The average engineer has, what, two dozen jobs in their lifetime? Compensation has a compounding effect over your career--$10k left on the table early in your career can easily become a million lost later in your career. That’s why I went to my good friend Josh Doody to get advice on effectively negotiating job offers.
About the Guest
Josh is a salary negotiation coach who helps experienced software developers negotiate their job offers and the author of Fearless Salary Negotiation: A step-by-step guide to getting paid what you're worth.
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Mike Julian: Hi, folks. I'm Mike Julian, your host for the Real World DevOps
podcast. My guest this week is Josh Doody, a good friend of mine and who is also a salary negotiation coach for engineers and author of the book, the Fearless Salary Negotiation
. His articles have appeared in glassdoor.com and any number of other locations and he's amusingly also been interviewed live on the BBC, which was kind of cool when I found out about that. Josh, I'm just imagining BBC calling you and you're like, "Oh, shit. I should probably put some pants on."
Josh Doody: I already had pants on. I was at Starbucks and I started tweeting back and forth with whoever the producer was, and then within 45 minutes I was live on the air on international TV on the BBC being interviewed from my office. So that was interesting.
Mike Julian: Yeah, that's pretty cool. Yeah. I don't know too many people that say they've been interviewed by BBC live. So that's pretty awesome.
Josh Doody: That's a feather in my cap for sure.
Mike Julian: Absolutely.
Josh Doody: It was a pretty awesome, scary experience, and I'm really glad that it happened as quickly as it did because I think if I had time to think about the fact that that was going to happen I could've gotten nervous, but I didn't have time to get nervous. I literally was just scrambling to get some kind of lighting in my office and make sure my camera was working. So I spent 20 minutes on logistics and then I was on live international television being interviewed on BBC, and then it was over. Three minutes later it was done.
Mike Julian: That's a lot of work for such a short little time. So I want to talk to you today about salary negotiation, job negotiation, asking for raises, this whole gamut. But where I want to start is everyone's favorite topics. Everyone loves a good train wreck. So what's your favorite negotiation went totally sideways story?
Josh Doody: Well, I was thinking about this before we talked in case you asked about it, and I'm not sure I can tell you my favorite one because the only way I could tell it is if I censored so many pieces of it that it would be boring and meaningless to everyone. But the CliffsNotes for that one was it was a company that we have all heard of and use their services. They’re currently a private company. And just throughout the negotiation it was one red flag after another of my client trying to negotiate and then the company freaking out when he questions the value of their equity, which they're a private, so it's just monopoly money basically. And just one thing after another where the recruiter was just basically losing his mind, and eventually my client, even though this company had offered him more money, decided just to stay put. He was like, “You know what? I'm not going to go work there because if they're treating me like that right now I can't imagine what it's like to work there."
Josh Doody: But there's another one that can be a little bit less vague. It was a similar story, but this is a nice little way to kind of kill two birds with one stone because people like to ask, “Well, what happens if my job offer gets rescinded when I negotiate?” And my answer to that is I always tell my clients, I say ... They're like, "If we do what you're telling me to do are they going to rescind the offer? Are they're going to get mad at me?" I say, "Listen, I can't tell you that there's a 0% chance that will happen. It's greater than zero, but it's so small I can't even see it like on the graph." But it does happen occasionally. I think I've had I want to say two, maybe three clients in almost three and a half years that this has happened to.
Josh Doody: But I had a client who was going to work for an engineering firm. He was an experienced mechanical engineer. He got a pretty compelling offer from this company, but he knew that there was room to negotiate just based on market value research and some other kind of rudimentary stuff. And up to this point, there had been a couple of interesting sort of interactions with the recruiter he was working with. This is a smaller firm and so it was one of those things where the recruiter had done some weird things like kind of semi-unprofessional replies in email or that kind of thing where normally would have been kind of red flags, but I was like, "You know what? This is a really small firm. They probably don't have a lot of professional recruiters if any in house. This could just be a generic HR person who's also responsible for hiring. They don't seem to have outsourced that. So I wouldn't worry about it."
Josh Doody: And then something else would happen, a weird conversation with the hiring manager. It's weird. But they're small firm and they seem like good people. I could see their website. It looks like they're doing professional work. And then eventually we got to the point where the recruiter just would not let off the gas in terms of asking for salary expectations and stuff like that. And so eventually my client uses the, "Well, you keep asking me for my salary expectations, but why don't you tell me what the range is that you're willing to pay for the role and I'll tell you if that's in the ballpark." Which is a nice little kind of judo move to use. And so then you're getting a range and you're able to tell them, "It's in the ballpark," which is not necessarily committing to that range, but it gets you past that question. And so they had given him a range of salaries and then eventually they came back and finally said, "Alright. We're ready to make you this offer." This is after again we'd had a few red lights. And the offer was below the range. And I was like, "Well, that's weird." And so-
Mike Julian: That is weird.
