10 Rules for Negotiating a Job Offer

This article is a translation. Original: Ten Rules for Negotiating a Job Offer - haseeb qureshi, Cover Photo by Hunters Race on Unsplash

Preface

When my story of how I landed a job at Airbnb went viral, I was startled by how fascinated people were with my negotiation skills. The media portrayed me as some kind of negotiation guru—an ex-poker player who cunningly hustled tech giants into giving him lucrative offers.

This is silly, and while it’s silly in every way, I think the silliest part is this: actually, my negotiation skills are nothing special. There are plenty of job seekers better at negotiating than I am, not to mention professional recruiters or negotiation experts.

The reason for this is that most people simply don’t negotiate, or just go through the motions to feel like they did.

Worse, the advice out there on offer negotiation is useless. Most content is vague and long-winded preaching. Like “make sure you negotiate” and “don't reveal any salary numbers.”

Aside from these two points, the rest is up to you to figure out for the subsequent offer negotiation.

I thought to myself: “Why is there so little actionable advice on job offer negotiation?” I strongly suspect that deep down, many people think negotiating a job offer is weird. Some people can do it, some can’t, and there isn’t a good way to deconstruct the whole negotiation process and techniques so others can learn how to negotiate a job offer.

I can only say that is bullshit. Negotiation is a learnable skill. I don’t believe it’s an elusive or incomprehensible technique, so I’m trying to explain it so everyone knows how to negotiate a job offer.

Here are 3 caveats

I am not a negotiation expert. Some people are truly experts at negotiating. If my advice contradicts theirs, you should assume I am wrong.
Negotiation is hard to generalize completely because it is deeply intertwined with social dynamics and power. Advice for an Asian male negotiating in Silicon Valley might not suit a Black female negotiating in Birmingham. Race, gender, political dynamics, etc., all affect the outcome at the negotiation table. But at the same time, I want to warn everyone not to overemphasize whether these factors truly affect your negotiation, because being too afraid of discrimination leading you to fear negotiation is just as bad as discriminating against others; it is harmful to the entire negotiation process. Maintain a positive mindset for negotiation.
I admit the whole negotiation process is quite stupid. It gives a lot of advantages to people who are naturally good at negotiating. But this is how the real economic system works. Like most collective action problems, we may not be able to eliminate it in the short term. Since that’s the case, we have to adapt to the environment and improve our negotiation skills.

So here is my negotiation guide. I will divide it into two parts. The first part conceptualizes the entire negotiation process, letting you understand how to start the negotiation process and best prepare for your goal of successful negotiation. The second part is advice on the back-and-forth process of negotiation and how to get the offer terms you want.

Let’s get started!

What does “Looking for a job” mean?

In our culture, we call entering the job market “trying to find a job”. This is a really annoying phrase. Implicitly, “finding a job” implies that “jobs” are a resource in this world, and you are trying to acquire a part of these resources. This is completely a regressive concept. Actually, you are selling your labor, and companies in the market are bidding for your labor.

Employment is just reaching a reciprocal transaction in the labor market.

The job market is like any market. The labor market only works well when there is competition. This is the only way to ensure fair and just pricing. Imagine you are a farmer selling watermelons. Would you sell your hard-grown watermelons to the first buyer who agrees to buy them? Would you survey the entire buyer market to see what the best price your watermelons can get (or who the best business partner is), and then make an optimal decision on who to sell the watermelons to?

However, when people discuss the labor market, they only think, “Oh, a company wants to give me a job, I’m finally relieved,” as if having a job itself is a special privilege, and the company is the guardian granting you this right.

Don’t let yourself have this mindset.

Getting a job is just a transaction. It’s a transaction between you and the company exchanging labor for money (and other things or values you value).

This concept sounds abstract, but you absolutely must use this concept and perspective to approach the entire process of negotiating an offer with a company.

The Role of Negotiation

In the process of trying to reach a deal, negotiation is a very normal part of the process. This is also a signal to the company of your competence and seriousness. Companies generally respect candidates who negotiate and negotiate with those who are most attractive to the company (if they don’t, it might be because they have too many choices to pick from).

Common risk: You must, must negotiate, no matter how good or bad you think you are. You will never ruin a relationship by negotiating.

In all my time as an instructor at App Academy, out of hundreds of offer negotiations, only 1 or 2 offers were rescinded during the negotiation process. Usually, it doesn’t happen. If it does, it’s usually because the company thinks the candidate is an unreasonable jerk, or the company is imploding and needs an excuse to cancel the offer.

