I’m rewriting The Business for the next book. This piece is almost 15 years old, much has changed in negotiating an offer letter, and I have more advice on how to analyze those offers. So much advice that I am idea paralyzed™ trying to rewrite this piece.
So, this is just a section of the update to The Business, which I’ll be grafting onto the new version. Given this approach, there’s an entire introduction that I’m assuming you’ve read, but here’s your cheat sheet for now: you’ve just received an offer from my hypothetical company.
And then we have the conversation. It’s either you and I or you and the recruiter. We present the offer’s details and explain each part of your compensation package. When we’re done, there is a short pause because that was a lot of information. You might take a moment, take a day, but you eventually come back and say something like, “I’d like more base salary.”
No problem. Of course, we’re expecting negotiation. Of course. We don’t know which part of the package you’ll want to negotiate, but unless we’ve pre-negotiated the offer as part of the interview process (it happens), we always expect a response. However, your response will always receive a response. We are going to ask some form of “Why do you want a higher base salary?”
“It just feels fair.”
If you’ve been a hiring manager and received this type of justification, I want you first to take a deep breath. It does read… unhelpful, but there is a signal there, and it’s not the word you think. More on this shortly.
Let’s start with one word: fair. What might this mean? Fair could mean “fair compared to other similar companies with similar job levels.”
Right, so you know that the job of Engineer 3 at my Company is the same as a Senior Engineer at Company XYZ. Furthermore, you know the salary ranges for Engineer 3 and Senior Engineer are roughly equivalent. Finally, you have a friend who recently received an offer at Company XYZ for Senior Engineer, and you believe that you and your friend have the same experience.
First, I want to acknowledge that you’ve done this research, and having this data at the ready is a good thing. I want you to do more of this work because that is the entire point of this chapter, but right now, I want to talk about your single data point and how little it tells you in this scenario.
- Are these job levels the same? What does that even mean? Are you saying these two companies value precisely the same skills and experience in the same way? That seems unlikely. But, ok…
- Are you suggesting the salary ranges for these jobs are the same in different companies? There are companies out there who do market research to determine how much companies are paying individuals at different levels, and this is interesting data, but how do these research levels apply to the levels at my company? Also, how much time had passed between when this research was done and manifested in the salary range for this level? High-tech hires aggressively, and salary ranges are often adjusted to make Company A more attractive than Company B. But, ok…
- How big is your friend’s company? Is it big? Is your data point from precisely the same team? No? Is it a different team? Are they beholden to the same salary guidelines and philosophy as your offer? Are you sure? The bigger the company, the more different executives land different compensation philosophies. Some teams are eager to hire and increase offers to make them more attractive. Other teams recognize that varying compensation philosophies are fundamentally unfair and go to extreme lengths to ensure all candidates receive the same offer for the same job for candidates with the same experience. But, ok…
- Is your data point from your friend’s company at a different growth stage? How do you even compare your big company offer, primarily stock, to a big public company offer, which is a knowable blend of base salary, bonus, and publicly traded stock, to a start-up where the stock is a mostly unknown quantity, and they’re trying to conserve cash?
Your single data point tells you the data from one other talented individual and how one other company values their ability. Unless your offer is from the same company for the same role on the same team, deltas just in base salary aren’t anything other than expected. Big deltas. Thousands of dollars deltas. Single data points are not apple-to-apple comparisons.
My point of this breakdown is to give you context. The factors that go into the construction of an offer are many. Some of these are easy to discern, and some are tucked away in the values of biases of a company.
But fair isn’t really what I see in “It just feels fair.” What I read is, “But I want more.” More is good. Who doesn’t want more? I sure do. It’s not your best work, but there is a glimmer of a goal in this awkwardly simple sentence. It would be best if you were striving for more in your new role, but I think your job goals needs more definition, so I’ll tell you mine…
Better, Faster, and More
I want a better job. I want a role providing me with challenges I have not seen before. I want to work with a diverse and talented team that, by just existing, teaches me new ideas and makes me better. I want a better company that has figured itself out and is heading, no, charging towards building the next thing.
I want to move faster in my career. I have been doing the same thing for the last three years, and I feel my career is decelerating because my daily learnings are decreasing over time. I always have the next goal for my career, and I want to have a job accelerating me towards that goal by providing me with new opportunities with new humans on different products. The speed with which I’m heading toward the next goal should be… breathtaking.
I want more. More accountability means more potential for the products I’ll be building. More visibility into how the product is built and how the company is shaped to support building the product. More features that help more humans.
You will note that nothing I listed under my Better, Faster, and More job goals mentions compensation. This is not because compensation isn’t essential; it’s because the things that will matter most in your next job have very little to do with how you are paid. We gravitate towards compensation as the measure for the next gig because it’s so wonderfully measurable and comparable. However, who you work with, how you build, and what you build are aspects of the job you should be assessing.
But how? There are no structured rubrics for evaluating and comparing people, processes, and products. This is why the best word in your response is “feel”. I know your feelings about the compensation, but how do you feel about the humans you will be working with? How do feel about how they work together? How do you feel about what they build and where they are going?
Feelings are observations collected, compiled into opinions, and finally transformed into an emotion. I want you to feel your offer is fair, but I want you to feel this is a fantastic opportunity for you to grow.