I've recently applied to a company and got invited for an interview at a future date, but surprisingly my first response from them includes the words, "we do not negotiate our offers". The offer seems reasonable, but just thinking about the fact that you don't have a choice makes it come off as a red flag.
This is a very reasonable position. Some offers are negotiable, others are not. It's good that the company tells you how it is from the get go.
In many cases, companies have fixed pay levels for a given position or paygrade, +/- 0. Others have personalized pay structures. Unless you're coming in as the CEO or at least the HRD, you aren't going to change that policy.
This statement just saves you:
- The trouble of applying if you're not happy with the advertised salary,
- The disappointment of expecting more and not getting it,
- The wasted time and energy in trying to negotiate.
This is not a red flag.
You always have choice to reject or accept their non-negotiable offer.
Even with negotiable offers, at some point the company will not budge and you will be forced to either accept what is on the table or walk away.
Just make sure that you know exactly what you are looking for in terms of an offer and make your decision accordingly.
It is not a red flag. In addition to the other reasons listed in other answers, it can be a tactic to avoid demographic pay gaps or juniors being paid more than seniors. Many sources indicate women tend to be treated differently than men when they negotiate, leading to systemic biases:
Some companies which have adopted no-negotiation policies, such as Coinbase, have cited such disparities as a primary reason.
Wow.. I'm surprised and troubled by the responses I see here as from where I am located (the midwest US), this is a huge red flag so much so that I would need further discussion with their HR department before I would contemplate attending the interview.
The important thing to note here that a lot of answers are skipping over, is that this company has stated their non-negotiation tactic before you have even sit down to talk. This take-it-or-leave-it mentality puts the bargaining power 100% in their hands and in my opinion shows a lack of regard for your personal time and energy.
Since the company has stated that there will be no negotiation of pay and benefits, unless you are very desperate, I would strongly recommend forcing the compensation conversation with them before you begin the interview process to ensure that you are both on the same page before you invest much time and money.
Couple things to remember about interviews:
- Interviews are a two-way street. You are interviewing the company just as much as they are interviewing you. This idea that they alone set the price-point is very company-centric thinking and a tactic that can only benefit the company during the hiring process. It also gives you a small glimpse of their HR department culture... if they undervalue you when they are trying to put their best foot forward how exactly are they going to act later on?
- The interview process is costly for you. When looked at as a percentage of total available resources the interview process is considerably more costly for you, the individual, in time and money than it is for the company. The time investment involved researching the company, preparing for the interview, time taken off your current job. The money spent dressing for the interview, accruing travel costs, using time taken off. Even non-tangibles like energy investment required for job-searching while balancing an existing job and family, and the opportunity cost of pursuing this opportunity as opposed to focusing on some other. Your time is valuable - it is the reason why the company is interested in hiring you - and so it is important to weigh that return on investment as you go through this process. Unless the company is being transparent about the compensation package before engaging in the interview process, this non-negotiation policy shows a complete disregard for your costs.
- We are in a huge sellers market right now - This is a big one for me and honestly why I would probably just walk if I saw this policy statement without a lot of "but here's where you benefit" information alongside it. Businesses across the world are having a seriously tough time finding employees everywhere from retail positions to office professionals. COVID radically changed the workplace. Employees are demanding work from home rights, salary amounts are going through the roof, unemployment rates across the world are at an all-time low... there really has never been a better time in the last 20 years to switch jobs. Unless you are in an extremely niche industry or rare saturated market, chances are you hold significantly more power than the company does. This idea that a company would be as out of touch as to think they can get away with trying to bully away hiring candidates negotiation power is jaw-dropping to me. This is the kind of policy that chases away promising hires and then you hear executives complaining that they just can't find good people.
TL;DR Most of the answers here revolve around this type of note coming during an actual offer... and yes, if that is the case then it's not a concern at all. But this note came during the initial interview communication! That is a HUGE red flag and worth investigation before investing any serious time and energy on this interview.
I wouldn't go as far as DanK in saying that it is a huge red flag, but I would agree that it can be. Obviously if you're someone who relishes the chance to show your merit and earn your worth, then you're going to want a more flexible employer. But that's not enough to say it's a red flag in general.
The key question from my perspective would be something like "I understand that you don't negotiate on the initial package. So that I can better contextualise the offer, what does performance review and career progression look like here?"
To find the flag is green, I'd hope for something like "We have pay bands with clear criteria available on the internal intranet. You get a performance checkin every 3 months to assess progress. The median employee goes up X bands in their first 3 years, which would increase their total compensation by Y." Essentially, we're talking about a company which operates respectfully, fairly and transparently. In particular, it's an employer which has resolved to pay people fairly based on their job performance rather than their skill at poker.
On the other hand if they're both inflexible and opaque, that's probably a red flag of a company that sees employees as adversaries and wants to hold all the cards. Instead of being fair by gender or whatever, odds are that the behind-closed-doors algorithm consists of trying to work out the smallest amount each candidate would accept.
This is a really good thing.
It means that the company is going to give you their best number when (and if) they first offer you the job. They're not going to try to fob you off with 15% less than you actually deserve.
Also, the fact that they told you this up front is good. It means this is a no-nonsense company that isn't going to mess you around.
All the best with your application.
You have plenty of answers already, I will give you a perspective on a reverse situation.
When discussing a position with a company I liked a lot and wanted to join, I was faced with the perspective of the ritual "let's meet in between" during negotiations. I physically hate such talks and I told the company that I do not negotiate the salary so I would like them to give me a one-shot true proposal, not a padded one we would haggle about. It is either OK and we shake hands or we leave on friendly terms on the spot.
