I'm responsible for building a software development team in my company. Once this team is ready I'll have to manage it and will be held responsible for its performance.

One point of arguing we have with my bosses is that most of the time, I tend to give candidates the salary they ask for without trying to negotiate when I think it's in our range and is reasonable, and when I actually want to hire them. Whereas my bosses tend to systematically counter-offer with a lower figure, regardless of the candidate's proposal and regardless of the candidate being a perfect fit for the position.

Practical example: our budget for a position is around 50k. A candidate comes in and asks for 45k. My boss will want to counter-offer with 42k systematically. And if another candidate initially asks for 60k for the same position, then my boss will reply with a 56k counter-offer.

They tried to do the same to me upon hiring me some time ago, and they understood pretty quickly that it was not in the interest of the hiring process being completed. But they want to do this kind of trick to every candidate. And I think sometimes we (the company, the candidate) would be better off to let got of this stuff and just accept, if we think the candidate is a good fit and the proposition is reasonable.

What makes me think this way are the following points:

  • Candidates will feel their expectations/needs are respected
  • The company will have a reputation of "paying well"
  • Systematically negotiating is a huge waste of energy for both parts - let's put this energy into more interesting battles
  • Systematically negotiating like this feels a bit like as if it was a zero-sum game (if the candidate wins, the company loses) - I think recruiting is more about creating value together
  • Giving a little less than asked for creates resentment in the long run, and I don't want my employees to feel resentful - so in my mind it's creating a lot of problems for a small win
  • Top companies (Apple, Google, Microsoft) are known to pay huge salaries - of course one can say, they can afford it, but isn't it also part of what explains their success?
  • Systematic negotiating for 2/3k$ feels like a dirty recruiting trick to me at some point - I don't want the people in my team to be dirty tricked

On the other hand, my bosses' arguments are:

  • "Nobody does it, so it must be stupid"
  • "Nobody does it, so it would appear weird to the candidates"
  • "When I was an employee, I never had the salary I asked for, so I guess nobody does it"
  • "It would put us in a position of weakness and neediness"
  • "Candidates always ask for a little more than what they expect"
  • "We can't afford it"
  • "We are the ones offering a job, they should be happy just for that"

Those arguments don't seem really valid to me. But as they're my bosses, I have to convince them and not the other way around.

So basically, what I'm asking is, whereas I think that my general feeling is valid, I still have to sharpen my saw to convince them with arguments so:

Are my arguments valid based on your experience? Are theirs?

What could be some ground-earth-based solid other arguments that I could use to convince them that it's not so stupid to avoid systematic negotiation?

EDIT:

I just found a great article on this very topic from HBR.

Negociating is not the same as haggling - thanks to Steve Jessop for mentioning the term. I'll put the main conclusions here as soon as I come up with something digest.

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    One thing I would keep in mind, is that if you give a candidate exactly what he asks for, then he may then feel that he screwed himself out of getting more. A different approach would be maybe to counter a bit lower, then if the employee doesn't accept, you give him his requested, then he feels good about himself for negotiating so well. If he accepts the lower offer, then you can call him up later and say that you decided to go ahead and give him the full amount he requested, which buys you some goodwill with this new employee. Either way, I think the employee will be left feeling good. – Kik Jan 22 '15 at 21:52
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    Comments are not for extended discussion; this conversation has been moved to chat. – Monica Cellio Jan 23 '15 at 19:40
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    I'd counter-offer the not-so-perfect fits. I'd tell the perfect-fits that we have gone over the line with our budget since we expect top notch skills and efficiency. Sometimes being fully transparent is not too bad. – Nik Kyriakides Jan 24 '15 at 22:16
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    If you really want to convince him you shouldnt believe that you can jump straight to logic to change his way of thinking. I love the Ethos, Pathos, Logos approach. Ethos, or credibility, is required before you can even stand a chance of winning the argument. Assuming your boss believes you credible, you should next appeal to his emotion, which involves really understanding why he thinks what he does, and then finally bring it home with some good ole flawless logic. – Wjdavis5 Jan 25 '15 at 18:18
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    So skimming through the current answers, it looks like only Redza Ali recognized that different companies can be in different positions, but no one has addressed that the interviewees might have differing experiences. Someone in their 20s, for example, is likely to have a different viewpoint on negotiating than someone in their 40s or 50s. Additionally, like haggling for prices is viewed differently in different parts of the world, I expect negotiating for salary to similarly be viewed differently depending on where your company is located. – Izkata Jan 25 '15 at 19:54

14 Answers 14

up vote 24 down vote accepted

What your employers are doing is often called "haggling". It's one possible technique to use during negotiation, however it's not the only thing to consider. A characteristic feature of the genre is that (within your pre-determined price range) the price you decide to offer depends solely on the candidate's request, not on any other feature of the candidate.

It seems effective as a means of chiselling a couple of $K off the salaries of most or all employees, provided they don't know about it. If they do then they're in the driving seat, because they know that all they need is to bump up their request by a couple of $K accordingly. I expect that your managers believe this is what candidates are doing. So in effect the managers are also just taking the candidate's lead what the pay should be, but they're interpreting the request very differently from you.

Presumably you personally refused their counter-offer, and they gave you what you asked? So they're trying to catch out people who are not confident that they're worth what they ask for. You can argue all day whether confidence is reasonable proxy for the candidate actually being correct! Many people say it isn't if they really think about it, but behave as if it is.

