Demystifying Salary Information

Arun Jacob points us to an article in the NYTimes about online tools that can help in salary negotiations. The article concentrates on two websites — Salary.com and Payscale.com — that use different approaches to provide information on standard compensation packages for particular positions and roles. The theory is that, armed with information that was once available only to corporate HR departments, you could have an easier time negotiating your pay using a fact-based rather than a feelings-based approach.

Comments

my two cents

[User 956]

you could have an easier time negotiating your pay using a fact-based rather than a feelings-based approach.

Tip #1: get salary info from friends with similar experience in a similar job before the interview Tip #2: whoever mentions a number first, loses.

Re:my two cents

[forkazoo]

Mentioning a number doesn't have to be to your disadvantage. I usually shy away from it, but in this current position I named a number -- about 5% more than what I actually wanted -- as the bottom of my range, and that's what I ended up getting offered (plus a 10% annual bonus). You just have to be liberal.

(And this is for work for a major staffing company).

Ummm... I'm not sure why you suggest that this worked to your advantage. You named a number which was obviously well within their comfort zone or they would have had to decline it or negotiate it. If they had named the first number, it might have been higher since you don't know the full range of their comfort zone. It's also possible that their initial offer would have been lower, but you could still negotiate past your goal. Once you have named a number, then they know that they won't need to offer anything higher. You will never be able to negotiate higher than your first offer. Likewise, if you are offering a job, when you go first, you can never negotiate lower than your initial offer because the candidate knows you can do better.

Re:my two cents

[SocialWorm]

Tip #2: whoever mentions a number first, loses

I've heard this a lot, and I'm genuinely curious: has anyone ever actually done a study to figure out how going first affects negotiations and haggling? It shouldn't be too hard, at a minimum, to set up a small experiment in which person A has something that's worth about $5, person B actually has $5, tell them to trade, and then observe how going first or second affects the average result.

You can't always trust folk wisdom, and such an experiment, or carefully conducting a survey, seems so straightforward that I find it hard to believe no one's done it before.

Re:my two cents

[mgblst]

Remindes me:

A guys walks up to a pretty girl at a bar.

"Would you sleep with me for a million dollars?"

She looks him up and down, "Well, OK"

"Well, then, would you sleep with me for a dollar?"

"Hell no, what sort of girl do you think I am" she replies.

"I think we have already established that, now we are just working out price!"

Re:my two cents

[ContractualObligatio]

Your Tip #2 is flat out wrong. There's a known effect (supported by research) called anchoring, whereby whoever goes first sets the expectations of where the conversation is going to go. If you want the highest salary you can get, you need to be know what is possible (as per Tip #1, for instance) and then ask for it, or highball to a reasonable extent to allow for negotiation. What is reasonable is dependent on any number of factors - whether there's a conversation on benefits to be had, how aggressive the expected role allows you to be, the culture of the firm you're applying for, whether you have the right personality to ask for a high number without sounding like an asshole, etc.

Knowing what you can get can be difficult, but it pays off and for many roles and companies you can be sure there is some kind of market rate to guide your thinking.

If you let them go first, you're giving open invitation for them to set a lower salary than you would like, and then having to fight to get back up to what you wanted. And it is likely (remember the research!) that you will feel uncomfortable being too pushy despite only trying to get a fair price. The employer might start to see you as an asshole for being pushy, when if you had simply started high yourself the perception can in fact be one of confidence.

Never go first only really applies when you don't know enough about the situation to have a reasonable expectation of the outcome. You therefore run the risk of shooting yourself in the foot by asking for a lower salary than they were willing to offer. If you don't know what the options are, keep quiet and remember not to let a low opening offer anchor your own expectations too low.

For a great book on the subject of negotiation, try "Bargaining for Advantage" by G. Richard Shell. He gives an example of one of his better students (a successful entrepreneur) who always made the first offer as a way to fix the negotiation range low. So be wary of falling into the same trap by letting your prospective employer name the price if there's something you're aiming for.