They liked that. They gave me a very good salary at the top of the grid for my grade, which I accepted and happily work there.
It's not a red flag, but it's also not an unassailable truth (unless the employee is something like a government entity that's statutorily barred from negotiating on the job offer).
All the other answers seem to be taking the company's statement at face value. Maybe I'm a cynic, but "we don't negotiate offers" seems to me to just be an anchoring statement at the start of a negotiation.
Once they have extended an offer, despite their initial claim, you should feel free to negotiate. There's of course no guarantee of success, and the company may stick to their hardnosed position, but they have invested significant resources in interviewing and extending you the offer so you do have some bargaining strength here. If they won't budge on salary, you can also try negotiating on other aspects -- benefits (including signing bonus, options, vesting timelines), vacation time (even before starting), flexibility, etc. If at the end of that you're satisfied with the offer, great! If not, keep looking. (Notice how in practice, their line didn't really affect the process at all)
It’s not a red flag where the refusal to negotiate the salary should stop you from taking the job. What would however stop you would be a non-negotiable offer that is too low. If you want x and they offer x-2000 then you don’t accept x-2000 because they don’t negotiate and you can’t get more, you walk away instead. Best with a comment like “you don’t negotiate, right? So goodbye, nice to meet you”.
- Some candidates negotiate offers. Some candidates don't negotiate offers.
- A good employer should pay candidates fair salaries, as in 2 employees of the same ability should be paid the same amount (a bad employer may seek to pay as little as they can get away with).
- Negotiating ability is presumably not one of the job requirements (if it were, that may be a different story).
Conclusion: a candidate's attempts to negotiate should not increase* an employer's offer.
An employer can handle this in a variety of ways. They may be upfront about not negotiating, to appropriately set expectations. They may only mention this when a candidate attempts to negotiate, to not scare off someone who might appreciate the benefit of negotiating without personally engaging in that. They may give a slightly lower initial offer and allow negotiation, but end up giving everyone the higher intended offer regardless of whether they negotiated (which would allow for the "feel good" benefit both for candidates that negotiate and for those that don't, without the downside of actually having negotiation impact the offer... but this would be a bit hollow and deceptive).
So no, it's not a red flag for them to say they don't negotiate.
* Good employers should also be flexible, so they may allow negotiating for reasonable trade-offs that lead to a comparable offer, e.g. trading 5% salary for an equivalent amount of stock, or something like that. This may or may not apply if they explicitly say they don't allow negotiation (given that negotiation in job offers usually consists of little more than asking for more money).
One can also consider "we don't negotiate" to suggest they'll pay as little as they can get away with, which is a company you'd want to stay away from.
But given the above argument almost necessitating that a good employer not negotiate, them saying that is certainly not a red flag.
You can look out for some other indicators to help you read between the lines. For example, if they also say "we pay a competitive salary", that may make it more likely that they have good reasons for not negotiating.
It can be a red flag (depending on circumstance).
Not being willing to negotiate can certainly be a sign of a totalitarian management style. A typical my-way-or-the-highway approach. Although there are certain cutthroat business environments that this may be par-for-the-course many people would not accept this type of work environment.
My question to the prospective employer in this situation would be on what is my salary being decided? If I'm administering an e-commerce website that is generating 500K worth of sales then the value I add to the organization is clear.
If I'm doing admin work on mission-critical infrastructure then again the value of my work is clear. If the post I'm applying for was vacant for a year before I applied for it then again the salary should reflect it.
Although, it may be possible that the employers have carefully considered exactly how much human capital you will be adding to the organization and have decided on a completely reasonable salary in accordance with it. I do think it is more likely you find it is a jerk employer that lowballs everyone as a matter of principle.
If a high-value employer comes into contact with a high-value employee they will both have a good idea of the value they can provide to each other and will be open to learning that each party can add value to the other one in a way neither parties anticipated at first.
People are complicated things, they often do things that can surprise you.
Also, what strikes me as a deficancy to this approach is that it gives no motivation for an employee to excel.
If I earn the same money doing a mediocre job then doing a great one why bother?
How exactly are they going to know how good of an employee Im before the interview has started?
I think most of the answers are missing the main point:
Companies that have a continuous stream of qualified applicants do not need to negotiate salaries. If someone doesn't want to take an offer, they can just move on to the next candidate.
If it's difficult for a company to find the right candidate, the opposite is true: they will do what it takes, within reason, to hire that candidate.
The problem, then, is that after you start working for a company in the first situation-- you're very easily replaceable. Unless you move up in the hierarchy, don't expect to make any more money.
I will answer the question with some related questions I can think of dealing with analogous situations:
I recently walked into a store and wanted to purchase a product, but surprisingly a sign next to the cashier said “we do not negotiate our prices". The price seemed reasonable, but just thinking about the fact that you don't have a choice makes it come off as a red flag.
A guy answered the ad I put out for a used car. After test-driving my car he said he would like to buy it for $10,000. Surprisingly he added “this is the best I can offer so it’s not negotiable.” The price seems reasonable and was actually a bit more than I was expecting, but just thinking about the fact that you don't have a choice makes it come off as a red flag.
I am a freelance consultant who charges $100/hr for my services, a rate that most clients find acceptable and that keeps my work schedule filled at a level I find satisfactory. A prospective client asked for a quote for a project and after I sent it to them asked if I could reduce the rate to $80/hr. When I said my rate is what it is and is not negotiable, the client got upset and stated that while my original rate seemed reasonable, they decided not to work with me since just thinking about the fact that they don’t have a choice made it come off as a red flag. Was the client reasonable?
If you can answer these questions, well, I think you’ll have your answer for the current situation as well.