As to whether this saving is worth it or not, I think everyone's points can be criticised:

  • Candidates will feel their expectations/needs are respected

True, but unless they only ask for the absolute minimum they need/expect, it's possible to respect their actual needs by paying them a little less.

  • The company will have a reputation of "paying well"

Very true for those who ask a single employee, "does the company pay well?", because that employee will respond, "yes, they paid me what I deserved". But those who get their information in a more aggregated way (which of course can be really difficult: you rely either on published ranges in job ads, on company self-reporting, or on self-selecting employees willing to state salary in a survey) will just see a number, they won't see what was asked for. You can put up the numbers by giving everyone a payrise tomorrow, doesn't necessarily mean it's worth it for the reputational effect. I wonder how many companies' PR departments have ever said, "the most effective way we can use our budget is just to divide it up among the staff so that they tell their friends the company pays well" ;-)

  • Systematically negotiating is a huge waste of energy for both parts - let's put this energy into more interesting battles

Probably not true. I expect your managers find it quite an easy and low-energy activity. Applicants might find it stressful, but the negotiation over a couple of $K won't take long and then it's over.

  • Negotiating feels a bit like as if it was a zero-sum game (if you win, we lose) - isn't recruiting all about creating value together?

No, it's not all about creating value together. If it was really a zero-sum and you don't care who wins, you wouldn't even have an acceptable range. You'd just pay everyone literally whatever they ask for. The reason you don't do that is, ultimately, the same as the reason you might negotiation within your range. To save money for the employer. It's just different amounts of money.

  • Giving a little less than asked for creates resentment in the long run, and I don't want my employees to feel resentful - so in my mind it's creating a lot of problems for a small win

Quite possibly true for some or many employees. Others will be quite happy the counter-offer was only a couple of $K short, rather than the bottom of your range.

  • Top companies (Apple, Google, Microsoft) are known to pay huge salaries - of course one can say, they can afford it, but isn't it also part of what explains their success?

Paying huge salaries isn't the same as not negotiating. Do they have a reputation for never making counter-offers?

  • Systematic negotiating for 2/3k$ feels like a dirty recruiting trick to me at some point - I don't want the people in my team to be dirty tricked

This seems the same as the resentment point. But if you mean that, separate from any resentment it causes, it is morally finer and less dirty to pay the extra $2K, then that's much easier for you to say then for them to say, since they're the ones holding the budget and you aren't.

  • "Nobody does it, so it must be stupid"

Unlikely to be true, but also unlikely to be what they mean. If most people do it, and you're advocating something unusual, you'd better have a more compelling case than just "I think that there will be a permanent positive effect on morale, going far beyond the immediate period of hiring, but I don't have any evidence for that". So this is claim, while not strong as stated, may be a shorthand for "if you want to do something extraordinary then provide an extraordinary justification".

  • "Nobody does it, so it would appear weird to the candidates"

That seems ridiculous. Nobody was ever freaked out by their $2K-over-genuine-expectations request being accepted

  • "When I was an employee, I never had the salary I asked for, so I guess nobody does it"

The singular of data is anecdote, but note that your manager's intuition about what people do is not more strongly or weakly founded than your intuition about how employees will feel. You're both just applying limited personal experience of being the employee.

  • "It would put us in a position of weakness and neediness"

Don't see it myself, but some people consider haggling a sign of virility. I rather suspect that your managers have fallen into an error, that candidates are basically worth what they ask for, but they stick a bit extra on out of hopefulness. The manager's job is to knock that extra down a bit just to prove that they're not desperate. That's quite a modest responsibility. If they were more ambitious, they'd have an opinion what the difference is between a $42K employee and a $56K employee, and negotiate based in part on their assessment, not solely the candidate's request.

  • "Candidates always ask for a little more than what they expect"

Might well be true of most candidates. Apparently it wasn't true of you, though, so not "always". How many candidates actually accept the lower counter-offer and how many don't? The ones that do definitely asked for more than they were willing to accept.

  • "We can't afford it"

Might be true, but unlikely, since as previously discussed the counter-offer is based purely on what the candidate asked for, not on the budget.

  • "We are the ones offering a job, they should be happy just for that"

The last resort of the employer, "shut up and obey, I'm doing you a favour here". If this was literally true you could offer minimum wage. The employee could equally say, "I'm offering to work for you, you should be happy just for that". The result of the negotiation tells you who was right, but in practice both parties have to prefer to make a deal rather than not make one, or it won't happen.