You might think: “Well, I don’t want to set my expectations too high, and the offer is already great, so I should accept this offer.”

No, go negotiate.

“But this company is small, and…”

No, shut up. Go negotiate.

I will explore in the next section why these objections are nonsense and fundamentally misunderstand the dynamics of hiring. But for now, please trust me, you must negotiate no matter what.

10 Rules of Negotiation

I have tried to summarize negotiation into 10 rules. In order of appearance:

Write everything down
Keep the door open for negotiation
Information is power
Always stay positive
Don’t be the decision-maker
Have alternatives
Give a reason for everything
Motivation isn’t just money
Understand what the company values
Be winnable

I will cover some of these in this article, and the rest will be in another article. I will try to explain the situation of each rule.

So let’s start from the beginning and try to walk through the entire negotiation process with me. Most people only start negotiating after receiving an offer.

The Negotiation Conversation

You just got a call from the company: “Your interview went well. After careful consideration, they really like you. They want to give you an offer. Congratulations!”

Don’t get too excited. The fun has just begun.

Thank your recruiter. Sound excited, but this shouldn’t be too hard. Before diving into the details, try to ask for specific feedback on your interview performance. If they give you feedback, this will help you gauge how much they want you to join their team and let you know what you need to improve for other upcoming interviews.

Now is the time to explore the offer.

Negotiation Rule 1: Write Everything Down

Finally, they will provide you with information about the offer. Write them all down. No matter if they will send you a written offer afterward or not, write down everything they tell you. Even if some things are not related to money, if they are related to the job, write them all down. If they tell you “We are working on migrating the frontend to Angular,” write it down! If they say they have 20 employees, write it down! You need as much information as possible. Without writing it down, you will forget the details of the offer, and these details are important information for your final decision on whether to take this offer.

Different companies might also tell you about equity packages. We will study equity more specifically in the second part, but you must write everything down.

The rule from now on is that everything important you discuss will have some kind of written record. Usually, companies won’t even send you a formal offer until the deal is confirmed, so it is your responsibility to confirm all important details in follow-up emails.

Omitting a lot of discussion details below, remember to record everything. Oh, there’s a joke, time to laugh. Now the recruiter is done, and you act like you’ve finished asking all your questions.

Your recruiter will now say: “So what do you think of this offer?”

This sentence sounds harmless, but your reply is critical. Many things you say might cause you to lose your leverage. This is your first decision point.

A decision point is a crucial moment in negotiation where your interlocutor wants to force you to make a decision. If they successfully tie you to a position, they will close the door to further negotiation.

Of course, “What do you think?” is a subtle nudge, but it is the starting point of trying to get you to commit early. Such a situation leads to “Negotiation Rule 2: Keep the Door Open for Negotiation”.

Negotiation Rule 2: Keep the Door Open for Negotiation

Until you are fully ready to make a wise and well-considered final decision, never give up your power to negotiate.

This means your task is to go through as many decision points as possible without giving up the power to continue negotiating. Many times, your interlocutor will try to guide or trick you into making a decision, or associate you with a decision you haven’t committed to. Before you are truly ready to make a final decision, your mouth must do some Jiu-Jitsu, stay up in the air, leave the battlefield, and make no commitments.

Protect Information

Now there will be an uncomfortable silence, with their “What do you think?” lingering in the air.

If you say “Yes, this sounds great, when do I start?”. You have implied that you accept this offer and completely closed the door to negotiation. This is the first thing your recruiter loves to hear the most, so you can’t say that.

The second thing they love to hear is “Can you do 90k instead of 85k?”. This also closes the door to the entire negotiation, but for different and subtle reasons. This is also the number one reason why most people are bad at negotiating.

Negotiation Rule 3: Information is Power

To protect your power in negotiation, you must protect information as much as possible.

Companies won’t let you know what they really think, won’t let you know what their offer range is, and won’t let you know how much they paid previous candidates evaluated with similar work experience. They deliberately obscure the offer negotiation, but they want your offer details to be clear and specific.

Companies want to be bidders in a secret auction in the labor market. Unlike other bidding companies, they really want to know exactly how high the bids from all other bidders are, and then they will naturally use this information openly, mostly wanting to bid just 1 cent more than the second-highest bidder.

Yes, don’t let that happen, screw you.

This is a silent auction. To keep it silent, you must protect your own information.

In most cases, because the employer actually doesn’t know what you are thinking, this is the only reason you have negotiation power.

