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Company A has a job opening that I have applied for, interviewed for, and received an offer for. Their culture is awesome (very family-oriented) and I already like a lot of the people I have met. Long story short, it knocked everything off my checklist for what I wanted in a place of work. Initially it seemed like a good opportunity until this happened:

Their offer was almost 30% below market for the bottom of the typical salary range

Something else to note is that this low pay is not made up in any way through other benefits such as lots of vacation etc...

This is compared to nearly identical jobs at companies in the same industry within ~15-30 miles (I did my homework). I started the negotiation process by informing them of the current industry standard salary and told them that their offer is well below market value. Instead of making a direct counter-offer, I asked them if they could make a better offer (I had heard that this is a good negotiation tactic for very low offers). Although the company culture seems to be a good improvement, I cannot afford the pay cut (this offer is even lower than my current salary).

Their Response: We are well aware of the standard salary range, however we feel that we are offering reasonable compensation for the job. They also said that several other interviewees had expressed the same concerns about pay, but they are not willing to budge any further.

I had already talked to a few friends who had heard that this place was struggling to hold onto people and that their pay was low, but I did not expect this. They are also a pretty big company, so I am unsure of why they allow policies like this to exist (over 4000 employees in 6 or 7 countries) or if they treat all employees like this. If this is the case, I am unsure why anyone works here.

I cannot accept an offer with this low of a salary, and now I may not accept even even if they increased the offer due to their treatment of the situation. However, I would still consider it if they were willing to significantly improve their offer to something actually competitive.

Is this a common sort of hardball negotiating tactic? What would be a good response as a last ditch effort for them to increase the offer so that I can consider the job?

There seems to be a huge disconnect between their expectations and reality, and if they do not improve the offer I will unfortunately have to move on.

Note: I am currently employed and am not desperate, I just am ready to move on to new opportunities. Also, I have a few other leads but nothing promising yet.

Note: I am still a student. I am actually asking this question for a friend and thought that asking it in first person would be more beneficial for creating good responses and discussion. I am well acquainted with his situation, and thought I would ask on here to see if anyone else had any further thoughts.

  • If they use the word "feel," and expect it to carry weight, then I wouldn't want to work for them. This is a contract negotiation, not an encounter group. Feelings don't pay rent. – Wesley Long Aug 15 '18 at 20:13
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    I'm surprised you are you "unsure why anyone works there" when you yourself say that they knocked everything off your checklist except pay; obviously they're employing people who don't care that much about salary. – Erik Aug 15 '18 at 20:33
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    Below market value? They're paying less than you get right now? Or just less than what you heard the market value is? – Kilisi Aug 15 '18 at 20:38
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    @Kilisi Not only is it less than I am making right now, but it is less than people doing the exact same work at another company would be making. Based on my salary research and some of my friends I have talked to at other companies. – lukebeast887 Aug 16 '18 at 13:50
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    @lukebeast887 it doesn't need to make sense to you - they found 4000 people who think that "awesome culture" is more valuable than 30% more pay. I can't blame them; I'd rather spend the 40 hours of work a week in a great place than earn 30% extra money to try and compensate a miserable week of work over the weekend. – Erik Aug 16 '18 at 15:22
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Is this some sort of hardball negotiating tactic?

Of a sort, yes. They might be friendly people and believe their family atmosphere offsets the salary issues. They may even want people for whom money isn't a driving factor. Nonetheless, it is, basically "This is our offer, take it or leave it", which is hardball.

What would be a good response as a last ditch effort for them to increase the offer so that I can consider the job?

Tell them "Thanks for the time to interview me and for the job offer. The work and your company culture are very attractive. Unfortunately, I cannot (or will not if you prefer) take a salary that low. I wish you Good luck going forward." Then don't look back (unless they make a new offer that meets your needs, but that seems extremely unlikely).