  • "Presumably you personally refused their counter-offer, and they gave you what you asked?" - I had to be very firm and inflexible about it but yes, that's what happened - and I can't expect everyone to behave this way - btw, thanks for the great answer – Jivan Jan 23 '15 at 11:12
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    @Jivan: the way that this last little bit of a negotiation usually goes is that both sides would actually be willing to settle at the other side's number. The side that's willing to pass up the deal entirely (or can convincingly fake that) wins. It's not pretty ;-) – Steve Jessop Jan 23 '15 at 11:20
  • ... oh, and the risk is both sides convincingly fake it and you don't do a deal, despite there existing a range of numbers both sides would settle for, had they not been intent on making the other blink first. It's silly for the employer to say, in effect, "we're perfectly happy to pay this person $50k, but not if they ask for it, only if they ask for $55k". Either they're worth $50k to you or they aren't, you don't know for sure, but the number they ask for really isn't the most reliable way to figure that out :-) Your bosses think it's a reliable way to judge what they'll accept, though. – Steve Jessop Jan 23 '15 at 12:38
  • I've always been a fan in negotiating of getting through the entire interview and get to the point of salaries. Most of the time I'm asked what I want before I can ask what it pays, I take a moment to consider what's asked of me and come up with a "fair" salary. Once I establish that number, it doesn't move. Typically they'll counter and I just say "sorry, I believe my offer is more than fair" Every job that's reached the point of negotiating salaries I've received an offer for the requested amount. – RualStorge Jan 26 '15 at 16:12

am I being too naive here

Probably.

There are two major issues I see:

  1. What candidates ask for is usually (though certainly not always) a little higher than what they want. Experienced candidates know that you will haggle, so ask for a lot to get what they want. By just accepting, you're effectively giving them more than what they want.
  2. You aren't going to pay me a million dollars a year, no matter how much you want to hire me. So you've got some limit on how much you think people are worth. Not respecting that might cause you to make poor decisions, and will likely cause you to make less effective arguments for the low-negotiation hiring approach.

what could be some ground-earth-based solid arguments that I could use to convince them that it's not so stupid to avoid systematic negotiation (even if nobody else seems to do it)?

I think that you already make some compelling arguments for it. Given the cost of replacing employees (and finding them in the first place), if you can increase your retention rate even a few months, it will likely be profitable to the company to pay a little more up front. Negotiations definitely have the potential to make an employee feel taken advantage of, and thus leave.

There are recent studies that show that employee engagement has big effects on their productivity. I'd imagine that less contentious compensation discussions would help that - perhaps more than your concessions.

Statistically, women negotiate salary less. By providing a low-negotiation hiring approach, you're more likely to have a diverse workforce and more likely to draw good candidates due to the wider candidate pool. There was also a recent study (MIT if I remember correctly, which I can't find the link for) which positively correlated women on a team with the productivity of the team as a whole.

In all, it certainly seems like a good idea to concede salary negotiations that aren't far from what you consider fair for that candidate in relation to the rest of your team.

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    Nnn... That isnt true. Not all candidates ask for more than they want. Some will want to be in that domain. Some will want to work on that technology. Some will not be good at negotiating. Just because you or I might ask for more, doesnt mean everybody does. – bharal Jan 22 '15 at 22:42
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    If women negotiate salary less, is there any chance they will ask for less to start? If so, be careful that you are paying similar salaries for similar work, in spite of what people are asking for when you hire them. – thursdaysgeek Jan 22 '15 at 23:35
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    @thursdaysgeek artificially levelling salaries doesn't work. Different individuals are happy with different amounts based on their individual circumstances/motivation. You end up losing all the most ambitious workers, leaving the mediocre ones who arn't motivated to train up because they are already overpaid for their level of skill and simply getting to the top of their band for 'time served'. You can see examples of this happening widely in government. – JamesRyan Jan 23 '15 at 11:22
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    @JamesRyan In most of the US, employers reserve the right to fire employees for any reason and at any time. There are protected-by-law exceptions for whistleblowing, anti-discrimination, and limited written and implied contracts. Additionally, it is up to the employer to draw the distinction between 'mediocre' and 'poor', and as long as they honor and comply with their written performance guidelines (which they are free to change at any time as well), an employee may be fired, be cut in pay or hours for performance. – Dacio Jan 23 '15 at 18:26
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    @jamesryan - if their expectations are skewed by historical discrimination, you will still end up with pay that is based on gender, not performance. – Telastyn Jan 24 '15 at 3:06

Google and Microsoft pay well. But they want their pound of flesh. Since they are the payers, what they give with one hand, they may very well take with the other hand.

I am not sure that you, as the team lead, should be the one negotiating salaries. I think the HR people should be the ones negotiating salaries since they have an interest in keeping salary figures consistent with responsibilities and duties. Team leads and managers should have an input in terms of assessing performance and be able to make recommendations based on their assessment of performance, their voice should be decisive when it comes to promotions but HR should be the ones doing the nitty gritty salary determinations.

I'd say, if the candidates' salary demands are reasonable, there is not much point to negotiating to the death and if their salary demands are more than average, then their performance had better reflect that. I think salary demands are a silly game. Yes, I could respond by allowing the high salary. But then, I'll give a lower raise. There are so many ways to take back with the other hand what I gave with one hand :)