Josh Doody: So obviously we're going to negotiate this because they told us the range is higher than what they offered. And it's like, well, maybe they're just doing that so that we don't go blowing the range out of the water and try it for maximum salary. And so we counter somewhere ... I think the counter was actually still within the range at the higher end of the range and not even the top of the range, a very cordial counter, made a good case. I mean, this person was a really good candidate for this role. It wasn't like he was a random candidate. And the recruiter, in response to that email that we sent, the recruiter just lost her mind. I mean, she was very frustrated with the account. It was the kind of stuff where it was I wondered maybe if she got in the wrong email, but no, it was all threaded there in the thread.
Josh Doody: And she just said some things that were like, "I can't believe you're counter-offering. This is so disrespectful. They put together such a compelling counteroffer and now I have to go tell them that you're ‘counter-offering,’" and she's using quotes in the email around counter-offering and all this. And I'm literally reading it, I'm like, "We didn't even ask for the top of the range that she told us was available. We're not out of line here." And then she said, "You know what? We've decided this just isn't a good fit and we're just going to pull the offer." And so that was frustrating because my client had spent several weeks ... You know, he went onsite with them and did a bunch of work trying to get a good offer from this firm. We countered within the range they had told us was possible, and the recruiter ultimately pulled the offer despite really nothing out of line from us. But what I realized was all those red flags kind of added up to this is just a disorganized firm. It's very possible that they had decided they didn't have the budget for it anymore or something like that. But just the way it went down my client felt really bad. I was like, "Listen, I promise you, I promise you that in two weeks you're going to call me and tell me how glad you are you didn't go work there." Three weeks later he calls me. He's like, "Hey, I just got a much better offer at a better firm. I want to work for them" We negotiated that and we're off to the races or whatever. But it was like one of those things where just the classic red flag, red flag, red flag, recruiter freaks out and then I tell him, "Don't worry about it." He gets a better offer two weeks later, he goes to a better firm and he lives happily ever after. But it was the sort of like that's typically what happens when I see offers rescinded is that kind of thing where it's like there were so many red flags that we probably should have seen coming, and ultimately he’s glad he didn't go work there.
Mike Julian: That's been my experience too, is that getting an offer rescinded isn't just one of those things that happens out of the blue. You will typically see it coming long before it actually happens, much like your story of, it's one red flag after another and finally it's rescinded, and honestly you shouldn't be that surprised they did it.
Josh Doody: Yep. If your eyes are open, the red flags are usually there, and it's just a matter of-
Mike Julian:It is hard to see them.
Josh Doody: ... are you paying attention? Yeah. And a lot of times you don't want to see those because if you're that far in the process you just want to close the deal. You've already decided in your head that you've moved on. You're just starting this new job, you're hopefully making more money, and so you're willing to kind of overlook those little foibles of the company in order to just kind of get past it. Sometimes that works out and sometimes it doesn't.
Mike Julian: Man, that's hitting way too close to home for me. I courted a company and they semi-courted me for years. I had gone through several different interview loops with them spread over three or four years. And finally the last one I did we spent I think two and a half, three weeks going through interviews and they just kept throwing last minute interviews at me. And I'm like, "This is kind of weird." I would get on the phone with someone and he'd be like, "Yeah, I'm not really sure what I'm supposed to be doing here. But someone said to go interview you." And I'm like, "Okay. That's odd, but sure, let's chat." And everything was going great, everyone loved me. I had a call from a recruiter or from the recruiter saying, "Hey, here's a verbal offer we want to do." And I'm like, "Okay. That sounds great." And then an hour later they rescinded the offer, and I'm like, "What just happened? Everything was going great." And what I saw is that there was a lot of disorganization and there were red flags throughout the entire process that I wasn't paying attention to because I liked the offer so much.
Josh Doody: Yup. Yeah. I mean, that'll happen. It's easy to get blind to that sort of thing and just sort of ignore it and say, "Nah, it'll be fine. It'll be fine." And sometimes it is fine. Sometimes you're on stress. Most of the time it's fine, but sometimes it's not fine.
Mike Julian: Yeah. Sometimes it's fine. Or most times it's fine, sometimes it's not. Something you've been saying here is this is not typical of negotiation.
Josh Doody: No. Not at all.