They might not know how good your other offers are, or how much you made in your last job, or how you weigh salary versus equity, or even how rational you are as a decision-maker. Most importantly, you want them to be unsure what it takes to sign you.

When you say “Can you do 90k instead of 85k?”, you have told them what conditions you need to be willing to sign. The power of the entire negotiation is taken back, the secret auction begins, and they will bid 90K (or more likely 87K) because they know there is almost no risk in doing so, as you might accept.

What if you are the type who wouldn’t consider an offer below 110K? Or the type who wouldn’t consider below 120K? If so, you wouldn’t ask for 90K. If they provided such an offer to negotiate with you, you would tell them not to waste your time.

By remaining silent, they actually don’t know which type of person you are. In their view, you could be any of these three.

A corollary to this rule is that you shouldn’t reveal to the company what you are currently making. There might be some exceptions where you have to reveal a bit of what you are considering, but based on this guideline, you should naturally mention that you are considering the total value of the entire offer package (including bonuses, stock options, promotion opportunities… etc.) and always mention things like “X, Y, Z… blabla” are all within your scope of consideration. I will seriously consider whether the role I take in my next career step allows for more progress and betterment.

Companies might ask for your current compensation range at different stages of the process, some before they interview you, some after they decide to give you an offer. But please be aware of this and protect your information.

Therefore regarding this offer, do not ask for more “money”, “equity”, or “anything like that”. Do not comment on any offer details until they have explained the entire offer details clearly.

Give no information, keep your negotiation power.

You can say this instead:

Yes, [COMPANY_NAME] sounds great! I also feel I’m a good fit for your company, and I’m very happy you agreed to give me an offer. I am currently discussing offer details with other companies as well. Until all offer details are discussed and I have enough information to make a decision, I don’t have much to comment on your offer, but I believe we can find an offer package we are both satisfied with because I really want to be part of your team.

You must think like a watermelon farmer. This offer is just the first customer stopping in front of your watermelons, glancing briefly at your harvested crops, and then telling you “I’ll buy these crops for $2” - just a merchant.

Cool! The market is huge. You must have patience to sell your hard-harvested crops. After all, you are a watermelon farmer. You just need to smile and tell them you will remember their proposal. :)

This is a very important thing: Always maintain a clear positive attitude.

Negotiation Rule 4: Always Stay Positive

Importance of Positivity

Maintaining a positive mindset is the 4th rule of negotiation. Even if the offer is terrible, it is very important to stay positive and excited about the company because your excitement is one of the most valuable assets in negotiation.

Companies give you an offer because they think if they pay you, you will work hard for them. But if you lose enthusiasm for the company during the interview process, they will lose confidence in getting you and be unsure how long you will stay there. This situation reduces the attractiveness of investing in you. Remember, you are the product! If you become less excited, then the product you are selling actually loses value.

Imagine you are negotiating with someone to buy your watermelons, but the negotiation drags on for so long that when you reach an agreement, your watermelons have spoiled.

Companies are terrified of this. They don’t want their candidates to perform poorly in negotiations. Therefore, they hire professional recruiters to manage the entire negotiation recruitment process and ensure they maintain a friendly relationship with candidates. You and the recruiter have the same interest goals in recruitment. If a company feels you have gone bad, they are suddenly less willing to pay for your offer.

Therefore, no matter what happens in the negotiation, give the company this impression:

You still like the company.
You are still excited about working there, even if the numbers, money, or timing are not right.

Generally, the most persuasive signal to a company is constantly reiterating that you love the mission given by the job, the team, or the problem they are solving, and really want to see things resolved.

Don’t Be the Decision-Maker

You can now say:

I will look into some details of the offer again and discuss it with my family / friends / significant other. If I have any questions, I will contact you. Thank you so much for sharing this good news with me, let’s keep in touch!

Therefore, not only ending the conversation but also taking the initiative in the entire negotiation communication. Note that there is an important move here, you are trying to bring in other decision-makers (family / friends / significant other).

Negotiation Rule 5: Don’t Be the Decision-Maker

Even if you don’t particularly care what your friends/family/husband/mother think, as long as you mention them, you are no longer the only person the recruiter needs to win over. It is pointless for them to try to bully and intimidate you; the real decision-maker is beyond their control.

This is a classic technique in customer support and rescue. It’s never the fault of the person answering the phone; they are just poor souls doing their job. It’s not their decision. This helps alleviate tension and gives them better control of the situation.

If they are not the final decision-maker, it is hard to pressure them, so use this to your advantage.