Incidentally my handle is chosen to explicitly acknowledge that even in the tech game, contracts and all the bullshit that goes with them have far too much affect on our lives, but it's worth the time learning how they are negotiated and worked. A windfall courtesy of having a great offer handed to you on a plate is wonderful, yes, but it's even better if you know enough about the situation to have control, and to put yourself in the best possible position. I can remember being paid way less than what I was worth (oh, the arrogance!) and it was the most demoralising thing at work. After receiving a job offer where I confidently named a price, I re-negotiated my pay up ~38% and suddenly work was more enjoyable. Note I didn't get my asking price. So I'm fairly sure I got as much as possible, that I didn't have to be a hard ass to get it, and that I sure wouldn't have got 38% if I'd started with, "I believe I'm due a raise, what would you think is good?"

If it's not too late already...

[StikyPad]

On the other hand, if you're a well-paid administrator, you may want to add the following line to your HOSTS file:

127.0.0.1 www.salary.com
127.0.0.1 www.payscale.com

Re:If it's not too late already...

[Joebert]

if you're a well-paid administrator

Or you work at Best Buy.

Inflated Numbers

[TheFlyingGoat]

I've never found the IT salaries to be that accurate for my region. A few companies pay the amounts listed, but most of them are around $10k less than all of the salary sites. I don't think that the IT personnel are underpaid either... I think the sites are just inaccurate. It's kind of like those places that claim they can train you for an "exciting career in computers in just 6 months". Most of their ads claim that IT people with 2-3 years of experience are making $70k/year.

While it's important to have some facts when negotiating your salary, it's far more useful to bring in a list of all of the major projects you've worked on as well as some positive review/feedback letters from coworkers (not just IT staff... talk to some other staff that like you). Bringing in a printout from a website isn't going to mean beans to a manager... it's what you actually do for their company/department that matters.

I care a lot

[heyyou_overhere]

What the hell is with these retarded slashdot articles- first a lot of articles that have been duped and now this. This is just blatant advertising- the first link requires you to pay and the second requires for you to pay or get a watered down report.

You can't demystify the wife.

[twitter]

Salary.com measures the salary of a stay-at-home mom. (The statisticians calculated that doing the housekeeping, cooking, babysitting, chauffeuring, administration and other jobs involved in staying at home with a preschooler in Chicago would probably take around 91 hours a week and be worth about $146,000.)

Don't tell your wife, she'll quit her job!

HA! Nice try !

[tempestdata]

You're just an HR manager trying to do damage control.

You aint foolin nobody mister!

They'll just fire you

[hyrdra]

I don't know about you, but many corporate companies don't like people like that...people that research what they should but paid. Many HR managers think that the job market in IT (and many other fields) is so good they would rather replace you and hire someone in that will feel like they are lucky to do the job at or under your current rate. It's largely because the attitude in many companies these days is a sense of "you should be lucky you're here" or "you should be lucky we only make you work 40 hours a week". At my job, I was told when they changed our benefits structure that "you should feel lucky the company deems you important enough to give ANY benefits at all".

I have found companies would rather hire someone who is utterly incompetent but willing to do the job for pennies and doesn't complain when they get bait switched to shitty health insurance. The types of people who have these lay down and take it attitudes are naturally people who are just morons and really don't know what they are doing. My theory is they are quiet and don't stir the pot too often because they are in constant fear of getting found out. The company doesn't care that half the work is getting done because that is harder for HR to measure than a raw starting price and capability is highly subjective. If I complain about a recent HR drone hire, the finger will often get pointed at me, with such remarks as "Don't be so hard on him..." "Have you ever considered it might be you or your department??" "What are you doing to correct the situation?". I'm sorry, I am not here to teach someone 4 years of CS that they should already know. To make it worse, the HR people saying this have no idea about anything technical, they don't understand anything that we do so going to them with a valid logical argument of why the guy they just hired is a dumbass falls on deaf ears. Try to bring any of this up to higher level management and all they can see are the good numbers from HR and how much money they are saving. Meanwhile, my shit is suffering, more work is put on me, and no one understands or let alone cares.

If you think many companies are not run this way, think again. You can usually tell a company like this from job postings. Our HR department shops for people like you would shop for a vacuum cleaner at Walmart -- they try to get the most for less. They look for whizbang things on resumes for stuff we would never need experience in or stuff that isn't relevant to what we are doing. I don't really care if someone has a masters if all they have been doing with it is designing VB forms. I really don't understand who came up with the concept for an HR department anyway, because it sucks. I would rather all hiring decisions go through the person that actually manages a team and produces a product, not some "HR Technical Specialist", which is really some moron with an HR degree who has worked for a tech company before.

