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Can I negotiate an offer after verbal acceptance?  

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RGM
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August 1, 2016 10:40 pm  

Here's an analogy. Let's say you are working as a Fleet Manager for a large company that provides vehicles to their employees. They've recently decided that it is best to start acquiring these vehicles on the aftermarket rather than through brand new car purchases through a dealer.

So, you go out and buy 100 Lexus's -- some model, same year -- on the market from private sellers. You'd pay X amount for some, X +10% for others, X -5% for some, and perhaps even X +20% for a few of them. Why? Because each sale is negotiated.

It's the same way when hiring a laboratory full of scientists. Every single job offer is negotiated. If it is not, than it will be X. But in some cases, that hire starts at X +4%, in other cases, X +8%, and so on. This leads, throughout the following years of a career, to some rather big differences in pay between one person and another, because everyone will get their annual increases and occasional bumps for superior performance.

This is why it is so extremely critical for the new graduate or the job-seeking Postdoc to study and understand the basics of job offer negotiation.

Dave

I understand that point of it. I disagree that others should be paid differently for the same job. All things being equal, I doubt the employee who is being paid 10% less is expected/allowed to perform less than the person who is paid more.

"Some men see things as they are and say why, I dream things that never were and say why not"
"If you think research is expensive, try disease." - Mary Lasker


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Dave Jensen
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August 2, 2016 4:27 am  

RGM said "I understand that point of it. I disagree that others should be paid differently for the same job. All things being equal, I doubt the employee who is being paid 10% less is expected/allowed to perform less than the person who is paid more."

That would really tick me off if I were working in a company where I started early in the morning, and worked on Saturdays, and took work home, and there was someone else who was there with the same job title who came in at 9 and left at 5 and wasn't holding up his or her end of the bargain. Why shouldn't I be paid more?

You'll never find a place where people put out the same effort. If that were the case, than you'd have a case for the same pay.

Dave

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RGM
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August 3, 2016 8:34 pm  

You'll never find a place where people put out the same effort. If that were the case, than you'd have a case for the same pay.

Dave

Haha, good point!

"Some men see things as they are and say why, I dream things that never were and say why not"
"If you think research is expensive, try disease." - Mary Lasker


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RLemert
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August 3, 2016 10:19 pm  

In an interesting coincidence, Massachusetts has just enacted a law (effective July, 2018) that bans employers from a) asking for your salary history until they have made you a bonafide employment offer, and b) preventing you from discussing your salaries with your coworkers. It was apparently enacted in an effort to help address the gender gap in wages, but I think it's going to benefit everyone.

Here's just one link among many:

http://money.cnn.com/2016/08/02/pf/jobs ... quity-law/


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Dave Jensen
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August 4, 2016 3:40 am  

Rich,

Thank you for pointing that out. Your video link was not really all that relevant, because it's more about asking for a raise. But this law . . . it's funny, but I haven't seen it spoken about ANYWHERE in the employment trade press. It's revolutionary. It puts asking questions about your salary history in the same category as asking about your marital status, or your sexual orientation. Big "no-no's"! I can't imagine that an entire sector of the USA, companies with offices in Massachusetts, are really going to completely re-do their employment forms and train their managers in this one state only, to stop asking those questions. That's the strange part about it. It's more of a sweeping federal law in nature, but only being enacted in one state.

I don't know how I feel about it. I feel happy because I absolutely HATE those questions about salary history and how much it can tank your efforts to get a fair offer. But it seems so darn obtrusive. Another set of regulations to deal with (ugh). We'll have to see how it works in real practice. Actually, because the law goes on to say that you CAN ask about salary history after you've extended a bona-fide job offer, what could happen is that employers will start offering low-ball job offers (lower than today's low-ball offers, that is) and then when a person has that in hand and says "Wait a minute, this seems a little low . . . " the employer can then legally say, "Oh is it? Please tell me about your salary history." So I guess there is a "work around" for the employer, built in!

