from Guide to the Job Hunt on Aug 20, 2023
How to discuss a job offer
What does it mean to "practice" for negotiations? What exactly is there to practice for, in a negotiation, anyways? In this post, we'll give specific guidance, for precisely negotiation practice.
We previously motivated the need for negotiation preparation. In this post, we'll discuss specific points to prepare for, along with a set of guidelines and real-world dialogue to get yourself in the right mindset.
Before we start, here are a few reminders:
- The primary audience is your hiring manager. As we discussed before, they have the ability to make significant changes to your offer. The recruiter's goal is to get you to accept the offer. With that said, the hiring manager and your recruiter are a team; to avoid saying "hiring manager and recruiter" every time, I'll just say "recruiter" to mean the both of them.
- The recruiter isn't your adversary. From the company's perspective, the recruiter is the one person that understands your preferences, mindset, and competing offers the best. Until you're hired, the recruiter's impression of you is the company's. As a result, don't villify your recruiter. Be aware that many tactics are designed to take advantage of you, but all this means is you have a finicky dance partner.
To make these posts as useful as possible, we break down tips into several general "rules". For each of these rules, I'll present common recruiter tactics and ways to counter them.
We mentioned the need to protect your information, early on. To be specific, the information you provide serves one main purpose: Let your hiring manager know how relevant your other offers are — if they're comparable and how competitive they are.
Is the offer comparable? Does the offer have a similar level of liquidity? For more information on liquidity, see Is my offer good? At a high level, the reasoning for each company is the following:
- Large, public companies won't consider startup equity. Their perspective is that equity from a startup is effectively worthless; when placed side by side, the public company's offer is effectively all cash. On the other hand, they are concerned about similarly-sized, fast-growing companies. For example, FAANG (or MANGA) is worried about one another.
Startups won't consider salaries from large companies. Their perspective is that the potential upside for startup equity is vastly higher — and that risk outweighs short-term salaries. To them, it's completely unfair to ask the same of a cash-laden behemoth company and a startup with meager resources. There are exceptions here of course; one of my startup offers had a 25% higher salary than any other public company's.
Topic relevance is (somewhat) important. For example, Tesla autopilot would be most worried about other self-driving groups, not car companies broadly. However, this is generally less true of large companies. Just by being large, any FAANG company is relevant enough for any other FAANG company.
Is the offer competitive? This is where numbers come in. Or, if there are no numbers, this is where the recruiter's extensive market data comes into play, to estimate your playing field.
- If you provide company names, does this company generally provide offers at or above market? Generally speaking, that means Meta, Google, etc. Or is the company known to systematically offer less? This is Amazon, Apple, etc. Even public information on websites such as levels.fyi can be enough to understand how much your offer is.
- Recruiters have more information than you do about leveling and compensation bands at different companies. In this case, giving a company or group name may give up how much your other offers are.
- If you provide numbers, this is now a walk in the park. With your numbers, the hiring manager can simply look at your offer and improve it by a small delta, provided it falls within their existing compensation band. At this point, there's no need for the hiring manager to move the needle significantly.
Along these lines, provide just enough information to assure them of the above criteria: that the other offers are comparable and competitive.
To be clear, there's no need to share names or offer details specifically; share just the above. For example, you may share that you're talking to other FAANG companies working on LLMs or that you've received offers from other startups working on robotics.
It may not seem as obvious here, but during the call, it's all too easy to say "yes". There are only two opportunities to say "yes" above, but this piles up over time. The real kicker is what comes next.
Recruiters will often use social cues to ask you for information. In short, sound nice and chummy, and force you into a situation where you'll have to be stern. The following is one of the more subtle cases:
That's certainly experience shining through, on the recruiter's side
- If I wasn't speaking with Facebook, it'd be a social gaffe — possibly even borderline dishonesty — to not correct the recruiter. I'd have to say "It's not Facebook", which now narrows down the list of FAANG companies to just 4 possibilities.
