How much is too much? (Salary negotiations)

[IndyPendent]

Hey all

I work in a very specialized sub industry of technology, and at a conference where I was speaking I was contacted by a person who had a few open positions. They referred me internally, as the position was right up my alley. I just had the initial round of interviews today.

They went swimmingly, and the recruiter asked me what kind of salary I was looking for.

Initially, I told them I would have to go to back and do research, as I wasn't actually actively looking for a new position. I upfront told them that I would need to look at cost-of-living differences. 

After researching, I emailed the recruiter that I would need both a baseline increase of 35%, meaning that my non-cost-of-living adjusted salary would need to increase by 35%, and I would need a cost-of-living adjustment to move from the Midwest to southern LA. However, when I did the math, this was an increase of over 150% of what I'm making now. I don't make insignificant money, so the total went into astronomical range.

I'm now worried that I may have blown it by sending that number over to the recruiter, even though when I plot the calculations out it seems alright.

Thoughts?


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[Tjat]

Assuming out adjustments were accurate I see no fault on your end, particularly as you weren't looking for a new job. If the new company likes you, but think your number is too high, they will likely come back with a different number. That's just negotiation, I wouldn't worry that you mixed the whole thing. Though if you did, it's not like you can recall your figure.

[JLee]

Given that you weren't looking in the first place, what do you have to lose by aiming high? I wouldn't worry about it.

[use2betrix]

Yep, just ask what you'd expect. If it's too much then no loss. You wouldn't want to leave your job for less than what you'd want anyways?

[IndyPendent]

Good to hear such an agreed response. I just can't imagine them actually being willing to pay that much. Then again, a few contractors I knew about 10 years ago were pulling down similar money. We will see!


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[MoonLiteNite]

Worse case is he says "no"
If you really want the job, then work with him and explain your reasons and accept a slighter lower pay maybe

[chasesfish]

I think salary is something you vet out quickly after confirming there is mutual interest.

You're in business for yourself and they're in business for their company and each party has to make decisions that are in their best interest.  Figuring out if your requirements make sense based on their need is important early.

[IndyPendent]

Well I didn't insult them, apparently. They came back not yet with a number, but with two statements:

1) You're "way off" with your COL adjustment numbers

2) This isn't a <level> position, that's a salary for <level>.

But I do have a second interview tomorrow.


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[Axecleaver]

I've seen this strategy used before - quoting a ridiculous number to get the other side to reveal their anchor. Congrats! It worked for you! It's a risky strategy because you deployed it very early in the conversation. Ideally it's used after all interviews are complete.

Now you can ask what they budget for <level> position, and work your way up from there.

The correct move was not to reveal your salary requirements, since they approached you for the job. You tell them you're very happy where you are, but it never hurts to have a conversation. Then wait for them to make an offer.

Keep us updated on the outcome.

[TheAnonOne]

I've seen this strategy used before - quoting a ridiculous number to get the other side to reveal their anchor. Congrats! It worked for you! It's a risky strategy because you deployed it very early in the conversation. Ideally it's used after all interviews are complete.

Now you can ask what they budget for <level> position, and work your way up from there.

The correct move was not to reveal your salary requirements, since they approached you for the job. You tell them you're very happy where you are, but it never hurts to have a conversation. Then wait for them to make an offer.

Keep us updated on the outcome.

Eh, go for the gold.

I have had MANY instances like this where my number was "WAY OFF" but apparently they can still figure it out in the end...

It partially depends on where you are now. I am near the upper end of the pay range for my industry (in my area) so asking for ALOT more is probably a no-go now. Though if your mid-level or w/e you can ask for quite a bump.

[IndyPendent]

Well, I can see how these negotiations are going to go (provided my interviews continue going well): it's going to devolve into a polite business negotiations over whose COL calculators are more accurate.

Option 1: I take their data source for it (Mercer, apparently, as in "COL mercenary for hire to depress wages to benefit companies".) Apparently it's only 16% more expensive to live in Orange County, CA as compared to Indianapolis. :eyeroll:

Option 2: I use their data source as one of many data points for COL calculations, and average all of them together to get a pretty realistic sense for what the adjustment should be. I then stick firm to my own calculations and point to the data.

Obviously, I'm going with option 2, but I think we may come to an impasse. The recruiter seemed shocked that I wouldn't just take their word for it and started mumbling how "in California they structure loans differently to make housing more affordable." Oh gee, thanks--I'll pay a boatload more money but they'll extend my payments so you can pay me less?

 

[Tjat]

If they are gung ho on Mercer, I think your ultimate response will be thanks but no thanks. Indy to Orange County would be closer to 50%

The 16% could very well be a cost of wage difference however

[Capsu78]

My approach would have been to show them what you make, including any unvested equity compensation if applicable- RSU's etc and say make me an offer.  Your "hand" is based on "sell me on why I should go from being a home owner in the Midwest to a renter in Orange County?   My former tech company didn't have an answer that would have brought me back to CA. Their data points are their data points, not yours- make them do the selling.

