Negotiating job offers
by Josh Doody
You’re happily plugging along at your job, making a decent living, and everything seems fine.
Then you get an email or a LinkedIn message with an opportunity that seems too good to be true: A recruiter has a great opportunity and you’re the perfect candidate!
You’re smart, so you know you should always consider the options available to you. You set up a call with the recruiter, learn about the role—it sounds pretty great!—and give the go-ahead to introduce you to the company.
And then things get a little weird. Before the recruiter can introduce you to the company, they need some information: What is your current salary? Actually, they’ll need your salaries for your last few jobs. And what are your salary requirements for this new job?
Huh? Didn’t they reach out to you? And all of a sudden you have to share personal information to keep things going?
You’ve read about how to answer the salary expectations question before, so you know it’s not in your best interest to disclose that salary information. You tell the recruiter you’re not comfortable sharing that information, but you look forward to exploring this awesome new opportunity.
And things get weirder! “I don’t want to waste everyone’s time if your salary requirements don’t align with the position.”
So you ask them what the salary range is for the position, and you’ll let them know if it’s in the ballpark of what would convince you to make the leap. But that won’t work - you have to share your salary requirements to save them time.
“I have several candidates for this position and I need to narrow it down to the 5–8 candidates who are interested in the job as-is, including salary.” Again you say that you’ll let them know if the salary range being offered is in the ballpark. But they dig in: We cannot move forward if you don’t disclose your salary requirements.
What’s going on here? They reached out to you, right? Plus, they get a commission based on the salary you’re paid if you get the job. Don’t they want to make that commission as large as possible? Don’t they know that telling the company your salary requirements could cost you both a lot of money?
I’m a salary negotiation expert. My goal is to maximize my clients’ salaries with simple, proven salary negotiation tactics. The most important tactic is don’t disclose your current salary or your salary expectations before they make you an offer. This one tactic is worth thousands of dollars to the average candidate, and could be worth tens of thousands of dollars or even more for many candidates.
You can read all about this tactic, how to deploy it—even with extremely insistent recruiters and hiring managers—in this article: How to answer the “What’s your current salary?” interview question.
And if I know this, your recruiter definitely knows this since they’re deeper in the process than I am.
So why are they explicitly asking you to do something that could cost you thousands of dollars and will reduce their commission when they place you?
Your recruiter has a secret: They’re actually in the real estate business.
Stay with me!
I’ve bought a house, and lots of my friends have bought and sold houses. Everyone knows that you can handle everything yourself, or you can work with a realtor.
Let’s say you’re selling your house. You don’t know how to sell houses, where to find buyers, how to get the best price.
But realtors do!
Of course, the downside of working with a realtor is you have to pay them a percentage of the sale price—that’s their commission. But that’s ok because they’ll bring in buyers, show the house and, most importantly, work hard to get the highest possible selling price because they want the biggest commission possible.
That’s great for you because you don’t want the hassle of selling the house, and you want to sell it for as much as possible. Yes, you have to pay them a bigger commission if they get a better price, but you pocket more money, so that’s fine.
But that’s actually not how it works. Your realtor doesn’t care about getting the best sale price, even if it increases their commission.
Don’t believe me?
Let’s say you’re selling your house and you hire a realtor. You list your house at $100,000. The realtor’s commission is 3%, so they’ll probably get at least $3,000 when your house sells. That’s their baseline.
A potential buyer comes along and offers the asking price: $100,000. If your realtor closes the deal, they get $3,000 right now. But! They now know that you may have under-priced your house because someone just came along and offered asking price. Chances are that you and your realtor can hold out for that perfect buyer, and possibly get a better selling price.
If they can get a better price for your house—say, it sells for $110,000—then you get another $9,700 and they also get another $300 for their commission! That $300 will add up as they sell more and more houses. Win-win!
But wait a minute. They’re not thinking, “Can we get more money by getting a better sale price?” They’re thinking, “How much more work and time will I have to invest in this deal to earn that extra $300 in commission?”
This house isn’t the only one they’re trying to sell, right? They’ve got 10 houses in their pipeline right now. Each one could bring a $3,000 commission or more if they get a better selling price. But each one takes time—time to find buyers, time to show, time to advertise.
And time is money.
They already did all the basic leg work for listing house—these are essentially their fixed costs to sell the house. Their commission will probably be about $3,000 if they just sell the house without any further work. But if they work really hard and stay really patient waiting for a super-motivated buyer, they could push that commission to $3,300.
