Congratulations! You've passed through dozens of grueling interviews, countless hours spent doing live-coding, take-home assignments, and preparing for system design questions. Finally, it was all worth it. You're getting an offer. Time to negotiate!
Or, if you are me, time to not negotiate. Like most people, I personally dislike negotiating offers, and I tend not to negotiate offers at all. This is not a great strategy to maximize one's compensation, so you should probably negotiate (and learn how to do it!), but I wanted to lay down the reasoning behind my decision and the consequences of my refusal (for the most part) to negotiate offers.
Negotiations are expected in most hiring processes, with 70% of managers expecting candidates to negotiate an offer. That expectation that candidates will negotiate leads to an initial offer that is below what the company can pay for the role, to leave some room for negotiations. Yet, more than half the candidates don't negotiate for higher pay. And, unsurprisingly, underrepresented groups tend to negotiate less, if at all, and are sometimes penalized for negotiating.
All of the above lead to pay gaps between groups based on gender, ethnicity, age, etc ... which ultimately hurts the diversity of a company. Starting with a 10% lower salary means that an employee who didn't negotiate will need almost 3 years (with an average 3% yearly salary increase) to match the salary of a candidate who did negotiate that extra 10%. A lower starting salary also negatively compounds throughout their career, setting them back compared to their peers. Furthermore, 58% of employees wouldn’t apply to a company where there’s a pay gap.
Negotiation skills are not core to most roles in tech, so putting a premium on that skill doesn't guarantee higher impact (i.e. the employees that negotiated higher salaries are not necessarily the most competent). There is even some disparity in access to negotiation training, with 52% believing that men are given better training and tools than women to negotiate successfully. As most candidates only negotiate pay, on average, once or twice every 3 years, honing your negotiation skills is yet another reason why you should be continually interviewing.
Looking at the data presented so far, the practice of negotiating offers seems overall fairly harmful to society.
I now want to add some personal thoughts to the broader discussion of salary negotiation. I have successfully negotiated offers up to 10-20%, yet I've never accepted a negotiated offer. That has led to me probably being underpaid in most of my jobs, as clearly indicated by the fact that my salary rose 12% at a company over a one-year period, and 21% at another company over a 2-year period, largely outpacing the average yearly salary increase.
I personally dislike negotiating offers, because it potentially starts off a relationship in an adversarial fashion. On one side, I'm having to fight for what I think I'm worth, and on the other, I feel like my counterpart is trying to lower my worth as much as possible. For example, in offer calls, I've heard quite a few times that I was "not senior yet" (this isn't an article on why titles matter, especially for underrepresented groups in tech, but they do!).
I strongly value trust and transparency (they are core personal values), so I'm always very open in salary discussions. The best advice is to always ask for higher than what you want, but I don't like playing games and I am very upfront about what I would expect as an offer. I also readily share my current salary and my assumptions and thought-process for the salary I am expecting to receive. Yet, I have received offers below my previous salary, which means that either the company I'm interacting me doesn't believe me (in which case, why even bother joining that company?) or the company doesn't value me or doesn't think that I will bring at least the same value to their company than at my previous company (in which case, why hire me?).
I don't (like to) negotiate offers, because I trust that the company will always give me the best offer they can, and if not, why even start a relationship where the company is trying to deceive me?
So, where do we go from here?
Hopefully, this article has shed some light on the harms of expecting candidates to negotiate their offers. It, hopefully, also provided some insights into how I personally view that expectation to negotiate.
Now, my personal view is that the solution is actually something I've already hinted in this article: transparent salaries. This is not an article about the benefits of transparent salaries, and transparency in general, but I believe that having transparent salaries helps resolve most of the underlying issues that expecting candidate to negotiate their offers creates.
Ultimately, if salaries in your company are fair, why not share them transparently? Even more so knowing that 68% of Millennials and Gen Z share their salaries with co-workers (me included!). By having a culture of transparent salaries (or salary ranges), you can not only control the narrative, but also build trust and ensure that you are not perpetuating practices that negatively affect a significant section of the population.
From this point onward, transparent salaries is a sine qua none condition for me to join a company.