- If I was speaking with Facebook, it'd be all to easy to nod along and let slip an "uh huh" or "yep". In any case, the recruiter has already made giving up information as easy as possible, with just a yes or no. No need to provide any names.
I just simply said I wasn't sharing names at the moment, leaving the social cue unaddressed.
In short, remember that if you call recruiters over the phone, there are plenty of social cues like this one that can catch you off guard.
At a high level, the recruiter asks you for information — the more they know about your other offers, the better they can accommodate you. Here's what that sounds like.
Ironically, the recruiter is admitting they have a compensation band without disclosing it. The most direct response is to ask for that.
At a high level, your response is to emphasize that the reverse is technically true too: The more you know about the company's pre-determine offer range, the better you can assess their offer. Note that salary range must be disclosed according to California's new salary transparency law, both for new job postings and for currently-held jobs.
Another variant of this question is to ask for your dream offer.
This one is tempting, and actually, it's the most forthright about the recruiter's role. In short, the recruiter here is now going to make a case for you, when discussing with the hiring committee — how much you love the company, how great all the interview feedback was, how excited the hiring manager is etc. Before doing all that, the recruiter in theory should know the offer they're advocating for.
With all that said, the recruiter hasn't really pressured you into a number. They're looking for aspirations. At this point, you can simply decline to provide a number. Don't provide a pie-in-the-sky number; it may seem high but in actuality be low, a completely mis-calibrated goal that's below market for you. You can simply decline to provide information.
The above is generally an acceptable response for any of these tactics, if you're ever at a loss for a response.
The basic premise of the argument is that you must provide one number to accept, because the recruiter can only get one number approved. Whereas it's generally true that leadership needs to approve your offer anyways, there are several idiosyncrasies in this argument that you can point out. Here's what a conversation would sound like.
The most direct response is to call out the lack of information. Just as they need information to seek approval, you need information to make a decision. The above is a non-answer, and how the company's internal offer process works is irrelevant; if you don't have numbers, you can't consider this company.
The recruiter could continue to deflect and insist on you providing the initial number.
At this point, you have a universally-applicable tool, which is to use the recruiter's tactics against them. All recruiters are engaging in these tactics, as they themselves know, which means you're now just a person in the middle, without information yourself.
The above is also a fairly general tactic you can use, and it's one of the strongest cases for not being able to provide information.
Maximizing information available to you is very important. Sounds obvious here on paper, but there are two gotchas that make this less easy to put into practice:
- Offers will rarely be that straightforwardly provided. The sample conversations above give you a rough sense of this. Recruiters try to gather as much information as possible before making an offer. You, on the other hand, need as much information about the offer and how high it can go. As a result of this dance, you will usually not get clarity unless you push for it. There are exceptions to this — Meta and Tesla in my experience were very forthright. See Is my offer good? for what information to ask for, surrounding your offer.
- Offers will stream in asynchronously. You likely won't have a clear idea of all your offers at any single point in time — due to staggered timelines, withheld information, and varying processing speeds for each company's hiring committee. This means you may not know which companies are even making offers. This makes the previous bullet point all the more important — for the offers you do know you've landed, get as much clarity as you can.
Note that information isn't just your offer numbers. It's also all the information about the company that you'll need to make a decision.
- Call your hiring manager. Just as the recruiter tries to gauge your excitement, you should try to gauge your hiring manager's excitement. Understand their enthusiasm for your candidacy by checking how much they've thought about your future in the company. What kind of role will you play in the team? What does success in your first few months look like? What are options for career growth at the company?
- Speak with leadership. Chats with leadership are sales pitches, so if a higher up is willing to meet, this is generally a good sign — you're a candidate they're trying to convince. Use this opportunity to understand the role your team plays in the organization or company as whole, as well as the future of that organization. Look for signs that leadership has thought thoroughly about the future and promise of your team. You're looking for teams that leadership favors.
