive outcomes. They can split the difference (giving you 25k) or give it in full (50k). But if you ask for 51-59k more, something interesting happens, there are 4 possible positive outcomes. In addition to splitting the difference (~25k) or awarding the full amount (59k), they could also split your range (55k), or hit the bottom end of your range (51k).
Asking for strange numbers sounds too simple to work. Strange numbers imply you did some math. Too many engineers, unfortunately, negotiate in multiples of 5k and 10k. When a savvy engineer asks for 51-59k more, they seem less likely to budge (than if they had asked for 50-60k). It appears they have more bargaining power. Amazon does this all the time, too; they offer strange signing bonuses (like $108,342.65), and candidates often accept without pushing for more in part because the strangeness of the numbers makes them look final.
Picture of strange numbers courtesy of AMS.
Heuristic #27: “I have another offer” is powerful even if the offer sucks
You have an offer from Doordash and receive a competing offer from Uncle Tony’s Pizzeria (which is the lowest you’ve ever received). Doordash doesn’t need to know all the details, but they do need to know you have another option to activate their FOMO (which you now know can be good for you). It’s more effective to tell Doordash “I have an offer from another company, and Doordash can improve the offer to $337k – $344k to make it more competitive” rather than asking for more without sharing that you have another offer.
Heuristic #28: Never say you have more than a “couple” offers
Getting a bunch of offers is all fun and games until you tell a company. I’ve seen senior engineers get exploding offers put on them because they shared “I have 7 offers from Pinterest and Facebook and …” As the list went on the company’s chances of landing that engineer plummeted, so they got desperate and put a 48-hour deadline on her. Had the candidate played it humbly, she would’ve had weeks to milk that cow. It doesn’t matter if you have ten offers, only say you have a couple.
Playing it humble is the best shot if you get a bunch of offers thanks NYT for the pic.
Heuristic #29: Treat your offers like SAT scores
You have an offer from Amazon for $200k base and $400k equity and an offer from Apple with a base of $300k and $300k equity, and you get an offer from Google. Tell Google “I have 2 offers from FAANG companies, the numbers I have are around $300k for base and $400k for equity.” In other words, combine the best parts of all the offers into one mega offer. Back in the day, you combined your best Reading scores with your best Math scores to submit your best overall mega SAT score. The same logic can be applied here!
The best SAT movie of all time, thank you, IMDB.
Heuristic #30: Never show a full offer letter
A recruiter who asks for an offer letter is looking to play “apples and oranges.” In this game, all they look for is mismatches, such as “that other offer is a startup, and we’re public” for the sole reason of telling you your request is invalid. Therefore, do not ever share offer letters. If they ask for one, tell them, “I’m sorry, but I can’t. If they found out, they could call me unprofessional. To be on the safe side, here’s what I feel comfortable sharing…”
Where to go from here
Heuristics can help your negotiation game immediately. In the mid-longer term, getting more interviews is the best way to get more offers. You can hone your interview skills, and maximize the number of horses in your race. ApplyPass is a human-monitored AI that gets you interviews. All you have to do is fill out one form, and we do the rest. You have nothing to lose with our 1-week free trial. Best case, you save 4-8 hours a week (and get 1-2 interviews a week). Worst case, you get at least 1 free interview.
I’ve been thinking about negotiation a lot lately, so if you want to talk more about the subject, to email me at kevin[@]applypass.com -> just remove those brackets 🙂