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    +1 - Automatically offering less is something any fool can do and is not a valid negotiating strategy. If they don't want people paid at the top range of their salary offering, then they should take some responsibility and lower it. – user8365 Jan 22 '15 at 22:49
  • Most certainly companies (in particular big companies) give smaller raises to people who start at a higher salary than their peers with the goal of leveling out disparities over time. However, over the course of the 5 to 10 years it takes for this leveling to occur, the person who negotiated better will likely make $25k to $75k more. That is nothing to sneeze at. So "salary demands" are most certainly not a silly game. It is part of being in the business world. You aren't entitled to a job, you have to provide a service and sell yourself. You are a business. Business is all about negotiations. – Dunk Jan 23 '15 at 16:04
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    @Dunk As I said, I have so many ways to cut youback on your salary - I can cut o your sick days and vacations, your health insurance, your perks, etc. 75K over 5 years simply because you "negotiated"? Not believable, especially since HR has salary bands in place. 25K in pre-tax over 10 years because you "negotiated"? What you just did was negotiate for pocket change, and who knows what they took back from you. – Vietnhi Phuvan Jan 23 '15 at 21:50
  • @Vietnhi:Since vacations, sick days and health insurance tend to apply the same for all employees (except for those who negotiate extra vacation days) I don't see them recovering that out from your compensation. Also, someone who negotiates for $10k to $15k more per year will easily add up to my range (eg. year1=$15k, year2=$28,500,year3=$40k) even just $5k difference (year1=$5k, year2=$9500, year3=$13,500....). That is using 1% less raise than you would otherwise have gotten and isn't taking into account that your actually raise would have been a little higher because your salary is higher. – Dunk Jan 23 '15 at 22:53
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    Keep in mind the employer will probably want to keep you. So they can't just willy-nilly not give you a raise without risking losing you. So they give a raise that is slightly less than what you would have gotten. 0.5% to 1% is typical depending on the band you fall in when your salary is much higher than the average for the position. It takes quite a long time for salaries to even begin to level out. By that time, the person who is a negotiator will likely have left using their higher salary to leverage an even higher salary if raises continued to be low at the current company. – Dunk Jan 23 '15 at 22:59

Are my arguments valid based on your experience?

Yes.

As a hiring manager, I always have in mind a salary range that I think an open position is worth. By that time, I have submitted the requisition to the powers-that-be within my company, and gotten the range approved. I am now free to make an offer within that range.

While interviewing, I want to find the best possible candidate to fill the position who would be willing to accept a salary within that range. I'm never looking to fill a position with the cheapest-possible candidate.

If I understand the premise of your arguments correctly, you are assuming you have found the best candidate for your position's needs, and that candidate is willing to accept an offer within your pre-approved range.

For me, I see no need for further negotiations at this point. You have found your new hire, and you have an approved salary.

Done.

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    Simple, quick and efficient. Thanks. – Jivan Jan 23 '15 at 16:18

Here's an answer from the perspective of making the employee feel good about being hired. You don't want to just accept their proposed figure and them leaving them second-guessing themselves and feeling like they asked for too little. In my experience, such a reply is well prefaced by an introduction such as:

Before we give you this offer, I want to emphasize that we want to make sure our employees are happy here, and that includes paying them enough money so that they feel like their needs are being met and that they are being paid fair market wages. We want you to know that we aren't going to quibble over a few dollars trying to save the company some money, because in our experience that creates employees who are less happy and in return don't give us their best work. We want to give you our best offer in return for your best work.

If you like, can you even extend it into mentioning something about how good performance will be rewarded at annual review any the like, especially if the asked salary is at the low end of your range. That way if an employee later finds out they could have asked more, they can justify asking for a larger raise at review time - they were an unknown at the time after all, and now they aren't.

And then at that point, having gotten out of the way that the company wasn't planning on countering (and why) you can then proceed to tell the employee what you just implied, namely, that you are offering them the amount they asked for.

Of course that does not mean you have to pay what they ask if the amount they are asking is in the not in the range you are willing to pay (whether for budget reasons, or whatever). But if they are asking for more than that range it provides a nice segway into telling them what your best offer is.

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    I do this. I tell them: tell me what you want to make. Then convince me that's what you're worth. I will either pay you that or not hire you; I will not try to offer you less than you want. Some candidates don't believe me and give me a range (one guy asked for between 8 and 40 dollars an hour) - I don't hire them if they will not say a number. This might not work for everyone but it works for me and none of my staff report feeling like they left money on the table because I agreed to their "first number". Also, for very young candidates, I often offer more than they ask for. – Kate Gregory Jan 23 '15 at 12:37
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    I have never been in a position of actually negotiating pay. When I was looking for a job, I had looked long enough that I took -A Job- when it appeared, not: "Gee Whiz, look what they are going to pay me!" I only applied to positions that appeared to be offering pay that I could accept, else why waste everyone's time? Also, I see no point in employers attempting to hide what they will pay, or make it different for different people. When purchasing, I don't negotiate: I pay what is asked or walk away. When being hired, I don't ask for pay: I take what is offered or walk away. (male age 50) – user37746 Aug 7 '15 at 16:28

Jivan, you have the right instincts. I have a different outlook that will put things in a whole different light for you.

First of all, advertising a position and then asking someone who answers "What salary they expect" is incredibly insulting and un-businesslike. When you advertise you are the offeror, since you made the first move it is your duty to make the offer and that includes the amount and all terms. That is the proper and businesslike action.

When somebody advertises a good or position and then tries to elicit amounts from respondents, that is called a "come on", and is incredibly unprofessional and disrespectful. If somebody were to call me up and ask to hire me and make an insulting come on (or other incomplete offer, such as one lacking a date of hire), if I did not walk out the door right then and there, I would say coldly: "You called me, I appeared and presented my credentials, if you want to make an offer, make it in writing." Then I would bid them adieu.

If somebody comes to you unasked, on the other hand, then they are the offeror and they must state the terms they will work for you. In my current position I approached the company, so I made them an offer of terms, as was proper.