- Speak with colleagues. This includes coworkers both in and outside of your team. You're more likely to get an honest perspective from peers than from management. Simply put, there's nothing in it for them whether or not you accept the offer. Get the inside scoop on facets of the job you care about — maybe work-life balance, team productivity levels, types of projects, or product impact.
In short, talk to your recruiter or hiring manager for offer details and to everyone else for concerns beyond the offer. Your recruiter can also help you setup these chats.
One common tactic — not too unlike any other social situation — is to simply say "next time".
There isn't much to say here, except "sounds good". However, each phone call usually opens with the following.
As we said before, these are perfectly reasonable questions to ask; they need to know if they should accelerate their internal processes. However, this also means the conversation shifts immediately to a mode where you're sharing information instead of the other way around.
Just keep in mind you're looking for information as well, and stay focused on the information you need to make a decision. Don't get sidetracked into offering more information than you need to.
In short, show enthusiasm for this offer and company. There's no need to withhold excitement, but there are several nuances to be aware of.
- There are two sides to this: The hiring manager and recruiter need to believe that they have a fighting chance — this is substantiated by your verbal enthusiasm. However, they also need to see a reason to fight for you — in that your other offers are tempting alternatives. This second part is substantiated by limited information you share and has less to do with your excitement.
- Be liberal with your excitement, but refrain from comparing companies aloud. Complaining or even praising a different company gives away too much information about your internal preferences. Part of "they need to fight for you" means not divulging which company is top-ranked. As far as they know, your top three are on an even playing field and you're looking for a financial reason to put one on top.
- With that said, feel free to share what you're looking for in a dream job. Drawing on pain points from past employers is okay in moderation. For example, I freely shared that I was interested in more product-focused research; I'd joined pure research groups in the past and was looking for a new facet of industry. Savvy hiring committees will pass this on to leadership during their sales calls with you. This biases those conversations of course, but seen another way, it focuses those conversations on your concerns. For me, for example, I was concerned about Nuro's path to a product.
One common question is: How excited should I sound when the recruiter gives me an offer? Here's an example initial call.
There's no need to break down crying here, but some "yay!" would be nice. No particular need to prepare a statement either. Something to the tune of the following works.
Next up is usually standard benefits information and logistics around how equity works at that company. Prepare a pen and paper, and write it all down.
Recruiters know better than to ask how excited you are for their company's offer. To get a more concrete estimate of your excitement, they'll directly ask how their offer stacks up against your other options.
To give hope without certainty, I would usually respond with something along the lines of the following.
If the above wasn't true, I would narrow the pool of companies until it was, such as "Company X is definitely one of the top three self-driving groups I'm talking to". This was trivially true because I was only talking to three self-driving groups. Heh.
In short, negotiation involves giving yourself ample information, so that you can offer information and make a decision judiciously.
In many of my posts, I recommend practicing — coding while talking, as in How to succeed at coding interviews. to whiteboarding while thinking, as in How to succeed at AI design interviews. This post is no different. To drive home the above guidelines and tactic responses, do the following.
- Decide now if you'll accept calls from recruiters. If not, communicate with recruiters exclusively over email. Then, you can refer to resources such as these to make decisions and share information selectively, without social and time pressure in live phone conversations. Even if you do decide this, you'll no doubt have a few, unavoidable calls. See the next todo, regardless of your choice.
- Schedule practice with a friend. You don't need a master negotiator or experienced recruiter on the line. Open up this blog post, and simply have your friend read a random prompt. Then, try to come up with an answer on the spot, in a way that follows the above guidelines. Don't memorize answers; memorize tactics you can use to respond, so you can choose tactics live.
The above tactics and guidelines may seem overwhelming. Don't try to memorize it all, and instead, practice according to the todo list above. Saying these responses aloud a few times can help you feel more comfortable.
To move from conversations to negotiations, see a step-by-step guide to negotiations themselves in How I negotiated job offers.
Want more tips? Drop your email, and I'll keep you in the loop.