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    I think it would be a mistake to walk away without at least naming a number that would be acceptable to the OP. As it stands, they didn't take the OP's "bait" and volunteer an acceptable number so the onus is on the OP if the place is otherwise attractive. Put differently: if you don't ask, you'll never know. – Eric Aug 17 '18 at 0:51
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    @Eric agreed. Instead of saying will not take a salary that low you should probably insert a lowish but still better than current salary. And phrase it like "I will not consider any offer with a salary less than..." which implies you can still turn down offers that meet it. And it has a nice finality to it, you don't have to actually turn down the offer - you have just stated you won't even consider it. – Stian Yttervik Aug 17 '18 at 6:56
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    @Eric: Thanks for the feedback, and under other circumstances I might agree that making a counter offer with a specific salary would be useful. However, the OP already stated that he told the company that their offered compensation is well below average for the job. Their answer was that they know the average, feel their offer is reasonable, and they are unwilling to increase the offer. I think they have already made clear that they aren't going to consider a change in their proffered pay. – GreenMatt Aug 17 '18 at 13:53
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    @Eric: From the post: Paraphrasing - They know the normal salary range and other candidates have said their salary is too low; Quoting - " ... but they are not willing to budge any further. " That says to me that they are already telling the OP that it would be a waste of time to continue asking for more money. I'm not changing my answer about that; if you think differently, feel free to offer your own answer. – GreenMatt Aug 17 '18 at 17:26
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    @GreenMatt Although it may be a waste of time, it's the only way to know for sure. And sending a short note like the following costs only a few minutes: "Thanks, this seems like your company would be a fantastic place to work. I'd love to join your team, but unfortunately I can't accept less than $XXX for this position. If this is not acceptable to you, then I will unfortunately have to continue my search." – Eric Aug 17 '18 at 17:41
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Their Response: We are well aware of the standard salary range, however we feel that we are offering reasonable compensation for the job. They also said that several other interviewees had expressed the same concerns about pay, but they are not willing to budge any further.

Some companies emphasize higher pay to attract candidates. Others emphasize an awesome company culture.

I had already talked to a few friends who had heard that this place was struggling to hold onto people and that their pay was low, but I did not expect this. They are also a pretty big company, so I am unsure of why they allow policies like this to exist (over 4000 employees in 6 or 7 countries) or if they treat all employees like this. If this is the case, I am unsure why anyone works here.

But 4000 employees do work there. So they must be doing something right.

Is this some sort of hardball negotiating tactic?

Probably not.

You have already heard that "their pay was low". You haven't heard that "they make a low offer but eventually will up their offer to meet some 'standard salary range'".

Most likely, they can find other candidates who would be willing to work there for what you consider an unacceptable salary. Perhaps their awesome culture is appealing to enough people.

What would be a good response as a last ditch effort for them to increase the offer so that I can consider the job?

Your best bet is to ask for a salary that is the least amount you'd be willing to accept to work there. Just be ready to walk away if they still offer less.

Sometimes a company that "knocked everything off my checklist for what I wanted in a place of work" except for the salary just isn't the right place for you.

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    "But 4000 employees do work there. So they must be doing something right." Maybe. Or maybe they're willing to settle for less valuable employees. – Don Branson Aug 15 '18 at 21:06
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    @DonBranson If they make good profit then this isa very arrogant statemen. Their employees may be good enough for their business. You can be as good as you want - best in the country - but that does not mean people are willing to pay. Depends on business needs. – TomTom Aug 15 '18 at 23:02
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    @DonBranson 4000 fresh college grads who spend 3x as much time on Stack Exchange as a seasoned developer, and who will jump into the first job with a good salary they come across, thereby continuing the inefficient work cycle. – Adonalsium Aug 16 '18 at 14:18
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    @Adonalsium As tempting as it is to think things like that, 4000 employees across multiple countries says their business is doing OK as is. – Eric Aug 17 '18 at 0:49
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When I read things like "lowball" and "hardball" and "I said x because I heard that's a better tactic" I hear that you're completely immersed in negotiation techniques and game theory and saying one thing while meaning something slightly different and all of that. What you need to remember is that not everyone else is.

They have a need. They have some money set aside to meet that need. The two don't match. You've told them that and others have told them that too. They aren't changing the money. (Note: they're not pretending they can't change the money but secretly they would if you just said or did the magic thing to unlock it. They aren't changing the money.)

If you ignore the industry standard and market value, could you live happily on their salary? Could it meet your needs in terms of where you live, what you drive, and so on? If so, that's how they hire people: some people are happy with a nice workplace, good working conditions, and enough money to live on, and don't get all "but I could get 30% more elsewhere" about it. You're not that person, so you probably shouldn't continue trying for this job.

  • Good point Kate. It's highly unlikely that they're keeping a secret agenda to be revealed only if you said the right words or tactics. They made an offer they believe is reasonable and may have wiggle room if the situation allows. At this point they made it clear they're not. – Dan Aug 16 '18 at 17:19
  • +1 for challenging the frame of "hardball negotiation". Is it "hardball negotiation" if they don't plan on budging? It doesn't matter. They offer low pay for a given job, if you want that take it; if you don't, don't. I've worked places that pay below average but offer a relaxed, stable work environment. Some of us moved on quickly, some friends are still there riding the pine until retirement. Different strokes. – mxyzplk Aug 17 '18 at 3:31
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This is probably not a hardball negotiating tactic; they probably don't pay employees well and are sticking to it. It's not unheard of for companies to offer lower salaries and stick to them, and it's really consistent with a company that struggles to hold on to people. Some companies that have really good benefits offer the benefits instead of paying competitively as well.

