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I was recently headhunted for a software developer position, and once I received their contract draft, I noticed that the proposed salary was way lower than I expected.

Once I voiced my concerns, they immediately raised their offer by almost 40%, which I ended up saying yes to, but they managed to hit exactly what I had considered my minimum acceptable salary, and at this point I feel sorta cheated by them anchoring the expectations so low.

While I do feel I have a better grasp of how to respond to this kind of offer in the future, I have to ask:

  1. Is this negotiation tactic normal?
  2. Is it a red flag?
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    Are you sure that the initial salary offer wasn't a typo? Perhaps part of a boilerplate document that just sticks a very low number in there by default? – Pyrotechnical May 31 '19 at 16:01
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    Sleazy HR tactics, while reprehensible, aren’t necessarily indicative of a toxic workplace. – AffableAmbler May 31 '19 at 16:07
  • @Pyrotechnical Yes. – Alex May 31 '19 at 16:14
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    It is a red flag for me. I will expect from this employer that it will be a fight to get reimbursed for a book, a training video subscription, etc. and they will chip on every expense. In the end, they are not valuing their staff, means I will feel the management will be more on the financial side than human side, resulting policies that will probably not make me happy. – Sebastien DErrico May 31 '19 at 16:20
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    Did they have any idea of what your expectations were? Hard to fault them for disappointing you if they didn't know what you wanted. – cdkMoose May 31 '19 at 20:05
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This is a red flag for it's secondary effect: you may we'll find yourself sitting next to someone doing the same job who didn't raise this concern and is not receiving the 40% negotiating bonus you have. Expect higher turnover of colleagues who don't negotiate well. Management's failure to consider this is concerning. I would also have concerns about how such an organization treats team members from diverse backgrounds and how that could open them up to crippling lawsuits for example (jusidiction dependant).

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    And your colleague on the other side may be making 30% more than you. – gnasher729 May 31 '19 at 16:17
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Lowballing of this kind is a staple negotiation technique. The feeling of success when getting a massive upmark overshadows the fact that the end outcome is not that grest.

However, as you pointed out, it’s a recognizable technique which won’t work on more experienced people. Coming across this in salary negotiations is likely to be either a typo or a red flag. A company interested in attracting serious, experienced professionals will generally avoid these kind of tricks (caveat - local variations may apply).

Your best defense is to stay on top of expected salaries for your role, and what you really want to make, not just a minimum.

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    They also have to expect that if they are lowballing, I'll be highballing. If I have a range from X to Y, and they offer X-40%, then I won't accept for less than Y. – gnasher729 Jun 2 '19 at 18:57
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I wouldn't call it "normal". It happens, as you saw. It is usually a counter productive tactic.

What should happen is that you have a job interview, and the hiring manager decides if they want you or not. They also decide how much you are worth to them. They might have a position where they would take an inexperienced person at a lower salary, or a more experienced on at a higher salary.

The HR would make an offer - which should be compatible what the hiring manager said. If HR gave you one offer, and then increased it by 40 percent, then they haven't done that. That's a stupid approach. Because it doesn't work, because it drives away people. If I want X, and you offer X-40% and then switch to X, by that time I'm gone. Even if I had taken that offer if it had been your first offer. You'd have to offer me at least X+10% to make up for the insult.

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  1. Is this negotiation tactic normal?

Yes. Companies only want to pay as much as they have to to get you on board. If you'll accept a low offer then that's what they'll pay you. It's up to you negotiate a higher offer. You wouldn't offer to pay more than you have to for dinner, a new suite, etc., right? Companies don't want to either. This is/should be a negotiation.

  1. Is it a red flag?

Not necessarily. It's a perfectly acceptable negotiating technique, but it may be a harbinger of what you're likley to encounter during ongoing salary negotiations when it comes time for a raise.

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    This answer is abysmal. Yes, companies don't want to pay more than they have to, but that doesn't mean paying as little as possible is a tenable idea. It's important for a business to have a content base of employees with little turn-over, and offering miniscule salaries is a poor decision from a long-term perspective. The employee that accepts the low-ball offer will leave your workplace a few months from now when they realize what the going market rate is. Even the employee that realizes your sneaky tactic will distrust you forever and be less content with you and more likely to depart. – Corrado Jun 1 '19 at 13:42
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    And yes, it certainly is a red flag. I would not want to work with someone who engages in petty manipulation upon our first encounter. I might still accept the job if I was desperate enough, but you can bet I won't show any loyalty or dedication to you and will leave when the first good opportunity arises. Some negotiation techniques are of course warranted, but only to a certain limit. – Corrado Jun 1 '19 at 13:45
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    So because you find this practice bad that makes my answer bad? Seems like you're throwing the baby out with the bath water. – joeqwerty Jun 1 '19 at 13:45
  • "You wouldn't offer to pay more than you have to for dinner" < this is literally the (original) idea behind tipping, and it's pretty common around the world. – Erik Jun 3 '19 at 11:07
  • Also, only bad companies pay their employees as little as they can get away with. Good companies know that the damage from having underpaid employees far outweighs the savings on salaries. – Erik Jun 3 '19 at 11:09

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