Someone very close to me is on their 11th interview, meeting, Skype call with a company that approached them, and current compensation hasn't even been brought up yet!  I advised him to say on the next interview that this is the last interview we can have before I feel obligated to send you an invoice for billable hours!

[IndyPendent]

My approach would have been to show them what you make, including any unvested equity compensation if applicable- RSU's etc and say make me an offer.  Your "hand" is based on "sell me on why I should go from being a home owner in the Midwest to a renter in Orange County?   My former tech company didn't have an answer that would have brought me back to CA. Their data points are their data points, not yours- make them do the selling.

This is basically my strategy. My house is paid off, you approached me, you called me 4 times in 3 days, and by the way you came to this conference to hear me speak because I'm the expert in the area you're trying to hire me for.

I feel like I'm in a strong position. I like my job currently and have no trouble staying put.

[erutio]

I'm a professor at a public university and I coach our upcoming grads on contract negotiations each year. 
Your approach of telling what you would need to move to the position is great, especially because you laid out concrete reasons for the higher salary. 
I'm not sure if you've been communicating with the recruiter or who will ultimately be your "boss", but depending on the size of the company, the recruiter may have very little control over what package they can initially offer you.  Recruiters and even HR are usually strictly limited to initial target offer.  The concessions to you during the negotiations will usually have to come from your boss (your direct report, division head, etc) or the business manager of the division (if the company is large enough). 
Being a strong advocate for yourself and being upfront is a great strategy and works for many people.  So many of my young grads are afraid or uncomfortable with laying it out there what they want, and end up selling themselves short. 

Job negotiations can be emotional for the employee but you must remember it is just business, especially for the employer.  As long as you negotiate in good faith, it is very rare an applicant to blow it or insult the hiring company.  The key is negotiating in good faith though.  One warning I would give is that you mentioned that you weren't even looking for the new job, they approached you.  However, if the company came back to you with the terms and salary that you asked for, and you still turned them down, that may be the one situation that may insult someone.  I tell my grads that it is perfectly ok to interview at many places and field many offers, but you ask yourself once you make a counteroffer and the company gives you everything you asked for, are you ready to accept the offer?

[IndyPendent]

I'm a professor at a public university and I coach our upcoming grads on contract negotiations each year. 
Your approach of telling what you would need to move to the position is great, especially because you laid out concrete reasons for the higher salary. 
I'm not sure if you've been communicating with the recruiter or who will ultimately be your "boss", but depending on the size of the company, the recruiter may have very little control over what package they can initially offer you.  Recruiters and even HR are usually strictly limited to initial target offer.  The concessions to you during the negotiations will usually have to come from your boss (your direct report, division head, etc) or the business manager of the division (if the company is large enough). 
Being a strong advocate for yourself and being upfront is a great strategy and works for many people.  So many of my young grads are afraid or uncomfortable with laying it out there what they want, and end up selling themselves short. 

Job negotiations can be emotional for the employee but you must remember it is just business, especially for the employer.  As long as you negotiate in good faith, it is very rare an applicant to blow it or insult the hiring company.  The key is negotiating in good faith though.  One warning I would give is that you mentioned that you weren't even looking for the new job, they approached you.  However, if the company came back to you with the terms and salary that you asked for, and you still turned them down, that may be the one situation that may insult someone.  I tell my grads that it is perfectly ok to interview at many places and field many offers, but you ask yourself once you make a counteroffer and the company gives you everything you asked for, are you ready to accept the offer?

Good stuff, and a couple comments:

1) I've been communicating with the recruiter, who is moving on to a new contract. So some of these conversations may end up being repeated.

2) The truthful answer is even if they met every request I had from a salary point, I'd still be interested in giving my current employer the opportunity to match. I like my job a lot, the role is basically everything I could ask for short of FI, I'm satisfied with my work/life balance, and my family is in Indy. If my current employer didn't match and I was offered the ludicrous amount I'm asking for, I'd most likely go (with a 5 year horizon in mind). But there's still the chance that either my wife or I would get cold feet.

3) I'm definitely interviewing in good faith--even if the most I can muster is "I don't know for sure yet". I have been using language that is intentional, e.g. "I believe there is a scenario where we move forward", "I'm interested in finding a solution that works for both of us", "I agree that my requests sound high, but here are my reasons." I hope that even in the event that this doesn't work out they know I'm attempting to approach it with respect.

[Goldielocks]

You are in luck that you communicated your number to the recruiter, who probably softened up the wording around it when he or she passed it on, and let you know directly that you are way off.

The recruiter wants to make this happen, and will help smooth over this type of blunder (if it was a blunder).