Dave

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RLemert
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August 4, 2016 4:29 am  

It would make things simpler if this were enacted at the federal level, but companies are already handling a lot of things that are state law. I'm sure they'll figure out a way to deal with it. I'll have to go back and look into it more, but I'm wondering what happens if an offer is generated through e.g. a company's Chicago HQ for someone being assigned to their Mass. offices.

As for your "loophole", I would advise candidates to consider this a sign that they should reconsider whether or not they want to work for that company. If they're going to play this kind of a game, what other games are they willing to play. They can ask all they want, but all they're going to get from me is "my understanding is that the going rate for someone with my background in your part of the country is in the range of $ xx to $ yy."


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DX
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August 4, 2016 4:09 pm  

Hi -

A couple over-arhcing Points.

I agree with Dave, that if you start sharing salaries among Peers, the consequences are quite negative and there is no positive outcome for doing that. There are a few influencing factors, such as Initial negotiated salary, employee tenure (i.e makes no sense to compare to someone who is 5 years in the Team due to yearly increase, bonuses, etc.), and experience differences etc. etc. Don't waste time here.

There are plenty of on-line resources to get a pulse on what we in the industry call the "Fair Market Value" (FMV) of the Position. Usually HR departments will have conducted a market benchmarking excercise, in order to snap a FMV to positions which serves a Basis to define the employer's value for the Position (i.e. competitiveness of the package). I advocate here the opportunity to talk to recruiters and build a Network with them, they will know.

In General in the bigger Companies, they will have an assigned Budget to the Position and the wiggle room to give an offer can at some times be very narrow, may +/- 3 to 5% for the assigned Budget where the salary is linked to. To go beyond that upper limit of wiggle room, and you will Need alot of negoation and sufficient view from the Company that you are of Talent to give an offer beyond thier defined threshold. I.e the hiring Manager will have talk to finance and HR. This is rare, and in genearaly, the need for you speicific offerings must be superior compared to other candidates.

Yes, companies will try to shoot under more than the upper Limit right? So enter negotiating. There are other Points that you should be Aware of, i.e. differences of salary/package between big pharmas and the American biotehcs/mid-size pharmas (the latter tends to be higher and better in my country). So in this example, if you're coming in from the latter and looking to go a big pharma, it could be your salary expecations is much higher than thier Budget and upper Limit of wiggle room, or is matching very closely to that of the hiring manager, or even benefits you have maybe be much better than the big pharmas and that of the hiring Manager, so HR will Screen Motivation based on that as well (they know what they're dealing with among the various companies, ie. they are well up on thier market insights). So just a tiny example of things to be Aware of, where one will have no control. I spoke to an HR Person a big pharma a few years back, the mentioned they gave up trying to recruite from certain companies as they knew they could never be as competitive, compensation wise, they could only offer experience and so called "leadership opportunties" (or as I like to say, do more at lower salary with fancy title with Company "brand" as some higher calling value).

Alot of employers will ask the salary history question mainly as gauge to see if they can afford you or to see if expectations are aligned. The better question I like instead is more on what is the salary expectation. Here most companies have thier threshold as I mentioned. They'll happily walk away if you are not interested in their offerings or if there is a mis-alignment. Unless one is such an amazing Talent. So in my opinion, the candidate should have thier BATNA as well. Remember negoation is not all about salary.

You should know very early if the salary expectations are aligned, so you have no suprises later on.

In genearal I don't advocate being low balled in Terms of salary and I don't advocate one should take a low ball salary, however, contextualized into newly minted graduate looking for a first Job or a Person looking to to a lateral move to develop further, maybe these are times the experience obtained will out weigh the offered salary in a very short to mid-term horizon, i.e you will be much more valuable and competitive 1 to 2 years in.

So know a bit about what's going on the other side, sometimes, you're dealing with a buracracy, politics, SOPs, finance Systems (aka Budgets) and HR departments who have their KPIs (usually cost savings per hire objective). Things you will have no control over.

this can be different in smaller companies where probably there is no benchmarking and in genearal their salary offerings is probably no so market or evidence based but more their own perception of value and their operating Budgets. So probably more wiggle room here on upper and lower Limits on both candidate and employer sides.

Good luck.