Either way, the gentlemanly action is to finish the deal in a single stroke without a counteroffer. When you put out your offer, it should be your best offer to the employee. If they reject it or make a counteroffer, that is the end and it is goodbye. Likewise, when someone comes to you with an offer, you should either accept it or reject it, that is the noble thing to do. Making a counter-offer is not necessarily rude or unbusinesslike, but it reflects on your character and should only be done after careful consideration. To make a petty counter-offer designed to extract a few nickels is contemptible and the mark of a knave. You should never hire such a person, nor sully your honor by doing such a thing.

These are the standards of behavior among noble men, and should make clear to you the nature of your current associations.

  • Good point about separating "we approached the guy" versus "the guy approached us" - didn't really think about that and it makes perfect sense – Jivan Jan 24 '15 at 12:28

Discarding the philosophy of salary negotiation, on which much could be written, it seems as though you are not being empowered to offer the salary you believe they should receive. It must feel a little like a car dealership, "Well, let me talk to the guy in the booth up there and see if I can get you the deal you want."

If he's not in the room with you during negotiation, make the offer, accept the salary, and when asked, say, "We came to agree on a salary of X." You don't need to tell him how the negotiation actually went - it sounds like you enjoy one sided negotiations, and if that works for you, then go for it.

If he demands details, or participates in negotiations, you might as well hand him those reigns completely if you aren't willing to follow his directions. In this case it appears to be a situation where he's telling you how to perform your job, and you don't want to do your job the way he wants you to do it. So give him that aspect of the job, or do it according to his instructions if you can't otherwise gloss over it.

If you want to debate the philosophy of negotiations, then you should do your research. Your arguments are very unconvincing, and a whole book could be written just about salary negotiation - and I'm sure several have been. It's not a suitable topic for this site due to its breadth.

  • Great points and thanks for your honest answer about the arguments being unconvincing - it motivates me to try find more valid arguments because I feel my position has some meaning though I still can't perfectly express it in a rational way – Jivan Jan 23 '15 at 15:25
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    @Jivan I actually wrote a bit on the issue before I realized it would be reams to cover all the bases. Two points to consider - why not be the first one to make the offer, and then expect them to accept that without negotiation? Turn the tables around. What is likely to happen with candidates when you make your offer first? The second thought is that your position sounds reasonable if you never shop around. Do you check Amazon when you're going to make a big purchase? People aren't products, but everyone deserves a good deal - why not the company? – Adam Davis Jan 23 '15 at 15:34
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    @Jivan But to your desired question, "What arguments support my postion of non-negotiation?" I don't have specific arguments, but would suggest that you approach it from a business standpoint. He is trying to control his costs and budget, and get the best deal he can. He doesn't just accept the first cleaning service that offers to clean the office, he doesn't use the first bank that provides the services he requires - he shops around. He's fine with missing out on a few employees if he doesn't feel he's getting a good deal. – Adam Davis Jan 23 '15 at 15:44
  • So you need to couch the argument in terms of how the cost is worth it, or how it ultimately saves money in the long run. The problem, though, is that as you've experienced, it almost always works, and it almost never causes ongoing problems with employees. So you're going to have to come up with an argument that proves he's losing more than a few K per year per employee in dissatisfaction - and that's a tough thing to do. I don't think you'll be able to convince him any other way. – Adam Davis Jan 23 '15 at 15:45

Let's put this into a little perspective.

You decide to sell your used phone. Someone asks how much and you tell them. Then they say great and hand over that exact amount. At first you'll likely think "fantastic". However about 30 minutes later you'll wonder if you should have asked for more.

This is normal behavior. To alleviate the problems that causes there are two paths. The easy one is to just give a counter that is close, but still a bit less than what they asked for. If they accept then they'll feel that they got everything they could. If they insist on the original amount then see the second path below:

The second is to sit back, make a bit of a face and perhaps say something like "That much? Hmm. I'm not sure if we can do that. Give me a bit." If this is in person, walk out of the room and take a few minutes to get a drink. Then come back and agree. If it's on the phone tell them you'll call them back, hang up and wait about 15 minutes. Then call them back and say your boss approved it.

Yes, it's just theater; but it's necessary theater in order to head off any thoughts that they "lost" out on something during the negotiation.

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    +1 for the friendly alternative method of heading off seller's remorse. – Dacio Jan 23 '15 at 18:29
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    It is far better to set your price in advance and simply stick to it with no haggling, negotiation, remorse, pondering or whatnot. Decide for yourself. Done. If everyone did this it would be a much less dramatic and more sensible world. – user37746 Aug 7 '15 at 16:34
  • @nocomprende: Two issues with that. First, it doesn't allow for situations when you are close. Would you want to not get a job (or candidate) over a $100/year difference? What about $500/year? Or is $5000/year too big a hurdle? The grey line is actually good for both sides. The second is that people find drama in anything. If you know this and plan for it then you can shape it. – NotMe Aug 25 '15 at 20:07

Let's start with there are budgets for employees. If you spend too much to hire Mary, then you can't afford to hire another person and you need two people. As a technical manager, you probably do not have control over how much is budgeted whether you think the money is there or not. There are competing needs for that money that you may not be aware of. Would you want to use up all possible promotion and pay raises for employees who are doing well because you overspent the recruiting budget? You do want the electric bill to get paid right? And your salary? Or perhaps you prefer to hire people at top dollar and then not be able to buy decent equipment for them to work on. And maybe the sales team and the HR team and the admin staff would also like to get paid. Hey I'll bet the new receptionist would like 100K too.