Mike Julian: I found that most people don't like to negotiate, that it makes them nervous and primarily, they're afraid of the job offer being rescinded. But that's not how most negotiation goes. So what's been your experience with someone negotiating a job offer for the first time? How does it actually go for them, usually? What's the happy path here?
Josh Doody: Yeah. I mean, it's not even just a happy path. It's almost like a standard operating procedure to be honest with you. I mean, I describe it as their playbook, right? And so this is a really fun part of my job because so many people are terrified at this, but it's literally what I do professionally. And so I go through ... I'm working with, I don't know, four or five clients right now. And so I'm seeing this over and over and over, and, like I said, it's standard operating procedure. And so I'm able to tell my client, "Okay. Here's what's going to happen next. In about 12 hours you're going to get an email. It's going to say this." And then boom, it happens. "Whoa!" So typically here's how it goes. This is what I would say is like the 80% case, and that is you get the offer, sometimes it's verbal, sometimes it's a written informal offer, almost always informal. I think a sidebar on that is I think the reason offers are so frequently informal is there's some kind of ego or metric juicing going on where it's like companies want to be able to say that once they extend an offer, it's always accepted or something like that. And so it's like, "Well, technically I didn't extend an offer. I described a verbal offer to you. I described an informal offer," something or whatever.
Mike Julian: That's a nice scamming/gaming of the system.
Josh Doody: I think it is. I don't have any data or confirmation on that, but that's sure what it feels like. And so you rarely will just get a formal offer letter that you just have to sign. First you will get a verbal offer or an email with some bullet points or something, something, number, or something, how do you feel about this. That kind of stuff. And so the first thing I'll do is have my client make sure that they get something in writing, even if they just, "Hey, thanks so much for the offer. I appreciate it. Would you mind just sending me the bullet point summary in email just so I can make sure I didn't miss anything?" And so you're just trying to head off any potential future miscommunications there is why I do that. It's never happened that somebody misunderstood an offer, but it helps to make you just want to be positive because the next thing we're going to do is send a counteroffer email. Typically, that email will also have what I call the “why I'm awesome” paragraph in it, and it's a description of why this person is such a good fit for this particular role, this particular company. I do that for two reasons. One is to make the counteroffer have a little bit more weight to it, but also to make sort of a document that can be circulated internally if they need to get approvals. And I've had clients come back to me and say, "Hey, just so you know my recruiter told me that that email with that paragraph literally got me another $10,000 because it went through finance and they approved."
Josh Doody: So we'll send that counteroffer email. Typically, the recruiter will get the counteroffer email and within 12 to 24 hours, business hours, they'll respond and say, "Hey, thanks for considering our offer. I wonder if you have some time to chat about this some time soon." So they're trying to move out of email and onto the phone. And so then what I'll do with my clients is say, "Okay. We'll, tell them you're not available until tomorrow afternoon." Then I'll create a script for them. The script is designed to give them the next moves that they can make based on how the company responds to their counteroffer. So the company made an offer, let's say the offer is 150K base, and we countered it let's say 170K base. And so now the first thing we'll do is talk about salaries between 150 and 170K to see what if they come back at 160K what are we going to say? What if they're at 165 what are we going to say? What if they don't come off of 150 what are we going to say? And so I'll have a little script for them that's basically just a way for them to kind of hone in on whatever the recruiter says in response and then make sure that they ask for the next few things that makes sense. So for example, in my example if they were at 150 and they came up to 155, I think there's probably room there to ask for a little more salary. We might ask for 160.
Josh Doody: And then if they say no or they give a partial yes, so they don't come all the way up to what we asked for, which is kind of what I'm shooting for it by the way, then we'll ask for the next thing. "Okay. Well, you offered 20,000 equity. Can you do 30,000 equity?" No or partial yes? We'll move on to the next thing and say, "Yeah, well, you gave me 25,000 equity. That's great. Can you add a $10,000 sign on bonus and I'm on board?" And so we're prepping for that and rehearsing that, sometimes depending on if the client wants to do that, so that when the recruiter calls them and they have this conversation where the recruiter says, "Hey, we offered you 150. You asked for 170. We can't do that. That's above our budget, but we can do 155. How do you feel about that?" And then you know exactly what to say. So once that call is over usually that's basically the end of the negotiation. Either the recruiter will have said, "I'm authorized to do X, Y, Z. How's that feel?" And the candidate will say yes, or the recruiter will say, "I think I might be able to do that. Let me go talk to the comp team and see what they say." And then it'll wrap up and they talk start date. So that's the kind of straight forward, very vanilla, easy mode version, and that's about 80% of the time.
Mike Julian: Yeah. It's incredible how scripted and prepared that all is and-
Josh Doody: Yes.