DX


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Parker
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August 12, 2016 2:46 am  

Some employers leave no shortage of opportunities to make it feel like you are getting screwed over, which is a shame because then the employees always have one foot out the door. The reason employees get mad after they find out their team mates salaries is because they felt like they were deceived due to a lack of transparency and lopsided negotiation practices. We are thrown a random number and expected to be just happy that they honoured us with a job offer. Well I've walked away from jobs when I felt like there was a lack of transparency, even though their offer was more than I'm making now. I will never know whether I made the right decision or not. But I felt like there was no transparency in the process and I got the distinct sense that I was getting screwed over (maybe falsely or maybe accurately, I will never know). For example, it is common in Canada to not even advertise salary ranges in the job ad so if you can't find out such information from somewhere else, you are completely in the dark. If I feel that the process is fair and I understood their metrics, it would make everyone a lot happier. But some employers don't see it that way. Well it is their loss!


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Dave Jensen
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August 12, 2016 3:16 am  

Some employers leave no shortage of opportunities to make it feel like you are getting screwed over, which is a shame because then the employees always have one foot out the door. The reason employees get mad after they find out their team mates salaries is because they felt like they were deceived due to a lack of transparency and lopsided negotiation practices. We are thrown a random number and expected to be just happy that they honoured us with a job offer. Well I've walked away from jobs when I felt like there was a lack of transparency, even though their offer was more than I'm making now. I will never know whether I made the right decision or not. But I felt like there was no transparency in the process and I got the distinct sense that I was getting screwed over (maybe falsely or maybe accurately, I will never know). For example, it is common in Canada to not even advertise salary ranges in the job ad so if you can't find out such information from somewhere else, you are completely in the dark. If I feel that the process is fair and I understood their metrics, it would make everyone a lot happier. But some employers don't see it that way. Well it is their loss!

Parker, that's a "chip on the shoulder" commentary, and unfortunately the way it works out is that you will be the one who has the loss. You'll lose out on offers, lose out on opportunities, if you don't "get" how it works. Salaries are not put into ads. If they were, it would be with the strangest intention. Not to make things clear, but to put a low-price into the ad and see if they can "snag a bargain."

Really, its not all that unethical how it works. Companies don't put the salary into the ad because they want to review all interested parties, with zero attention paid to anything except finding the right person for that job. Then, when candidates surface, and they look good, they'll interview them and in that interview ask about their present earnings. Just assume that you are entering a negotiation, and take it from there. This back-and-forth is just a fact of life, nothing unethical!

Dave

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RLemert
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August 12, 2016 5:06 am  

Then, when candidates surface, and they look good, they'll interview them and in that interview ask about their present earnings.

What do their current earnings have to do with anything?

The only thing the company needs to know is whether or not the candidate's salary requirements are consistent with the range they are prepared to offer, based on the candidate's background and experience and the going rate in their geographical area and industry. After all, a person's current salary often says more about his or her current employer than it does about their actual expertise.


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Dave Jensen
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August 12, 2016 9:29 pm  

Then, when candidates surface, and they look good, they'll interview them and in that interview ask about their present earnings.

What do their current earnings have to do with anything?

Rich, I think you and I have argued this point before. Current salary has NOTHING to do with it if it's a postdoc, because that's not applicable. "I'm presently in a postdoc, and that wouldn't have anything to do with it." Thats a valid response.

But of the two questions, 1) What is your present income? and 2) What do you need to make to take this job? --the only valid question is the first one. You can't legitimately ask the person what they "need to earn" or what their "expectations" are. So, answering the first question (present earnings) is expected to be a non-issue. You can reply and then ask a similar question of the employer, "What is the range for this job?"

Dave

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RLemert
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August 13, 2016 2:53 am  

You're probably right that we've gone around on this before.

I'm still waiting for someone to present me with a valid argument to justify your first question - for anyone, whether they've been a postdoc or have twenty years of experience. Even if you ignore the "anchoring" effect introduced by giving the first figure, all you're really doing is asking "how much do you think your current employer values you?" Maybe they don't, and that's why you're on the market. Or maybe you have other concerns (an aging parent, for example) that are making salary a lesser concern. Saying "I'm targeting this range" cuts to the chase without introducing a lot of extraneous b.s.