Next positions have general salary ranges that are appropriate for the duties. If the local avg for the position is 100K, someone asking for 150K had better be Jon Skeet. So you can't give everyone what they ask for as everyone is not worth what they ask for.

This problem would get worse as soon as the market realizes you will offer whatever they ask for. So in May when you start the policy, the devs are happy to get 110K for the the 100K position. They tell their friends who you offer a job to in July and they ask for 120k. By next year people are going to be asking for 300K. And what about your original guy who got 110K? Are you going to give him a 200K raise because he asked for it? If he knows the last guy hired got that, don't you think he will ask?

Then there is the pyschology of taking away a perceived benefit. Once your greedy new hires have blown your budget to smithereens, you will have to back off on the policy. How happy do you think people will be when they can't just ask for anything they want when you have a reputation for that in the marketplace? Since there is pretty much a 100% chance this isn't going to work out in the long run, you need to consider the impact of stopping doing it.

Next offering anything anyone wants is no guarantee of getting the best people because many people both good and bad are going to leap on that bandwagon. It might make it harder to filter through all the terrible but greedy candidates to find the ones worth paying. You still have to choose who you want and there is a 100% chance that over time you will choose wrong because people can present themselves very well in an interview who can't find actually do the job or who can't get along with the other people. And paying well over market rate for a bad employee puts your own job at risk.

And who are you attracting with this scheme? Your candidates will be the ones most concerned with money which, in my experience, is not even close to an indicator of performance. In fact, the greedier individuals I have worked with are often the worst performers because their focus is on "what's in it for me" and not on what doing their jobs.

To answer the comments:

I am saying that by not negotiating you are going to attract the greediest candidates. And the best companies are not the ones that make the most profit, those are the greedy companies. Being against greed doesn't mean I am against reasonable salaries or reasonable profit. And I assure you that this is not a caricature but what my experience in the workplace tells me would actually happen. The scheme is impractical. However, I would agree that companies don't have to play hardball as a general rule and always offer less than market value and never accept what the person asks for. Of course you should accept a reasonable counteroffer (especially if it at or below market rates or if the person is wildly qualified) or salary proposal. But many companies do that now. But frankly that is not what you proposed to do.

  • +1. You "can afford" to pay one guy 1 millon dollars, but then you're 9 people shorter on your team than if you'd paid them $100k apiece. Companies that think money is free tend to go out of business. – mxyzplk Jan 22 '15 at 22:38
  • I think that turning my point into the caricature of what it could be does not help the debate - let's suppose giving somebody what they want implies that we actually want him and we think that he's worth what he's asking for - my point is against systematic negotiating, not against negotiating a bit when you think some guy is over-asking – Jivan Jan 22 '15 at 22:49
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    Why do you assume the employee is being greedy for asking for a salary that is obviously in the offering range or the company wouldn't allow it? Arbitrarily making a lower offer is a perfect example of greed. Why should I take a pay cut for a new job? – user8365 Jan 22 '15 at 22:51
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    @jeffo right, and doubling down on all this - the "best" companies are the ones that earn the most money. A "great" company makes money. All employees are in the same capitalist system, so why do we on one hand layd companies for making money, but say that employees who want money are greedy? – bharal Jan 22 '15 at 22:57

It could be that you guys are still in startup mode. Some startups have it as strategy to pay as far as the budget allows to hire key talents to get the company to hit mission-critical milestones. Examples: Ship MVP, ship version 1.0, hit break-even, achieve positive cash flow, acquire first 5k customers, etc etc

Non-startups/mature companies on the other hand typically have a "compensation strategy" which determines the pay level as well as employee benefits for all positions (HR folks call this "total comp" or total compensation). It means they "size-up" the work-scope of all positions (carried out by HR and management) and then decide the pay range/band (minimum & maximum salary) for each. This is to ensure there isn't an outsized variance between similarly qualified candidates/incumbents holding jobs of similar size, ie for fairness (this is also part of basic budgeting/workforce planning to know the cost of the entire company). And salary/compensation surveys are used in the process to ensure competitiveness relative to the market/competitors.

The pay range has a midpoint. This is the targeted pay level for incumbents who meet 100% the skills, experience, and performance level required by the position. Most companies exclude the performance-level factor.

With the pay range in perspective, a candidate that meets <80% of your requirements should be paid below the midpoint for you to stick to the company's comp strategy. A candidate that meets your expectations at the interview-level can be paid close to 100% or 100% (depends totally on your confidence level and hiring assessments done).

Finally someone who exceeds requirements can safely justify a pay above the midpoint (or someone who just meets requirements but is expected to deliver above-average performance because of experience or some other factor. Example: Your company needs Facebook-features and this particular candidate has done it like 10 times in the last 2 years, perhaps has worked for Facebook, and knows this stuff like the back of his hand).

If you are still in startup mode, suggest you get management to signoff based on your justification to this: "How critical is this person to the company's business strategy or list of strategic priorities?"

Btw the above is a simplified explanation on compensation, there are many other factors & scenarios that can come into play.