Mike Julian: ... pretty much every job offer I approached until I learned that recruiters are always better at this than I am was, "Oh, I'll just kind of wing it." Then one day I realized, "Wait a minute. The people I'm negotiating against do this for a living. They're doing this several times a day and I do this once every two years. Maybe I should be more prepared."
Josh Doody: Yeah. That's what it's all about, is being prepared for what comes next. So that's a lot of what I do with clients and say, "We'll ideate through different scenarios that might happen." And the scariest one, the one where people most become scared and also try to wing it, is on that phone call where 80% of the negotiation is just sending that counteroffer. If you can just do it and you do it tactfully, then you've done most of the work. But there's still that 20% where you can get another 5K salary, you can get another 20K equity, and that can happen on that phone call. But the problem is that because you do it so rarely as soon as you hear them go, "Hey, Mike, how's it going?" And then you freeze up and you go, "Oh, no." And then you don't say the right thing.
Josh Doody: When I invented the script that I used, it was on my whiteboard in my office, which, Mike, you can see it over my shoulder, and I had scripted it out and the recruiter said something to me and I started to respond by asking for more vacation time. And then I glanced up on my whiteboard and realize that's not what it says. And so I said, "Wait, wait. Forget what I just said." And she kind of chuckled. I said, "If you can do, I don't know what ... the 118,000 then I'm on board." And she said, "Alright." And so I almost just left money out there. I wrote about this in my book, because I had the script, I had invented the script. I'm the inventor of this script. I am a salary negotiation expert. I wasn't at the time, but I was kind of still ahead of most people because I was doing it for the third time maybe. And I almost messed it up on this live phone call even though I had planned about it and written the script out because I wasn't physically looking at the script when the recruiter spoke to me, I almost messed it up. And so it's a question of adrenaline and experience. You just don't have a lot to call on, and things are happening really quickly. That phone call is two or three minutes long usually utmost. So it's super stressful and we make mistakes under stress.
Mike Julian: It is a very stressful, very short phone call. Every single time I've done it, five minutes but oh, man, it feels like way longer.
Josh Doody: It's exhausting. It's one of those you hang up the phone you sit down and let out a sigh and go, "Okay. What just happened?"
Mike Julian: Yeah. I remember I had this happen some years ago. I was working for a company and making 50,000, and I was going through this interview with a completely ... it was a new company and I hadn't told them what I was making. I was very careful about that. I was still kind of winging it. I still hadn't really prepared, and I get a text from the hiring manager and said, "Hey, I want to make you an offer for 90K." And I'm thinking, "Oh, my God, this is amazing."
Josh Doody: Ding ding ding ding.
Mike Julian: So I ask him like, "That sounds good. What's the title on that?" He goes, "It's like this junior systems engineer." Well, I knew he had a senior position also. I'm like, "I want that senior role." And he goes, "Oh, well, the salary for that is 120." I'm like, "Okay. That's good. I'll take that."
Josh Doody: Sounds good.
Mike Julian: So that was the extent of my negotiation. I'm like, "Oh, my God, I just did what now?" And I did this over text and I still hadn't prepared, but it was very much like ... I was lucky to do it. It was luck that played out, not my preparation.
Josh Doody: Yeah. Well, I would push back a little bit on that. So yeah, I kind of agree. But just the fact that you knew that there was a senior role available and had the wherewithal to ask about it-
Mike Julian: That's true.
Josh Doody: ... that's not luck, right? That's preparation.
Mike Julian: Yeah, that is true.
Josh Doody: Most people wouldn't have thought about that. I mean, sometimes it works out that way, but I think you were prepared a little bit more than you gave yourself credit for there.
Mike Julian: That's fair. So when talking sort of about some pitfalls that people run into what are three of the biggest mistakes that you see people run into when they're doing a job negotiation?
Josh Doody: You mentioned one of them just a second ago and I said, "Good job." And that is they share either salary history or salary expectations. And kind of briefly, this is a soapbox that I've been on for a couple of years now, but there's reasons that you don't want to share either of those. The salary history, the main reason that you don't want to share that is, really what you want to do in the interview process and as you're getting an offer, is you want to cause the company to think, "What do we have to do to convince this person to join our team?" The problem is with the giving them salary history is you've changed that from “What do we have to do to convince him to join our team?” to “What's the minimum that we have to do to convince him to join our team?” — which is usually like your current salary plus 5% or 3% or something.
Mike Julian: Right.
Josh Doody: I mean, I'm sure a lot of people are listening to this right now and they realize now, "Oh, I did that." And what happened was, "How much are you making right now?" "I'm making $80,000." And then three weeks later you get a job offer and it's $85,000, and like, "Oh, wow! It's just a smidge higher than what I'm currently making. What a coincidence? What are the odds?" And the odds are zero that it's a coincidence, right? That's very much they just said, "Well, he's making 80. We'll offer him 85 and see if he'll bite."