As far as a response if you want to try to work there (although why you'd want to work somewhere that is adamant about paying below market value is beyond me) you could try something like this:

I'm very interested in your company and flattered that you have extended me an offer. However, I find the offer to be well below what similar jobs are offering. If you can offer me a salary of $X then it'd be an easy decision for me to come work for your company.

You can add justification for why the offer should be at least $X (markets, other job offers, your current salary, etc.), but I wouldn't get my hopes up if I were you. Most likely they pay what they pay and look for people who are willing to accept it.

Edit: personally, I try to avoid these companies. In my experience, these companies get a disproportionately high number of less-skilled employees because of the lower pay, as well as a large number of people who don't have much in the way of career goals. The result often turns out that capable people get overworked as a way to fill in the gaps. Companies usually aren't okay with projects falling behind and work being low quality just because they don't offer financial rewards on par with the industry.

  • I would only be interested if they were willing to pay me a good salary. I have informed them of the justifications for pay, but they don't seem willing to budge. I am honestly just disappointed that companies like this even exist, especially when it is obvious why they have issues hiring/holding onto good people. – lukebeast887 Aug 15 '18 at 19:35
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    That's a really strange position. The primary motivation of companies is not to pay at or above market rates (it's mathematically impossible for everyone to do that anyway) for employees. It's to get something built, made, sold, and done. Why shouldn't they exist? – Kate Gregory Aug 16 '18 at 15:47
  • @KateGregory many companies decide to view workforce as a cost to be reduced rather than a resource to build. My answer isn't really taking a position on whether or not a company should do this, just pointing out that the company OP is dealing with likely the former and not likely to decide to pay more. – dbeer Aug 16 '18 at 16:12
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    sorry it wasn't your position I thought was strange, dbeer. It was @lukebeast887 saying "I am disappointed companies like this even exist" - I find that position strange. – Kate Gregory Aug 16 '18 at 16:14
  • @KateGregory I guess it just seems to me that the company is taking advantage of employees by not paying them at the market raate, but I also recognize that the employees are 100% free to leave at any time for a higher paying job elsewhere. Maybe the culture isn't as good of a fit for my friend as he thinks. – lukebeast887 Aug 16 '18 at 17:32
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Honestly I'd say just turn your back and forget about them. It is unlikely to be a negotiating tactic and you are unlikely to get them to increase their offer by the ~50% (100k market, 70k offer. 30k more to get back up to market is ~50% increase) needed to match the market rate but let's pretend for a second you did get them to make a reasonable counter offer I still wouldn't recommend accepting it.

If it was that hard to get an reasonable offer initially how hard do you think it would be to get reasonable raises once you are working there? Not only because they apparently aren't used to paying well but because you'd also be making significantly more than your co-workers. You'd be virtually guaranteed to be slowly or not so slowly falling behind the market rate as you got little to no raises that may not even cover inflation/cost of living increases.

You'd also likely be in a situation similar to when someone gets a counter offer to stay at a job. They'd probably be looking to replace you with someone who is wiling to work for that 70% that they originally offered you at the first chance they got and may be assuming you are looking to jump as soon as you can too.

When their offer is so low-ball and they are apparently well aware of that fact since you aren't the first to bring this up things will not change quickly or likely at all until they are forced to by being unable to actually find anyone to fill their open spots.

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Some of the fortune 500s in the US (exponentially larger than 4k) in the US offer fixed salaries for position tiers. So you'll have something like software developer 1 - 3 and 1 can't break a certain amount regardless of skill or experience.

Thereby, if you've applied for a position with less skill / experience requirement than what you have, you'll fall into that lower range. The solution is to apply for the higher position when available or get promoted while working at the lower range if you're confident.

  • This idea makes a lot of sense to me and I appreciate this answer a lot, but do you know of companies that have Software Developer 2 getting paid way less than their competitor down the street? I understand the idea of a fixed salary, I am just confused why it is significantly lower than their competitors' salaries for the same work. – lukebeast887 Aug 17 '18 at 13:58
  • @lukebeast887 That's a tough one as there's a lot of factors to consider. The most likely being organization structure, saying you're an SD2 at company A and company B, but at company B you have an architect, a SD3, and a dedicated scrum master, at company A you are the SD2, the architect, the SD3, and the scrum master along with your peers. Company B is justified in offering a lower salary as their SD2 requirements aren't as rigorous and chances are they know this. Another reason is they're plain out cheap don't want to pay their employees at market. – RandomUs1r Aug 17 '18 at 20:12
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is this a common hardball negotiation tactic?

No, they're not negotiating. Any number of things might cause this, anything from they have no control over the amount, to their perception of the market is different from yours. Or even just an equation between how much % of the revenue stream this worker will generate compared to his/her cost.

You can analyse it all on incomplete information until the end of time and come up with endless possible reasons.... but realistically if the money is a show stopper, then just stop the show.

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