Okay! We have the first offer. Send a follow-up email after the discussion ends. Confirm all details you discussed with the recruiter in the email so you have a written record. Just say at the end of the letter: “Just want to confirm all my details are correct.”

The next step is to use it to get other offers and find the best trade we can find in the job market.

Getting Other Offers

It turns out it doesn’t matter where your first offer comes from or even how much they offer. As long as you have an offer in hand, the entire negotiation engine starts running.

If you are already discussing cooperation details with other companies (if you are doing it right, you should be), you should proactively contact them and let them know you just received an offer. Try to build their tension. Whether you know the final expiration date of the offer or not, all offers will expire at some point, so make full use of this.

Hello Mr. / Mrs, I just want to update you on my current progress. I just received an offer from [Company Name], which is very attractive to me. I’m really still excited about the opportunity to join your company, but my time is now compressed. Is there anything we can do to speed up the process of discussing the offer with your company?

Should you specifically mention the name of the company giving you the offer? It depends. If it is a well-known company or competitor, then definitely mention it. If it is an unknown or unsexy company, you should just say you received an offer. If this offer is expiring soon, you should also mention this.

Either way, please send such a letter to every company you are negotiating an offer with. No matter how hopeless or pointless you think your application is, you want to send this signal to everyone in the market considering giving you an offer.

Secondly, if you have other companies you want to apply to (whether through internal referral or self-application), or even companies you have already applied to but haven’t heard back from, I would also send a similar letter.

So why do this? Isn’t this tacky, annoying, or even desperate?

None of the above. This is the oldest method in history to stimulate the market, showing limited supply and creating pressure. Demand begets demand. Not every company will respond to this, but many will.

Is it stupid for companies to respond to this?

Why Companies Care About Other Offers

When I wrote my own job hunting story, I mentioned how the Google job offer made companies turn around and speed up my communication channels with them. Many commenters lamented the fickleness of these companies. If Uber or Twitch were unwilling to look at me until Google spoke to me, what does that say about their hiring process? What are they reasonably evaluating, if anything?

I think this kind of comment response is completely backward. The behavior of tech companies here is actually very rational. You just need to understand it.

First, you must understand what the company’s goal is. The company’s goal is to hire people who can be high-performing employees and generate more value than cost. How do you know who will do this? Well, you can’t be sure without actually hiring them, but there are some signals that represent you. Pedigree is the strongest signal. If they did it at other companies, they might do it at your company. If trusted people within the organization can vouch for them, this is usually also a strong signal.

But it turns out that almost everything else is a weak signal. Weak, because it is not very reliable. Think about it, interviews are long, sweaty, uncomfortable things that only superficially look like actual work. They are weird and can’t tell you if a person will be good at their job. There is no way to solve this problem. There are some stronger signals, like putting someone in a contract position for a week or two, but excellent candidates won’t consider such contracts. Therefore, candidates as a whole have actually forced companies to bear almost all the hiring risk.

The truth is, knowing someone passed your interview doesn’t say whether they will be a good employee. It’s like knowing nothing about a student’s SAT scores, just not having much information to help corroborate.

No one has solved this hiring problem. Google can’t, no one else can either.

This is exactly why it is reasonable for companies to care if you have received other offers. They care about your offers because every company knows their hiring process is annoying, and most other companies’ hiring processes are also annoying. But a candidate with multiple offers means they have multiple weak signals in their favor. Combined, these weak signals converge into a much stronger signal than any interview. It’s like knowing a student has high SAT and GPA scores and won various scholarships. Of course, they could still be an idiot, but the chance of being an idiot becomes lower.

This is not to say that companies’ reactions to these signals grow proportionally, or that they won’t overestimate credentials and brands. They do, but caring if you have other offers and evaluating you accordingly is completely rational.

So this is to tell other companies you have received an offer, giving them more signals, letting them know you are a valuable and compelling candidate, and understanding why this changes their mind about interviewing you.

As you continue interviewing, remember to constantly practice your interview skills. The most important determinant of the final offer will be the number and strength of the offers you receive.

Some Advice on Timing

You want to be strategic about the timing of offers. Generally, you should try to start interviewing at big companies earlier. Their processes are slower, and their offer negotiation times are longer (which means they give you more time to make a decision), while startups are the opposite.

Your goal should be to overlap as many offers as possible. This will maximize your negotiation leverage.

When you receive an offer, usually the first thing you should ask for is more time to make a decision. Especially with your first offer, more time to consider the offer is by far the most valuable thing you can ask for. It is time for you to start with other companies and finally get the best offer, so be prepared to fight for time.