Mike Julian: Yup.
Josh Doody: On the flip side of that, the salary expectations question is also pretty dangerous. People's intuition on this is, "Well, I need to say a big number." That, if you're going to say a number, bigger is better for the most part within reason. But the reason that I don't advocate sharing that number is really ... It's easier to understand how I feel about that if I reframe the question as follows. I just did this with a client the other day and he said, "Oh."
Josh Doody: So instead of, “What are you hoping to make if we hire you in this role?” If they said, "We're a pretty big company. We've got 10,000 employees. We've got a whole army of people doing data analysis, and we get salary surveys every month from four different firms and we pretty much know what the market is paying. We have 17 people who do the job that we're hiring you to do and they've all been here for about five years. And we can pretty much dial in to the penny how much they should be paid. So given all that, what's your best guess what we might pay somebody with your skillset to do the job that we're thinking about hiring you for?"
Josh Doody: And the answer should be a big ... my favorite little emoticon thing is the shruggy guy. The shruggy guy just said, "Oh, I don't know." And so what they're doing is asking you to guess at what their pay structures are and what their budget is and all the stuff. You just don't know that stuff. And so you're either going to miss under, which is bad because you probably cost yourself money. You say 80,000 and they're thinking, "Whew! We would have gotten as high as 95." and there goes $15,000 that you never knew you had. Or you say a number that's way too big. You say 120 and they were open for 95 and they go, "We can't afford Mike. I was really hoping that we can bring them on, but maybe we should just move on to other candidates."
Josh Doody: And so that may sound nice because it saves people time, but the problem is that you've missed the opportunity that you so clearly articulated, which is well ... but what if through the interviews if they didn't know what your expectations were, you had a chance to convince them that you're worth what your expectations are? So maybe they started at 95 budget for a mid-level engineer, but they talked to you six times in interviews and bring you onsite and put you on the whiteboard and all this other stuff, give you a take-on project, and you come back and they're like, "Well, we were looking for mid level engineer but I think we should probably offer this as a senior and maybe we need to up the budget for that," right? So now you're able to talk them into that. You don't have that opportunity if you disqualify yourself by just being out of range of mission initially. So that's number one with a bullet asterisk next to it. It's an underlined explanation point. That's the mistake that almost everyone makes, and it warms my heart anytime I talked to a new client and they're like, "Hey, I read your stuff on not sharing salary expectations, so I haven't done that." I'm like, "Yeah, yes…
Mike Julian: ... Awesome.
Josh Doody: ," because it's going to be easier for us. You're going to be making more money. So that's a big one. The second one is, I would say not negotiating at all. A lot of people ... I feel like in my world it's crazy not to negotiate because that's all I think about. But most people still almost it doesn't even occur to them to negotiate. And I know this because so many of my clients come to me and they say, "Well, I got the offer. I was thinking about how to respond. And then I thought, maybe I shouldn't negotiate this. So I started googling salary negotiation stuff and I ran into you."
Mike Julian: Almost like it's an afterthought.
Josh Doody: It is an afterthought for them. And for every one of those people there's 50 people that it never occurred to them, until maybe they were already working at the job and they had lunch with somebody one day and realized that person was making 10,000 more than them and it was available. So just not even negotiating which sounds, I don't know, it's not a very meaty answer but, I mean, I don't know what the number is, but I'm guessing less than half of people even consider negotiating. So there's a lot of people who are just not even trying.
Josh Doody: And then I say the third one is kind of giving up too easily. I mentioned before in my 80%, this is the straight line, how it usually goes. Even if they come back and they say, "You asked for 170 and we offered you 150 and our budget was 150." And people go, "Oh, okay. Well, I don't want to lose the job. So I'll take 150." And what they should say is, "Are you sure you can't get to 160?" or, "Well, what can you do?" Or, "Okay. Well, let's talk about the equity. Maybe you have some flexibility there." Or, "You didn't mention a sign on bonus. Can you do a $10,000 sign on bonus?" So there's opportunity there. Even if you feel like you hit a wall there's probably an opportunity to ask for something else, to find something else where they're flexible by either directly just saying, "Well, you're not flexible on salary. Is there anything else that we could talk about here? Is there anything else that you can give on?" Or ask for something. And so giving up too early can be pretty expensive. And that's one of those things where the story of that person would usually tell is, "Oh, well, I did counteroffer, but they said they couldn't move." But what they really mean is they said they couldn't move on base salary and I didn't press them on anything else. And so usually when you're that deep in the process you have enough kind of capital built up with them in terms of how badly they want to fill the role. That asking for equity or a sign-on bonus is they'll just shrug it off. If it's something they can't do they'll say, "Oh, no. We can't do that either." But they might say, "Yeah, here's another 5,000 shares," or, "Here's $10,000 for a sign-on bonus," or, "We'll do relocation for you." So that would be the third one.
