Offer Negotiation SecretsMar 06, 2023
Negotiation is truly an art, and learning to master it can be quite stressful.
After all, no one likes to talk about money or come off as ungrateful for an offer. There is also a lot of uncertainty involved in the negotiation process which makes many people uncomfortable. In addition, feeling that a job could be on the line does little to lessen the stress of negotiating.
However, despite the stress involved, one of the most popular requests for content I get is to talk more specifically about how to negotiate for better compensation once you’ve received a data science job offer.
I’m glad that people are asking this question! Although it can be scary and tricky, negotiating well is a key part of any career in the tech industry. If done correctly, it can add thousands of dollars to your annual compensation.
That’s why in this post I’m going to cover three tips for negotiating an offer. If you have no idea how to negotiate or are worried about how negotiating may make you appear to a future employer, these tips will help you negotiate in a respectful manner that also gets results. I’ve even tested these myself and was able to increase my data science offer by 80k!
(You can also get this information from my Youtube video on the subject if you prefer.)
Now, let’s uncover some of the mysteries in this process and learn how to negotiate effectively.
The More Offers You Have, the Better
Before we get into the tips, we should note that there is something that can affect how you negotiate - whether you have competing offers.
While this should make little difference, in reality, those that have other offers will find themselves in a much stronger negotiating position for a number of reasons.
With multiple offers you can play them off one another, hopefully in a way that elicits the best possible offer. Having an offer already can also increase a candidate's confidence which can prove very valuable for negotiating.
In this article, we will look at both scenarios and how they can impact using the tips below.
Keep Your Info to Yourself
In any negotiation, keeping what you know to yourself can be crucial. This is especially true when negotiating your final salary, and that’s why keeping info to yourself is our first tip.
What do I mean by this? Let’s say a company has offered you a 100k salary. You then respond by asking for 110k. This would be a grave mistake. But why?
Once the other person gets a number from you, they now know what they have to offer to get you. In short, you’ve given away all your negotiating leverage. If they know you’re happy at 110k, they are not going to offer you more.
You may have thought you were just giving them a number you felt comfortable with, but you’ve also substantially weakened your negotiating position at the same time. Keeping the other person guessing is key for effective negotiation.
So that’s why sharing information can destroy your leverage, but just how much should you keep to yourself? Here are some more examples of questions you should not answer:
- Will you be happy with a $100,000 salary?
- Will only $150,000+ satisfy you?
- What do your other offers look like?
- What were you making at your last job?
The bottom line is that giving away seemingly innocent information, such as your last salary or how many offers you have, reveals information that renders the negotiation basically over.
Remember that leverage comes from uncertainty over what it will take to bring you on board. Once you reveal your price, it’s unlikely that you will be able to improve your situation or get a substantially better offer.
Dealing With Pressure Tactics During Negotiations
Now you know that you should not reveal information, but what should you do if your negotiating partner is really turning up the heat on you? What if they are pressuring you into telling them your price?
Do not give them what they want. You can deflect if necessary by saying you need to hear other offers before you can tell them what they want to know.
The key here is to stay strong and don’t break while also being as polite as possible. You don’t want to cave, but you also don’t want to seem rude. Saying something like “I expect to hear back from other companies soon, and I cannot say until I do” is a respectful way to deny revealing information without being rude or aggressive.
With all that being said, there is one important area where it may pay to divulge information, and that is if you have multiple offers on the table. Having multiple offers is a good thing to reveal because it demonstrates that you are desired by other employers and also have other options. By letting this info slip during negotiations you are only likely to strengthen your negotiation position and improve the offers you receive.
In short, by being as inscrutable as possible (except for letting slip that you have multiple offers), you will have shifted the bulk of the burden onto your negotiating partner to see what will make you happy—and the resulting offer may just surprise you. I was pretty amazed when my negotiation was able to add nearly $80k to one of my offers.
Say You Need to “Consult” With Others
The next tip will help you gain something that is always useful in negotiations - time.
Saying that you need to consult with someone else before you can make a final decision (even if you don’t have anyone to actually consult with) gives you more time in which you can consider the offer while protecting you from intimidation and lowering any tension.
Just how does this work though?
Customer service representatives use this strategy all the time because it allows the blame for a nondecision to be placed on a third party. When you say you have to consult with someone else, you put the responsibility on someone that your negotiating partner cannot reach. There is now no reason to try to force you to make a decision using pressure tactics or intimidation.
What that means for you is that you now have more time to consider things in a pressure-free environment and try to get more offers.
If you’ve never used this tactic before, you may be wondering exactly what you should say. The idea here is that there is someone else whose input will impact your final decision and whom you therefore must consult before reaching a final decision.
This other person could be a partner or other family member. It’s very reasonable to suggest that you need to consult with the people closest to you before making such a life-altering decision as starting a new job, which is why companies are not going to think you’re rude for asking for time to do this.
And no, you don’t actually need to have discussions with another person! If there is someone you want to talk to that’s great, but if not, just acting like there is vital input that you need to hear is a safe delay tactic.
This tip is even more valuable if you have multiple offers, as you can use the time and space that you’ve created to counteroffer and see who can improve their package the most. If you don’t have multiple offers, this tip may give you time to receive any you are waiting for.
Now, if you try this tactic, you could be told that a deal has to be struck immediately or risks going away. If this happens, don’t panic but consider it simply a negotiating ploy. This is a common tactic used during any negotiation to make it seem like things are time-sensitive. In reality, no deal is likely to be squashed if you ask for time to talk it over with other stakeholders.
If by some chance the offer does go away before you can fully consider it, that likely wasn’t an offer that would have been right for you in the first place.
Know Your Goals, Set a Deadline
The last tip we will go over can be a great help in bringing negotiations to an end. It has two distinct parts, knowing your goals and setting a deadline. Let’s look at knowing your goals first.
Setting an end goal is definitely important to know if you’ve achieved what you set out to when negotiations began.
For example, if you want to increase the value of your compensation based on the data points from levels.fyi, set that as your goal, and don’t quit until you get what you want.
On the other side, your goal will also help you to quit while you’re ahead. Some job candidates can struggle with knowing when to stop and will continue to chase ever-larger packages—often to no avail. With an end goal, you will know when it’s time to stop and take the offer.
Setting a goal to end negotiations is often not enough though. You should also set a deadline. This can either be a point when you want to have decided by, or when you will start cutting off negotiations.
Either way, using a deadline as a motivating factor can be a great way to cut through negotiating stalemates. Deadlines add a sense of urgency that can force you to take action and make something happen so that you don’t stay in the negotiating phase forever, ensuring you make a decision as timely manner.
Deadlines can even be beneficial for people who make hasty decisions. With a deadline, you know exactly how much time you have and that gives you the breathing space to not jump at the first offer.
A final thing to note here is that whether or not you have an offer already will help you when setting both deadlines and goals. If you have pending offers, a deadline often becomes quite clear. Likewise, if an offer on the table exceeds all of your goals, you’ll either be forced to recognize its worth and accept it or perhaps reassess what your goals should be.
Negotiate for What You’re Worth!
Before we end, there are a couple of other points I want to make about negotiations.
First—despite what some may tell you—there is always room for negotiation. Don’t let anyone tell you that there is no chance to negotiate. If both parties are truly interested, negotiation should always be an option.
Second, the more offers you have the more power you have in negotiations. This makes sense as you can usually strengthen offers by playing them off each other. More offers give you more leverage.
Finally, know that negotiating doesn’t have to be hard! As long as you remember to keep what you know to yourself, say you have to check offers out with stakeholders and set your end goals and timeline, negotiating can be less stressful and more effective.