Also:

I tend to give candidates the salary they ask for without trying to negotiate when I think it's in our range and is reasonable,

Measuring whether a candidate's asking-salary falls into your company's pay range for the position is an objective "Yes" or "No" exercise. What do you mean by "I think it's in our range"? Have they approved the pay range? What's the grey area here?

my bosses tend to systematically counter-offer with a lower figure, regardless of the candidate's proposal and regardless of the candidate being a perfect fit for the position.

Do you know where your bosses are coming from? Is there any history in the company? Perhaps this is reflex-response, developed over time, based on past hires. Maybe they've had problems with previous hires, where many were paid the expected salary, and once they got in couldn't deliver as expected. Interview performance don't exactly translate to work performance 100% of the time.

Call it modern-superstition but management behaves this way sometimes.

  • +1 for recognizing that a salary/pay range does not mean "hire everyone if their expectation is somewhere in this range". The whole reason for having a range in the first place is to reward the top performers and/or attract new hires with significant experience. If you start hiring candidates who just barely meet the entry bar with salaries at the top of the range, and more experienced/competent employees find out about this (and they will, eventually), you're likely to find yourself in a morale crisis. Wanting to accept anything in range sounds more like fear of negotiating than strategy. – Aaronaught Jan 24 '15 at 17:02

I don't know what your budget is or what level of salary is really profitable, so they may have a point. On the other hand, it's easy for them to make that statement when they don't have to work with these people on a day-to-day basis. Good people are often currently employed, so they may not be willing to leave without a getting the salary they want. You have to decide if this person is going to continue to ask for things and push the limits or once you get past the salary hurdle, they'll feel better about accepting the job and make this a non-issue.

Inform your boss that you don't intend on giving them everything they ask for which will benefit the company when bonuses and raises come up. You have some legitimate ground to stand on when they ask for too much and you can justify the current situation by stating you gave them what they wanted. They will look greedy and not you.

If the project is a success, no body will think about this, but you are putting yourself at risk in the eyes of your bosses.

I hope your unwillingness to play a childish salary negotiating game pays off for you in the long-run. If they feel that strongly about it, they should cut your salary budget and take on some of the responsibility - yeah right.

  • Thanks for this answer - note that I don't have problems with responsibility - if they want me to do the counter offer, I will - what matters the most to me is the long term effect of this – Jivan Jan 23 '15 at 13:34
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    If your team discovers that you always have to make a lower counter-offer, they're just going to ask for more to compensate for this. I still think it can hurt your relationship with the team in the long-term because salary is too much of an issue for the company. – user8365 Jan 23 '15 at 18:22

I like your question and the way it was positioned. Alhough @Michael addresses the issue in a long term perspective, the key to your problem is that on the table you have a future team which you will need to manage! And motivate!

So I would take the best out of this argument and give the employee what they are asking if:

  • the salary you agree upon is a reasonable amount given the following factors:

A. it is inside your range for the position

B. you keep your overall budget balanced.

C. it is consistent with the labor market in your industry and region.

D. as far as you could evaluate from the recruitment process the guy/girl will provide the value according to the payment (and as it was already said, you will continuously assess that on a regular basis).

E. you also have expressed a clear set of expectations for your employee in exchange for the amount you are paying him.

  • as soon as the work starts you will have a good background for motivating your employee. The money issue being out of the picture you can focus on quality of his work, give him the support and the education he needs, provide the right tools and, in the end, deliver a good end result and become a master in his field. On motivation factors great video from Dan Pink.

  • I assume that during the recruitment process you see great potential of the employee. It is always the case the candidate presents his best image and wants to sell not his actual work, but his best potential work! Give him the salary he/she asks and then you will have the compelling argument of pushing the employee up to his best achievements.

As for you boss (assuming he is a good one!) he wants to hear from you:

  • You will stay inside the budget.

  • You will have a strong committed team with the desired skills. That team will deliver!

  • Doesn't point "D" pretty much override everything else? If you refuse to hire someone of extraordinary competence whom you know will generate 10x their salary in profits within 1 year, just because they're outside your range, or other companies pay less, then you're not a good manager. And when people say (A) "inside your range" they tend to really mean "inside or below your range", which makes the point moot. Ultimately it's about (a) your projected ROI and (b) the scarcity of their job type and talent. – Aaronaught Jan 24 '15 at 17:08
  • I would love to have in my team someone whom "I know" will generate 10x their salary in profits. But how will you know? There is no guarantee for such a candidate, therefore you need to balance your team, your budgets and, as you said, your ROI. Please note that my answer was dedicated to a specific question: should you give the candidate what he/she asks? And - from my answers' perspective says - I would hire the one with extraordinary competence. :) – DcK Jan 26 '15 at 12:57

I think people always unconsciously try to meet other people's expectations. Both when these people's expectations are high and/or positive, but also when they are low and/or negative.

By offering a lower salary than expected, you show your expectation that the person won't be doing a good job. Guess what you will get. You set that new employee up for failure. Now consider the opposite: Imagine after you negotiated everything, you give that person a call where you added another $1000 or $2000 per year without being asked for it, expressing the strong expectation that the person will be worth it. That employee will do their absolute best to justify that extra money without even knowing they do it.

  • This is exactly what I think - do you have real world examples of this practice being successfully applied? – Jivan Jan 26 '15 at 12:28

Problem: " A candidate comes in and asks for 45k. My boss will want to counter-offer with 42k systematically. And if another candidate initially asks for 60k for the same position, then my boss will reply with a 56k counter-offer.".