Mike Julian: Okay. Yeah. You started to talk a bit about ... Salary is not just the only lever you can pull. You could pull equity, you can pull stock grants, you can pull vacation time, remote work. There's so many different levers you can pull to increase your total comp.
Josh Doody: Yes.
Mike Julian: And the levers are interdependent in some ways, but not as closely tied as people often think.
Josh Doody: Yeah. And a lot of times ... so it really varies by firm, but some firms like Google, for example, Amazon does this too, they're not very flexible on base salary, but they can be very flexible and equity for the right candidates. Amazon especially will do this because of their weird investing schedule. So there are other levers that you can pull and you can't know whether they're fixed levers or variable levers until you ask about them. So yeah, there are things that are not just salary. I tend to have my clients tell me, "What are the two or three things that you care the most about either that are explicitly in the offer?" So most offers that I see because I work with engineers most offers look like some combination of base salary, equity, sign on bonus. And sometimes that sign on bonus is a zero, but it's almost always available if asked for. And so I'll ask them to just so I'm clear, "I assume that base salary is most important to you, followed by equity funding, followed by sign-on bonus. Correct me if I'm wrong." And sometimes they'll say, "Actually, I'd rather focus on the equity in this case." And I say, "Great. I'm hoping for a moonshot here. The salary is already good enough. Let's get more equity." But we'll talk about that in terms of what are your two or three or four most important things, and then we'll build a strategy that allows us to essentially piece meal maximize each one of those in turn, in sequence until we get to the end of the training. We can say, "Okay. Now we've maximized the offer in terms of base, equity, sign-on bonus, and we feel pretty good about it."
Mike Julian: I want to talk about that sign-on bonus for a bit because it's not super common in the world of DevOps and SRE for sign-on bonuses — much more common in software engineering roles. But what's a normal sign-on bonus at say a normal firm? Are we talking in the realm of $2,000? Are we talking $50,000, more, less?
Josh Doody: Yeah, I would say it depends on which firm. There are a lot of variables here, but I would say I feel ... I almost never asked for a sign-on bonus less than $10,000. And I've seen sign-ons that are in the six figures for specific engineers — maybe not DevOps or SREs but more for machine learning specialists, automation specialists, AI. But for most experienced engineers, most firms have kind of a little bucket of one-time cash sitting around that they'll dole out a little bit of for the right candidate. So I would think, especially for your audience, I'm guessing $10,000 is a reasonable amount of a sign-on bonus, not to expect but to certainly fish for and see if it's available.
Mike Julian: Yeah. It's a matter of calibration. Because they're not very common, like what's a reasonable number here? “What's possible?” is really the question.
Josh Doody: Yeah. And so a lot of times what I'm hoping is that the company will give us something to key on that's... So there's a lot of little subtle things that are happening with my strategy, and one of them is that I like to counter on base salary first. One reason I'm doing that is to get more base salary. But another reason is that I actually want to see how flexible they are on different stuff. And so sometimes they'll come back because the base salary is more than they can budget, which is sort of by design. I'm intentionally asking for more base salary than I think they can get by a little bit. What I wanted to do is move a little on base and then move on some other dimensions like equity or a sign-on bonus or something so that I can see how much they move or what they offer. So if we countered with $30,000 more base salary and they can only do 15, maybe they'll throw in a $25,000 signing bonus, and now I have kind of a baseline to use when I'm talking about sign on bonus with them.
Mike Julian: That's pretty awesome.
Josh Doody: But I try to get them to tell me first, and if they don't, then I usually start by keying off of ... if I can find information online, I'll use that on Paysa or Glassdoor or something. But I usually just key off about how much gap in base salary did we ask for that is kind of unfulfilled. That's usually kind of my guide for how much of a signing bonus to ask for. So we asked for 30K base. We got 15. There's $15,000 we need to try and come up with somewhere that's a coherent story. And so I might end up asking for a $15,000 or $20,000 sign-on bonus, in that range.
Mike Julian: Sure. So we've been talking a lot about new jobs, new job negotiation. There's a lot of people out there who actually really like the job they have but are feeling underpaid in. Maybe they've been there for 15 years and they really like the place; they don't want to leave, but they just want more money. What can they do?