So before you go up to your boss with salary figures in hand you should understand that a lot of times we don't have the capability to change anything. In the large corporations I've worked for, the manager never controls the salary and HR would always rather you quit or be miserable than risk having everyone pull those same figures and come to them, taking their precious monthly how-much-can-you-save bonus away. Many HR departments are running on the principal of separation of markets, where you don't know how much the market pays. If I was an HR manager I'd be scared shirtless of someone who quotes salary figures and can suddenly make my only bargaining point go away, I'd rather hire the no nothing guy that passes all the rudimentary hoops that will sit down and shut up and make me look good.

Easy formula

[michaelmalak]

if ( out_of_work )
salary_request = previous_salary
else
salary_request = current_salary * 1.3

"Web Developer"

[nick_davison]

Ten steps to misery, bitterness and potential unemployment... or how to gain empathy for your manager.

1. Go to salary.com
2. Search for a really common job. Let's use, "Web Developer"
3. Fail to find that job. Instead get offered variants of "Web Software Developer" that appears to describe a web application engineer rather than a general web developer.
4. Look at the salary range for a job that's markedly different to what you do.
5. Take offense at how unfairly you now feel you're paid.
6. Go to manager and demand a raise that you think is only fair.
7. Feel horribly taken advantage of when the manager, fairly legitimately, claims you're already pretty well compensated for the job you actually do vs. the significantly different job you found on the web.
8. Fester about the injustice.
9. Bitch about how the company you used to love is now terrible and evil.
10. Wonder why your manager who used to love you now sees you as a morale leech and someone they need to deal with.

Now see if you can guess the real reason a lot of managers get irritated by sites like this. Hint: It's nothing about being forced to pay what's fair.

Most sensible managers will want to pay a fair salary for the job they're having done simply because it attracts good applicants and a basis of fairness improves morale and hence productivity. Granted, not all managers are good or sensible but, honestly, most do try to be. Unfortunately, sites like salary.com, through their inherrent generalizations, often give thoroughly skewed impressions of what's fair and can cause all kinds of problems once someone that is fairly treated gets the impression they're being taken advantage of.

The flip side works against employees too... The last thing an employee wants is an ignorant manager finding a far less skilled job that kind of sounds similar and deciding 20% pay cuts or terminations and new hires are merrited.

Sure, they're a useful tool - but be seriously careful about building assumptions off over generalized data.

Ways to avoid having to mention a number, politely

[patio11]

* You're in a much better position to evaluate my worth to the company than I am. (I *love* this one.)
* I am sure we can come to something mutually satisfactory. What would you suggest?
* I will entertain any offer commesurate with my skills and experience. (I don't like this one -- concentrate on them, not you.)

Ways to counteroffer:

* That figure could be workable with a few minor modifications to the contract. Lets table it for a moment and discuss...
* I have a comparable offer in hand from another firm but would much rather work for $YOU. Does $YOU have any money in the budget to increase that offer so we can make this happen? (Note the phrasing: HR Man has an ego just like you do, and doesn't want to say "Oh no, we're poor" to justify paying you less. He works for a big, strong company for which an extra $X,000 is a drop in the bucket! Hah, take that, applicant who doubted our financial health!)
* I could quite possibly be pleased with that number, depending on the other specifics of the offer. Where does this fit into the big picture?
* I notice you have offered me a $PERK. That is not that important to me. Could we perhaps eliminate $PERK in favor of increasing my base compensation?
* I notice that you have not offered me $PERK. I am rather more interested in it than I am in my base compensation number. What level of $PERK do you think would be appropriate? (listen) That is almost what I had in mind, but keeping in mind that I am accepting a lower base compensation in return for $PERK, perhaps we could do a little better. I know $PERK is cheaper for you than increasing my base compensation because $PERK doesn't cause my total cost of employment, for example taxes, future raises, and overhead, to increase linearly like base compensation does (listen). Sounds great.

These assume that the initial offer was roughly in line with your expectations. I once got offered $30,000 and poor benefits when I was expecting a package in the neighborhood of $55,000. That calls for a firm handshake and a "Thank you for your time, we'll be in touch."

Re:Ways to avoid having to mention a number, polit

[cerberusss]

You: "I notice that you have not offered me $PERK, where $PERK is an unsigned integer variable, 4 bytes long, automatically allocated on the stack.
HR: "?? WTF ??"