Chapter 4

Negotiating a Job Offer

Negotiating is something a programmer might associate with high-pressure sales techniques, or with the ravenous profiteering of the Ferengi. Most programmers would rather write code than spend time negotiating.

Negotiating a job offer can be like that, but it doesn't need to be. With preparation and with the right attitude, you can establish a satisfying agreement with your potential employer. If you or your potential employer has an adversarial attitude, or if you don't prepare properly, then you risk coming out of the negotiation feeling aggrieved or hard done-by. If you are unhappy with the deal, you probably won't stay for long. If your employer enters into an agreement that he resents, again, you probably won't stay for long.

Before you enter into any negotiation you must consider what your reaction will be if things don't work out as you hope. You should hope for the best, but be prepared for the worst. What will you do if negotiation completely breaks down? Will you be prepared to walk away? You need to understand which things are important to you, and on which things you are prepared to compromise.

Walking away from a job offer is not the worst outcome. The worst outcome is being stuck with a job you hate, with terms and conditions that make leaving or doing anything else difficult.

Understanding the Market

The reason you need to understand the market is very simple. If programmer unemployment in the region is high, you have less negotiating power. If programmers are scarce in the region, you have more negotiating power. If your skills are in demand but relatively scarce, then you have more power. If your skills are common then you have less power, and so on.

Career programmers will do well to keep an eye on their local IT job boards, regardless of whether they are looking for work. Being familiar with the rate of job postings and salaries being offered gives you a feel for what is going on in the market.

For a more serious analysis you can turn to official figures of employment.

In the UK, the Office of National Statistics (http://www.ons.gov.uk) compiles and publishes detailed information about employment (and unemployment) in different professions, with specific categories for Information Technology and Telecommunications Professionals including:

• IT specialist managers
• IT project and programme managers
• IT business analysts, architects, and system designers
• Programmers and software development professionals
• Web design and development professionals

In the U.S., the Bureau of Labor Statistics (http://www.bls.gov) publishes a number of helpful indicators such as the projected change in the number of computer programmers employed between 2010 and 2020. You can also find occupational employment statistics at both the national and state level, and further broken down into metropolitan and non-metropolitan areas (http://www.bls.gov/oes).

Doing the Numbers

If you are offered a deal that involves options other than a straight salary or wage then you must crunch some numbers to work out what value these options actually represent.

If you are offered a bonus or incentive scheme, look very closely at whether the conditions attached to that bonus or incentive are within your control. Having bonuses be contingent on overall business performance is perfectly reasonable, but you should downplay the value of a bonus that is based on the subjective assessment of your line manager or some committee. This is not suggesting you take a deliberately negative attitude toward bonuses and incentive schemes, but you should realistically assess the value of the offer.

Share options are often a good value at larger or established companies, but they can be essentially worthless at smaller companies. The value of a share or stock option depends entirely on the success of the business, which is something that might not be in your direct control. How you view these options depends on your personal preference for risk versus reward. Young programmers and those without a family will probably be more open to the idea of exchanging a portion of their salary for a potentially greater reward.

Considering the whole package

Salary is very likely to be the biggest part of a package, and this is why almost everyone focuses on it when negotiating. Realizing that other parts of a package can not only be significant in their own right, but can also be much easier to negotiate is important. You can score big wins by focusing on these instead of the base salary. Consider how much an extra week of paid leave is worth, for instance. Would you value being able to work from home once a week? Is there a significant commuting cost the company could help with? Here is a list of items you should consider in addition to base salary:

• Commuting cost and time
• Paid vacation days
• Training
• Paid study time
• Medical insurance and health plans
• Share options
• Childcare schemes
• Perks such as on-site meals and stocked fridges
• Gym membership

Some companies also offer “discount” schemes through certain retailers. These can be worthwhile although, as always, you need to shop around and compare prices before assuming they are a good deal.

Other, less tangible factors can be even more important depending on your circumstances. Don't forget to consider:

• Is the work going to be interesting?
• Who do you get to work with?
• Does the potential exist for career advancement?
• Is the company culture one you will enjoy?
• How will this job look on your curriculum vitae (CV)?
• How does this job fit into your overall career plan?