How long will that take? How many more showings will they need to host? How much advertising will they need to do? It’s hard to know, but if any of those investments are non-trivial, their return will be very low on them since they’ll only get $300 if they find that perfect buyer at $110,000.
It’s much better for your realtor if you just sell to the first bidder at the asking price. Then they can just collect their $3,000 commission and move on to another house.
They’re in a volume game—they want to sell as many houses as quickly as possible and collect those baseline commissions. Holding out for higher selling prices, only puts a few more dollars in their pocket, keeps them from selling other houses, and could cost them a lot of time and money.
Your recruiter is in the real estate business, and you’re the house he’s trying to sell
Are things starting to click yet?
You’ve probably noticed the screenshots I included in this article. Maybe you’re skeptical that I made them up or cherry-picked them.
Those were all from the comments on a single interview I did for Glassdoor.com: 9 Things to Never Say in a Salary Negotiation Glassdoor has since removed all of the comments (that’s why I grabbed screenshots).
Notice a trend? All of that pushback is from recruiters, and it’s very intense.
Maybe that’s just a one-off example, though. Or maybe I cherry-picked or even fabricated those comments to make my point.
Here’s a link to a Hacker News posting that made it to the front page, got lots of upvotes, and got lots of comments.
Notice a trend? It’s either from recruiters directly, or from people whose recruiter has convinced them to share their salary requirements.
Huh. These recruiters must have the same playbook as the recruiters who commented on my Glassdoor interview.
Hopefully I have your attention now. Your recruiter is not your friend. They are not trying to get you the best salary possible. They’re probably not even trying to get you the best opportunity possible.
They’re trying to get that baseline commission on closing a placement. The company has told them, “We would like a software developer with these skills and this much experience.” They know that you have approximately those skills and experience, so you’re probably a good fit. Or you’re close enough that it’s worth throwing your hat in the ring.
But they also want to get this over with as quickly as possible. What if you are the ideal candidate, but you can’t reach an agreement with the company when it comes to salary or other benefits? That’s not a big deal for you because you’re probably only pursuing one or two jobs.
But it could be a huge nuisance for them because they’re working to fill 10–15 positions, and it’s a lot of work to make connections and set up interviews.
That would be bad for them because it means more effort and time trying to find the right candidate.
They’re not trying to find the right buyer for your skillset and experience. They’re not trying to get you the ideal job for your career or maximize your salary. They’re trying to find any buyer for your skillset and experience, as quickly as possible.
It’s in your best interest to pursue lots of jobs, get several offers, negotiate all of them, and choose the absolute best opportunity for you.
It’s in their best interest to close the first deal available, collect the commission, and move on to another candidate as quickly as possible. The more they have to work with you, the less time they have for other candidates, and the fewer placements they’ll close.
It’s a volume game.
Don’t work with recruiters. You probably don’t need them.
It used to be true that recruiters had unique information about local markets, job openings, etc. And they still do, to a certain extent. But much of that unique information is now available online.
Plus your best opportunities will come through your network. Literally every job I’ve ever had came through my personal network.
Don’t have a network? Sure you do! Have you ever had a job before? Then you have a network of previous co-workers. Did you go to college? Then you have a network of classmates in your major.
But let’s say you don’t have those. You just changed careers and you didn’t go to college. Then what?
Go to local meetups. Meet people. Get to know them. Tell them you’re looking for work and ask if they know anyone hiring for your skillset and experience.
Start at Meetup.com. You’d be surprised how many meetups are happening within driving distance. Search for local Facebook groups. Call your local Chamber of Commerce and ask if they know about local groups or social clubs where you can get involved.
What if you have to work with recruiters?
Look out for your own interests. Don’t share your current, previous, or expected salaries. Those are your business. It’s not your problem if they have to invest time to place you.
It’s inconvenient for them to spend a lot of time on dead-ends because they’re playing a volume game. But you’re not playing a volume game—you’ll only interview with a few companies at a time—and it’s no big deal for you to invest a few more hours in an opportunity that doesn’t pan out.
Tell your recruiter you prefer to handle the salary part of the discussion, and that you aren’t comfortable sharing your salary information. If that’s a problem for them, find a different recruiter.
I'm Josh Doody, a professional salary negotiation coach who helps High Earners negotiate their job offers. On average, High Earners improve their first-year compensation by $47,273 with my help.
Apply for a free 15-minute intro call to learn how I can help.