You have my permission to negotiate
Being freshly off the job market, the question of whether/how to negotiate has been on my mind a lot. When it comes to the how, I don’t have a lot to add. The resources I found most helpful are:
Deepak Malhotra video (with an accompanying article)
Document by Claudia Goldin and Larry Katz that’s a bit more Econ-specific.
When it comes to the whether, I find myself ruing the lost opportunity when a friend tells me they didn’t negotiate for a better salary (or overall compensation package). Maybe they were just tired after a long job search and wanted to wrap things up, or they were just grateful to have gotten something (especially if it was one of those increasingly rare tenure-track jobs). Regardless, I think it’s sometimes too easy to talk ourselves out of asking for more because it feels uncomfortable, and that’s usually a mistake. This is an attempt to help you (and at some point in the future, me) avoid that mistake.
My “qualifications”
Let it be known that I’m not the “negotiating type”, whatever that means. I don’t like asking for stuff. I’m not a smooth operator nor a hard-nosed haggler. This doesn’t come naturally to me either, so if this stuff makes you uncomfortable, I’d like to think that I have at least some understanding of how you feel.
Why you should negotiate
I’ll just quote directly from Patrick’s post:
Imagine something a wee bit outside your comfort zone. Nothing scandalous: just something you don’t do often, don’t particularly enjoy, and slightly more challenging than “totally trivial.” Maybe reciting poetry while simultaneously standing on one foot.
If I told you I would pay you a hundred thousand dollars if you did five minutes of poetry recital while standing on one foot, would you do it? It’s an absurd image, but play it straight. There is no hidden gotcha here. You won’t be videotaped. Your friends will never see you make a fool of yourself. The revolution will not be YouTubed. The offer is exactly as simple as you think it is: poetry, foot, $100,000.
Would you read poetry for me?
Of course you would.
In short, for low effort and slight discomfort, you can make your life a lot better! As Patrick points out later, this is one of the highest return activities you can engage in:
You generally can’t do a totally bang up job on any five minutes of work this year and have your boss give you an extra $5,000. You can trivially pick up $5,000 in salary negotiations just by sucking less.
Don’t care about salary? Ask for more time off! Research funds! Whatever makes your life better!
Made up reasons for not negotiating
These are some common stories that I’ve heard from others (and myself) for why they didn’t want to negotiate. I call them “made up” because I think they’re essentially based on distorted views of the world, ones that we might not even believe in in other circumstances.
“I don’t want to seem ungrateful”
This one has a few things bundled up in it, so let’s take them one at a time. First things first, no one is going to pull an offer because you tried to get a higher salary.
Second, a salary is not an act of charity. It’s a payment for a valuable service that you’re providing. You’re engaging in a transaction and you’re allowed to have a say in the market-clearing price.
Finally, we should be grateful for what we have. But when has that meant we’re not allowed to have desires and aspirations? Imagine being served a fruit cup when you asked for a T-bone steak. Sure, you can be grateful for being rich enough to afford going to a steakhouse, but (I hope) that’s not going to stop you from asking for your steak.
“I’m not good at it”, “It’s uncomfortable”, or “I don’t have any bargaining power”
I think this sentiment often comes about from a distorted view of what negotiation actually is. This image of negotiation is that each party is trying to get as much out of the other as they can, employing tactics like angrily threatening to walk away.
I find it helpful to reframe negotiating as asking. You are allowed to ask for more and your potential employer is allowed to say no. No one is harmed by this exchange.
Are you more likely to get what you ask for if you have, say, another job offer? Yes, of course. But there’s no harm in asking! Very often, the people you’re interacting with are even on your side – they want to help you get a better deal. At the very least, they’re not against you. I’ll quote Patrick again:
It is Bob’s job to get you signed with the company as cheaply as possible, but Bob is not super motivated to do so, because Bob is not spending Bob’s money to hire you. Bob is spending Bob’s budget.
In fact, until recently, in any negotiations I’d ever entered, I’d done so without an outside offer. I’m not a master strategist or a smooth talker. In most of these cases, it took between five to ten “ums” and “ahs” before I could verbalize my request. And yet, in every case, I ended up with substantially more than what I’d been initially offered. Luck, goodwill, and asymmetric incentives (this matters a lot less to them than to you) can go a long way.
“I have enough” or “I didn’t get into this line of work for the money”
I think people can sometimes have this feeling that it’s gauche to want more money and/or to express that desire. On top of that, there can be a feeling that the extra money you get isn’t going to catapult you into Scrooge McDuck levels of wealth, so why bother?
This feeling can be amplified in certain kinds of professions like academia, where people made a quite explicit choice to earn less money in order to get more freedom and contribute to “the search for truth” or whatever.
I think the main answer to this just really goes back to the earlier point that the rewards are huge relative to the cost. It’s about as close to leaving free money on the table as you can get. Even if you don’t spend all of the “extra” money, surely it would be nice to have a bigger cushion to fall back on?
And if the money really doesn’t matter, you can ask for things you do care about (vacation, travel funds, …).
“I don’t deserve more”
I wouldn’t go so far as to say that salary offers are just numbers plucked out of thin air, but there almost certainly must be a certain amount of arbitrariness to it. There’s no reason to think that HR departments have a special spreadsheet that spits out the Marginal Product of Labor for each new employee. Therefore, there’s no reason why the first salary they offered you is the “right” one. Anyway, all of that is to say that within a reasonable (but probably still pretty wide) interval of the real numbers, no one knows what the magic number is and it’s your prerogative to get as close to the upper bound of that interval as possible.
Getting over the “ick”
Asking for stuff is uncomfortable. Being turned down is uncomfortable. But ultimately, these are minor discomforts compared to the benefits of negotiating. As is often the case in other aspects of life, the people on the other side just aren’t thinking about it as much as you think they are. This is just normal, workaday stuff for them. Approach it honestly and transparently and you’ll be fine.