Josh Doody: Well, they can forget everything that we just talked about. It's a totally different process.
Mike Julian: Alright then.
Josh Doody: I'll start by saying that this is a process that I developed as a hiring manager when I had a team of people who were all underpaid when I took over the team. And just in case, on the off chance any of those people happen to be listening, they were underpaid just through inertia, through time that passes in firms kind of like you said. This was not a 15-year-old firm but they'd all been doing their jobs for two or three years and had been really good at them and had been essentially promoted into these jobs that were more demanding, and the salary just hadn't caught up. And so they came to me and said, "Hey, when I hired in I thought I was going to get this kind of a raise over time and my salary just hasn't tracked with." I say, "Great. Here's what I need from you." And so what I told them I need from them is what I have written a course on and that I teach people. I wrote about it in my book. And that's this. So first they need to do some research and market value estimation to figure out, "Okay. Well, I've been in the firm for 15 years. I know I'm definitely behind the pay grade. But how far behind am I? What should I be making right now given my skill set, experience, and my value to this firm?" And figure that number out. So that's what I call your target salary.
Josh Doody: And so they need to go in with a number. So this is totally different. That's why I said forget everything we just talked about. In the new job offer, we want the company to say the first number because we don't know what their scale looks like. In the current job situation, we do know what the scale looks like because I know my salary and they know my salary. And so you have to basically present everything to your manager on a silver platter to make it as easy as possible for them just to rubber stamp your request and go to finance and see if they'll approve it.
Josh Doody: And so the first thing you want ... There are three things that you need. The first one is a target salary. That's based on the research that I mentioned. You want to do as good a job as you can and come up with a number that is reasonable and makes sense given your tenure, the value of the company, and you want to try and tie that to your actual work product. The second thing is accomplishment. So this is how you demonstrate the value that you're asking for. And so the way I described raises is ... see if I can get this right. I haven't said this out loud in a while. You're asking for compensation for the unexpected value that you're adding since the last time your salary was set. So the key word in that phrase is unexpected value. And so it's like for whatever reason your salary was at 15 years ago, you're now producing significantly more value than you were when we set that salary. And some of that value is unexpected. You accelerated faster or it's unexpected because you're just not being compensated for it because we didn't do raises five years on the road during the recession or whatever that was, right? And so it's asking to be compensated for the unexpected value that you're adding since the last time your salary was set.
Josh Doody: And so you want to be able to say, "Well, here's what I think I should be making. Here's what I would like. I would like $120,000 base salary." So your specific asks. "And the reason I'm asking for that is I'm actually managing twice the business that we expected me to be managing at this point. I've been mentoring six people, and I've also taken a lot of the responsibility that you, my manager does, onto my plate in terms of reporting and getting things ready for roll ups so that you don't have to do that work and you can focus on more valuable work, which saves the firm a lot of money and time." And so you're justifying your ask.
Josh Doody: And the third thing I call accolades, other people having recognized what you're doing. And so that's a client who sent you a gift card because they loved your work. That's a coworker who wrote you an email and said, "Thanks for saving my bacon." That's your manager sending you an email and identifying that you're a superstar and that you're crushing it this year and hope we have a good time next year, whatever that is. And so you package those all together. The way that I like to do this is to have my clients write an email and it's going to be sent to the manager later. But the idea is that if you can't write this email, then you've got problems. There's something missing. If you can't figure out the target salary, your manager can't figure it out either. If you can't back up your request with accomplishments, there's something wrong here. You're asking for more money but for no reason. If you don't have any accolades, that's optional. But that can sometimes be a red flag because it's like, "Well, nobody has recognized the work you're doing." That's probably not good. But that's optional.
Josh Doody: And so you package it up into this email. I'll send you a link to the template after we talk, and you get it ready, you rehearse it, and then you asked her manager if they have time to talk about getting a raise. You tell them, "I'd like to talk about my compensation on our next one-on-one." You talked to them, you basically verbally present the case that I just described, and then after that conversation you follow up and say, "Hey, just wanted to follow up with an email summary of our conversation today about my raise request. Here's a summary of what I'm asking for." And you send him that email. Again, this is a document that can be circulated and that's why you do it. So they can just rubber stamp and say, "Yep, looks good to me. Hey, finance, can you do 120 for Josh?" "Yes." "Great. Let's do it." Or, "No, the best we can do is 110," or whatever. Now the conversation is rolling. So in a nutshell, as a manager, that's the process I developed and that's the process that I teach people when they ask.
Mike Julian: Man, that's fantastic advice. Coming from the other side of the table, I know there are things that managers must be doing wrong in negotiation with the candidates. They're losing great people. What advice would you have for the managers that are listing on how to improve negotiation with a candidate?