Technical and product management considerations are also important for most programmers. A company that doesn't use source control, or that refuses to fix bugs in favor of releasing new features is unlikely to be a satisfying place to write code. Think about things like the following:

• Will you have a technically literate boss?
• Will projects be run with an agile approach?
• Which tools are used for source-code control and bug tracking?
• Will you have a high-spec workstation and multiple monitors?
• Will you be using the latest frameworks?

Must have, should have, could have

Must Should Could Won't (MoSCoW) is a technique you can use to help you clarify priorities before entering into negotiation. MoSCoW is originally a technique for prioritizing the requirements of a software project, but is easily adapted for prioritizing aspects of your employment offer.

Must have

“Must haves” are the things that are non-negotiable. In this category you might have (for example) a minimum base salary, and perhaps a minimum amount of paid leave.

These are the things that are deal breakers: You either get them or you will refuse the offer. Some programmers will want to include specific technologies or projects in this category.

Should have

The “should haves” are the things that are perhaps as important as those in the “must” category, but where an alternative might be acceptable. In this category (for example) you might have formal training, where you would consider “in-house training” as an alternative.

Try to list as many of these as you can, and for each of them consider what alternatives would be acceptable to you.

Could have

“Could haves” are the things that are desirable, but not deal breakers. If you don't get them you will probably still accept the offer. Things in this category might include free meals, a gym membership, and so on.

Won't have

In the original MoSCoW classification the W stands for won't as in, “won't be included in this release, but maybe in a future release.”

You can use this category in two ways: to list the things that you won't tolerate, or to list the things that won't make any difference to your acceptance of the offer. Either way, this category is optional when prioritizing aspects of the offer.

The Role of the Recruiting Agent

You might have the impression that the agency that introduced you to the potential employer will have your financial interests at heart. After all, you might reason, its fee is proportional to the size of your remuneration package. That might be true to some extent, but think about the numbers. If you manage to negotiate an extra 10 percent then the agent gets another 10 percent as well. On the other hand, if the deal falls through she might get nothing. From the agent's perspective, the potential increase in her fee is very unlikely to be worth the increase in the risk of losing her fee altogether. Closing the deal is a much higher priority for the agent than negotiating a better deal for you.

An agency might negotiate on your behalf if you have a strong bargaining position, but most of the time it is more likely to quietly line up alternative candidates for the employer. Never make the mistake that an IT recruitment agency works primarily for your interests. If a more agreeable candidate turns up, someone who appears less likely to agitate for a better deal, then most agencies will prefer to work with that candidate instead of you.

Start as You Mean to Go On

When negotiating, don't forget that you will be giving your future employer its first insight into how you operate and the things you value. Passively taking whatever is on offer colors the employer's impression of you in the future. Similarly, making an aggressive and argumentative impression will also stick. Think about how you want your employer to perceive you, and then proceed with negotiation on that basis. “Firm but fair” is the approach I recommend.

Avoid overcommitting

A big trap for inexperienced negotiators is when an employer makes a small concession and then asks you for a big concession in exchange. Perhaps you have asked for an extra five percent salary, and in exchange for agreeing to this the employer asks you to be on call at weekends and holidays, which, he or she might reassure you, “won't be a lot of work.”

When considering this kind of deal, look at what it could mean in the worst case. It could mean that in exchange for a small increase in your base salary you have given up all your free time. Even if you don't actually end up doing a lot of extra work in your free time it could mean that your ability to make plans, socialize, pursue hobbies, and so on is limited simply because you need to stay available in case you are called in. That isn't a good deal. If you are offered a deal like this, be sure to work out the details up front, before the signing the contract. If you make a large commitment then ensure that it is accompanied by reasonable limits; in other words, that it is not open ended. Verbal assurances are usually not adequate protection. If a situation on the job goes badly and it ends up in a dispute, you don't want it to boil down to “your word against theirs.” Having details written down and agreed to (signed) by both parties always pays off. Every business knows this; it is both good practice and common sense.

Realism and idealism

Every programmer who has read Peopleware by Tom DeMarco and Timothy Lister will be aware that working in a quiet office is one of the major factors affecting programmer productivity. Yet, although the need for a quiet office is almost universally acknowledged, most programmers work in noisy offices located somewhere between the chirpy marketing team and the chatty customer support team. There is a stark contrast between the ideal conditions a programmer wants and the reality he or she will face in almost all workplaces.