How to Handle Exploding Offers

Oh boy, exploding offers are offers that expire within 24-72 hours. You won’t see many exploding offers at big companies, but they are becoming increasingly common in startups and mid-sized companies.

Exploding offers suck, and I disdain this practice like most people. But I do understand that exploding offers are a natural weapon for employers against a strong skilled labor market. Companies know exactly what they are doing with exploding offers; they use fear and limit your ability to seek bargains.

In a sense, if startups have more trouble attracting and securing talent, it shouldn’t be surprising they resort to this. What I don’t like is their dishonesty. Employers will usually say: “If you need more time than this, it means you are not the kind of person we are looking for.”

No need to feel guilty about this crap. They do this just to increase their chances of closing candidates negotiation. Needing more than 3 days to make a life decision is nothing other than being thoughtful.

So, what should you do if you receive an exploding offer?

Exploding offers are the curse of your ability to effectively navigate the labor market. Therefore, there is only one thing to do. Unless the offer deadline is extended, treat this offer as non-existent.

To be clear, if the offer deadline explodes, that offer is useless to you.

Conversation example:

I have a concern. You mentioned this offer expires in 48 hours. I’m afraid this doesn’t work for me at all. I cannot make a decision on this offer within 48 hours. I am currently wrapping up my interview process at several other companies, which might take me another week or so. So I need more time to make a wise decision.

If they counter that this is the best they can do, then politely reply:

That is really unfortunate. I like [Company Name] and am very excited about the opportunity to join the team, but as I said, I cannot consider this offer. A 48-hour consideration time is too unreasonable. The next company I join will be a major life decision for me, and I take my commitments very seriously. I also need to consult my external decision-makers. In such a short time, I cannot make a decision I am satisfied with.

At this point, almost any company will concede. If they insist, don’t be afraid to just give up this offer. (They likely won’t let this happen and will come grab you as you walk out the door. But if they don’t, honestly, screw them.)

During my job search, I received several exploding offers. Every time, I basically did this. Every offer deadline was immediately extended, becoming more reasonable, sometimes even up to weeks.

I want to emphasize, lest I be misunderstood here, I don’t mean silently letting an exploding offer expire and assuming everything will be fine and they will still hire you. They won’t. For an exploding offer to be a credible weapon, the company must be credible in enforcing these offers. I am saying to point out explicitly that this is a problem when they present the offer.

Don’t let companies bully you into giving up your negotiation power.

Negotiation Mindset

Before we get into the actual negotiation back-and-forth, I want to confirm the mindset you should have as a negotiator. This negotiation mindset applies not only to how you conduct negotiation conversations but also to how you view companies.

Don’t fall into the trap of evaluating companies from only one dimension. This means don’t evaluate companies solely based on salary, equity, or even fame. These are important dimensions, but cultural fit, work challenges, learning potential, future career options, quality of life, growth potential, and overall happiness are also to be considered. There is no saying which of these dimensions is definitely more important than another. Someone telling you “Only choose the place where you think you’ll be happiest” and telling you “Only choose the place offering the most money” are both simplifications. Actually, all these dimensions are important, and your decision should consider multiple dimensions.

When you explore different companies, be open to surprises.

Equally important is to understand that companies also don’t all value the dimensions you think are important. That is, different companies are really looking for people with different skills. In some companies, your value will be lower. Even in peer companies, this is true, especially if you have specialized skills.

The more companies you talk to, the more likely you are to find a company that values you more than others. It is very likely that here you will be able to negotiate the best offer. You might be surprised which company this actually is.

Keep an open mind and remember that job hunting is a two-way process.

In this process, one of the most valuable things you can do for yourself is to genuinely try to understand the employer’s thoughts and their motivations. Understanding your interlocutor requires being extremely important in negotiation. We will explore this deeply in the next article.

But most importantly I want to emphasize: Be curious about the company.

Try to understand why employers think the way they do, empathize with them, care about what they want, and help them try to get it. Adopting this mindset will make you a stronger negotiator, and consequently, you will become a better employee and team member.

Okay. This is what we are going to do today. In the next article, I will introduce the last five rules of negotiation. I will also introduce the actual negotiation back-and-forth process, how to ask for what you want, how to strengthen the offer, and how to eliminate the tricks companies try to pull on you. There is more content on negotiation theory, which I will really discuss in depth.

If you find this article useful, please share it! And follow me on Twitter.

You can see the second article here

Second article translation: How not to bomb your offer negotiation

Haseeb