Question: "Are my arguments valid based on your experience? Are theirs?

What could be some ground-earth-based solid other arguments that I could use to convince them that it's not so stupid to avoid systematic negotiation?".

Your arguments are mostly valid, none of the company's are particularly so.

The owner might be partially correct on these points:

  • "Candidates always ask for a little more than what they expect"
  • "We can't afford it"

It would be a foolish candidate to ask for too little or too much, the chance of it averaging to exactly the perfect value is unlikely; it likely will be a bit more - but if that tiny bit would break the company then there's no sense in working there.

The company may well not be able to afford it, so they should cut back on their requirements. They should be able to look at the resume as well as their own bank account and not annoy people they might need in the future.


I have a hypothesis based on experience (but obviously not a scientific survey) that if you call in everyone who applies to a position advertised without salary and it's 100 people then you get a resulting spread like this:

40% of the interviewees will be knowledgeable about your business and take that experience with them when they walk away. They'll never recommend you or send your company work and they are highly skilled, they could have brought your company to the next level, you might dismiss them but others won't; they'll wield power over you from a distance.

40% of the interviewees will be knowledgeable about your business and take that experience with them when they walk away. They are not quite as experienced or respected as the first group. They'll never recommend you or send your company work and they are highly skilled, and while they might have brought your company to the next level great pay and bonuses would be required. but whether they end up somewhere that sends you extra work and they are influencers in decisions remains to be seen, at your peril.

10% Would be somewhat suitable (in your estimation, for what you're prepared to pay) but you're not hiring 10 people only 1 (in this example). So there's 9 people who might think it was a 'neat place' and they might suggest your company but elsewhere they end up where they are not asked for these opinions and thus really have little effect on your success or failure.

The final 10% will think everything was OK, they'll apply again if not hired this time - assuming they're not good enough to obtain employment elsewhere, so really they either need not or will not reapply. They are unlikely to recommend you where it matters and there's few in this group to save you if they do.

So if you hire 1 person as a result of advertising for a position and 100 respond you've made less than half a dozen friends and over 3 dozen enemies with a half dozen or more actively sinking your ship.

You can only lose by messing with people: messing around with whether you'll advertise, whether you'll pay enough, whether you'll haggle, add extra tasks after they are hired or place them with production negative people, whether you'll 'Helicopter Manager', review for bonuses and raises properly, buy or repair things as needed.

Once you set the course of the ship, into the whirlpool or the sky, there's a tough job trying to change the weather and the course at the same time.


An interview is an opportunity for the employer to show how great the company is, how great it will be, and how great it will be for a successful candidate if they are chosen. If you convince everyone that they'd be better off elsewhere then you're distilling a bad brew - your getting lowballers, slowballers, and no ... well, you know.

When you pick only the fruit off of the ground it dirty and has bugs. Having a knowledgeable Taskmaster to oversee the 'great unwashed' and polish them up leads to the turnovers taking your supposed valued training with them to the competition.


Your question about is it common to systematically counter offer less depends upon where you go. Some places simply pay X dollars and that's it. Some simply counter with a buck or two per hour less (seldom is it a buck more, though I have seen it once). Often the response is that they simply don't pay that much, and that's a fact; nor should they ever advertise for a position that is almost completely based upon the candidates liking an insulting offer.


For experienced candidates push / pull or drag with your teeth your livelihood into the future of success is your job for which you should clearly be well paid - if you just take up space or target the company from a competing company or a supplier the company is losing enough to hire an additional person; losing you to the competition for a couple of decades will cost the company a few employee's pay.

The employee must do what is within the job description, sometimes they must save the day (or the company). The employer must be useful too, they are the one who pays not the employee.

You need to be prepared to hire every qualified and reasonably priced person you interview or send them to the competition. If you insult or annoy powerful people it can never be good - to do that systematically would be suicide.

Distilling the bottom of the cup and serving it to the customer means that the customer won't want to pay much either, most likely going elsewhere next time and obtaining a better result from a better and more efficient team (that happily promotes the fine company that they enjoy working at and providing the best products and services).

Fiddling around is bad advertising.

If the duties are agreed upon and they say it costs X dollars then if that's in the ballpark you can give them your decision within the week (or much sooner).

If everyone seems to want a lot ask what duties you can cut to bring the cost to X dollars (but not a great deal less, assuming we're well above minimum). All too often I've applied for the one advertised job but my resume shows other experience so during the interview they want to double the workload (without offering more than the lowball amount they advertised), that's a walk away (a few times while they were still yaking, left the onlookers giggling).

Some places have a mindset to systematically apply a losing formula that they think works because they think it gets what they want, like drug addiction it usually results in a downspiral without recovery. Candidates can see when everyone seems unhappy and uncaring, or pushy because the boss has forced a disagreeable process upon them and they're the messenger. When it's a hole the most experienced can tell, the inexperienced often fall in.

Sometimes it's tough to tell if the boss's hairbrain schemes will work. I've seen the impossible be done, sometimes many times when it shouldn't have worked.

If that's what is needed for the company to remain viable the owner had best be a true master of the impossible (at least you learn that by working there).

protected by enderland Jan 24 '15 at 20:30

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