This is not to suggest that you should compromise at every turn, but rather that you should have a realistic sense of what to expect. Many top companies will not tick all your boxes, and you won't be able to change that overnight. Think about what is important to you, use the MoSCoW technique for prioritizing, and be prepared to compromise in some areas if it means you get the things you really want.

Evaluating a Contract

Some types of clauses in contracts of employment deserve special attention. The following section lists some of them.

Intellectual property (IP)

Some employment contracts are very one-sided about intellectual property, saying in effect that anything you create, even those things you create in your own time, will belong to the company. In most cases this clause simply ratifies the reasonable expectation that the company owns the work you do for it, but this type of clause might also affect you in some surprising ways. For example, you might no longer be able to work on open source projects because that work would be in conflict with your new contract. If you have any thoughts of potentially working on your own stuff, you must look closely at any clauses in the contract relating to IP.

Note that sometimes the question of who owns the intellectual property of your side projects is settled in law, which makes anything written in an employment agreement redundant. A good example is the California Labor Code, section 2870, which reads as follows:

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or

(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

Retrieved November 2012 from http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&group=02001-03000&file=2870-2872

Non-compete clauses

A non-compete clause. Asking their employees to not work for competitors makes sense for employers, but sometimes these clauses can be much further reaching than necessary. If you have one of them in your contract, be sure you understand the implications. You don't want to find your options unreasonably restricted if things do not work out.

Non-solicitation clauses

Similar to a non-compete clause, is a non-solicitation clause. This kind of clause is fairly common, but, just as with the non-compete clause, it can sometimes be too far reaching in scope.

If you have any thoughts of potentially striking out on your own at some point in the future, carefully consider the implications of such a clause.

What to Do If Things Go Wrong

Whenever you enter a negotiation, at the outset you must consider what your reaction will be if things go wrong. You might find that the employer is open to negotiation and things go well, but in some cases you might get a negative reaction or even a refusal to enter into any discussion regarding the terms of your employment.

“It's a standard contract”

A common reaction to the suggestion of negotiating aspects of a contract is that “it (the contract) is a standard template and can't be changed.” That is nonsense. What it means is that it would be awkward for the hiring manager to have it changed without recourse to a legal team or (more often) to an unyielding human resources department. You should politely but firmly say that it will be worthwhile making the effort because of the importance you place on it. Being specific about the changes you want to make, including the actual wording of the changes, can also help. You should try to make it as easy as possible for the hiring manager (and whoever else might be involved) to agree to your changes. Always get legal advice if the changes are anything but simple and straightforward.

The silent treatment

One of the hardest things to handle as a candidate is the silent treatment. You might have made a counteroffer or asked to change a clause in the employment contract, and then you find that it goes quiet and you hear nothing for days or even weeks.

Hiring managers are typically very busy, but failing to respond is not a good sign in any circumstance. Even if legitimate reasons exist for the hiring manager not getting back to you, writing an e-mail saying something like “Sorry, we are very busy, and will respond by the end of the week,” only takes a few minutes.

If you get the silent treatment, you should be realistic. Wait for a reasonable amount of time, perhaps a day or two, and then carry on with your job search. It is unlikely you will be happy working for a company that does not prioritize this kind of communication. Don't waste your emotional energy chasing a company that behaves this way.

Escalation and ultimatums

Making a reasonable request that is met with a disproportionate response, perhaps even a threat of withdrawing the offer, is another situation in which you need to be realistic. Do you want to work for an employer that reacts this way? How will it be if you agree to a contract and then later want to negotiate a raise or a change to the conditions of your employment? The answer is that it won't be good. If an employer escalates a point of negotiation into an argument, your being happy working for the company is unlikely. Be glad you dodged this bullet and move on.

Summary of Negotiating Tips

Negotiating can be a difficult and stressful experience. Here is a list of key points to help keep down the stress and to help you stay focused on what truly matters:

• Work with your prospective employer, not against them
• Avoid an adversarial approach
• Wait for an offer before attempting to negotiate
• Understand the balance of power
• Do the numbers
• Think of the longer-term working relationship you want to have
• Consider aspects of the package other than the base salary
• Be clear about what is important to you
• Be prepared to compromise on less important parts of the package
• Be prepared to walk away if necessary
• Watch out for overly restrictive clauses in your contract
• Don't expect a recruiting agent to negotiate for you