Josh Doody: Yeah. It's almost not even negotiation but you kind of mentioned what it is. I mean, employee attrition is very expensive. And if somebody leaves because they feel like they're undervalued or underpaid that can be a really expensive thing to happen to a firm when that person would be better there, when they need that person to do the work they're doing. And so I think that maybe a big mistake that managers make with this stuff is they think they're really busy and there's a lot going on, and yeah, "This person has mentioned a couple times they’re a little frustrated with their pay, but I'll just deal with that later. I'll just kick the can down the road. I'll wait until it's slower up here. I'll wait until the end of the quarter," or whatever that is.
Josh Doody: And I think that's a mistake just because it takes a lot of courage for an employee to go to their manager and say, "Hey, I know you're paying me well, but I'd like to be paid better," or, "I know you're paying me a paycheck every two weeks. I want that paycheck to be bigger." It's intimidating. And most people will not even do it. They just won't. And so if you're a manager and somebody comes to you and says, "I'd like to talk about my pay," you should perk up and listen. That's significant. They're overcoming a lot of inertia to do that, to have that conversation, to say that thing to you. And there's a really good chance that before that conversation, they've already started looking for jobs somewhere else.
Mike Julian: Yeah. They've probably been thinking about this for months by the time they work the courage up.
Josh Doody: Yup. They've been talking about it over happy hour on Friday. It comes up every Friday. They've been complaining about it. Somebody finally said, "Why don't you talk to your boss?" And they finally did, but it's after months and maybe after they sent their resume to a couple of firms, maybe after they changed your status on LinkedIn to say “looking for work.” And so if you care at all about having that employee on your team, if they have the courage to talk to you you should sit up and listen and say, "How can I help?" And actively work with them to help. And then if they do present a case like this to you, give them real feedback on it. Tell them, “Here's what I'm going to do. Here's the timing on what we're going to do. Let me know if that works for you. Here's how I'm going to help you through this process. Here's what else I need from you. Here's what I think the timing will look like." Communicate clearly with them. So number one, don't blow off their request. Don't kick the can down the road. That could be a big mistake that it results in you getting a two weeks notice a couple of days later. And two, communicate with them openly and tell them what you need from them. If you know what the process looks like to get raises approved and things, tell them, "This is what I need from you to get this done." Be open with them about it and keep them posted on the process.
Josh Doody: And the last thing I would say is, if that person has come to you and asked for a raise that made their case in the way I described and you disagree with their case, so, "Okay. I hear what you're asking for, but I just don't think you're quite ready for that yet," not only should you share that with them, but you should also say, "And here's what you can do to get the raise that you just asked me for. Here's what I need to see from you performance-wise to justify this when I go to finance. And I think that'll take six months. There's discrete steps that you need to take. And if you accomplish those things, I think that I can make a good enough case to get you a raise and we'll follow up on this in our next one-on-one." So those are the three things I would say the managers should be thinking about.
Mike Julian: Alright then. Well, Josh, this has been just a fantastic time. Thank you so much for joining us. Where can people find out more about you and your work?
Josh Doody: The easiest place to find me, actually to interact with me is probably Twitter. I'm @JoshDoody
on Twitter. Super active on there. If you mention me I'll reply. Most of my salary negotiation work, including my coaching offering and all that good stuff is on my website. fearlesssalarynegotiation.com
. There's all kinds of free material there. I made a ton of free stuff available. If you want to learn more about the coaching that I mentioned that's fearlesssalarynegotiation.com/coach
. Those are the three things I would say are probably the most useful and directly useful to your audience.
Mike Julian: Yeah. And you wrote a book called Fearless Salary Negotiation, which I've had the pleasure of reading, and it's absolutely fantastic. I love it. Thank you so much for that. It's one of those-
Josh Doody: Thank you for saying that.
Mike Julian: It's one of those books I wish that I had read just years ago when I first started this. I shudder to think about how much money I've left on the table as a result of not having had that. So-
Josh Doody: That's why I wrote it. That's very kind of you to say that. Thank you for saying that.
Mike Julian: I've been sending all of my friends to you for negotiation and such. The work you're doing is fantastic. So thank you so much for joining me.
Josh Doody: Awesome. Yeah, thanks for having me. It was a really good talk and fun to talk to you face-to-face for the first time in awhile.
Mike Julian: So to all listeners, thank you for listening to the Real World DevOps podcast. If you want to stay up to date on the latest episodes you could find this at realworlddevops.com and on iTunes, Google Play or wherever it is you get your podcast. I'll see you the next episode.