Whenever this topic is discussed in other forums, responses generally fall into two camps. Recruiters all seem to say they need the information, while job seekers agree that it's no one's business but their own. When pressed to justify their demands, the recruiters either say "our clients demand it" or "I need it so I can tell how much you're worth to my clients." The problem is, what really determines what a client is worth to a company is his or her ability to solve the company's problems, and that can only be judged by looking at their skills and abilities.


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Nate W.
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August 13, 2016 6:53 am  

I have always followed the advice that it is always best to delay any salary negotiation (or answer any questions about compensation) until after all the interviews have been conducted. Traditionally, a company will select a candidate and make a written offer. Then the negotiation often begins.

However, in recent interviews, I have noticed that companies no longer follow this protocol. Often and adamantly, a HR representative, not the supervisor with the knowledge of budget, will expect candidates to partially negotiate compensation before the interviews take place. Despite a candidate's best effort to deflect salary questions, this person often expects an answer to both questions about salary expectations and history. Thus, my questions are:

Why have companies changed their tactics on salary negotiation?

Why are HR so adamant in having these questions answered before the interviews take place, especially if they don't know what the budget is for the position?

In using this tactic, don't they realize it will only potentially perturb both parties and sour the rest of the interview?

If a candidate wasn't selected based on qualifications, wasn't it a waste of time to get these questions answered beforehand?

If the company has a first offer best offer policy, why ask these questions beforehand?

Some academic employers have departments known as wage and compensation groups that set salaries and they can often overrule the supervisors on salary offers even when the offer is well within the budget. What do these departments do and why should they have so much power in salary negotiations?


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Dave Jensen
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August 14, 2016 11:07 pm  

You're probably right that we've gone around on this before.

I'm still waiting for someone to present me with a valid argument to justify your first question - for anyone, whether they've been a postdoc or have twenty years of experience. Even if you ignore the "anchoring" effect introduced by giving the first figure, all you're really doing is asking "how much do you think your current employer values you?" Maybe they don't, and that's why you're on the market. Or maybe you have other concerns (an aging parent, for example) that are making salary a lesser concern. Saying "I'm targeting this range" cuts to the chase without introducing a lot of extraneous b.s.

Whenever this topic is discussed in other forums, responses generally fall into two camps. Recruiters all seem to say they need the information, while job seekers agree that it's no one's business but their own. When pressed to justify their demands, the recruiters either say "our clients demand it" or "I need it so I can tell how much you're worth to my clients." The problem is, what really determines what a client is worth to a company is his or her ability to solve the company's problems, and that can only be judged by looking at their skills and abilities.

It's all great to live in an ideal world, and so forth. We have so many "This is the way it should work" posts on this forum.

I don't live in that world. I live in the world where the employer will NOT PROCEED with candidates unless they know something about present comp. Giving them that information may also be accompanied by reasons why that salary doesn't matter (as in your examples) but the fact remains that most companies will remove people from their early consideration who play games with this very legitimate question. No questions asked -- "You don't tell one of my people what you earn, you're out of the process."

Sure, we can try to get the real world to change, as that law in MA is attempting to do. But as I said in an earlier post, all that will do is corrupt the process, ensure you get a low-ball offer so that the company can then legally say, "Tell me about your current compensation." I don't like it either, but this is the way that employment works.

What's the purpose of the forum, to tout the ideal world? Or to tell it like it is? I see it as being partially about trying to change things for the better (we do that here Rich) but also about ensuring that those entering the job market know how it works, today, in it's ugly side as well as in an idealized future.

Dave

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RLemert
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August 14, 2016 11:58 pm  

But as I said in an earlier post, all that will do is corrupt the process, ensure you get a low-ball offer so that the company can then legally say, "Tell me about your current compensation."

But then, why would someone want to work for a company like this? They've just demonstrated that they consider their employees interchangeable commodities rather than human beings to be treated with honesty and respect; what are they going to do if they manage to get you on board?


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