How to Negotiate a Big Tech Offer as a Software Engineer - with @RahulPandeyrkp

there are four primary components to compensation step number one is you should negotiate especially with these big tech companies now the question is how did i negotiate the big thing here is you need to have leverage the way you have leverage is like i'm gonna tell the recruiter and i have this done this once let's not give a higher offer i'm not that excited about this candidate hey this is gary with the pragmatic engineer negotiating your offer is one of the highest leverage things that you can do for your career i've been a hiring manager at uber i've extended dozens of offers and for this video i've invited rahul pandy staff engineer at facebook who also runs a popular youtube channel subscribe for his channel below now rahul graduated from stamford he worked at a startup that got acquired by pinterest a year later and after a few years at pinterest he interviewed and got a bunch of offers at hand which he then negotiated we're both gonna share our insights rahul his advice on what work for him and from the hiring manager side i'll share what i've seen work for candidates please like this video and subscribe to this channel if you'd like to see similar content on software engineering and engineering management all right rahul great having you on this channel today we're going to be talking about negotiating compensation as a software engineer in the us and i'll time in some things about europe so before we start i just want to do some rapid fire questions when was the last time you were on call and how many times did you get paid yeah i work on a calling product at facebook we have a lot of incidents or anomalies whenever there's a holiday the last time i was on call i believe it happened during easter time so i did get paid more than usual five or six times and just to answer the question staff engineers do go on call at facebook right yeah yeah most teams regardless of your engineering level there is an expectation that you're gonna be on call so no one's like above that awesome what was the most number of parallel job offers and like one job search that you had on hand right before joining facebook in 2017 i had six offers and you know actually throughout my time at stanford and then even after graduating from stanford back in the day i had another lengthy interview session i had five offers at that time the maximum number was six we're gonna have to dive into that for sure last after five question what is a piece of advice that changed your life the piece of advice that i really try and follow every single day is be input driven not output driven rather than being disappointed by the outcome of okay i didn't lose weight or i didn't have this big product which is used by millions of people be much more input driven and input driven means i put in half an hour a day building out this program i spent half an hour a day going to the gym i can control that right i can't control the outcome if you have this mindset up i can control the system the inputs that go into it but i can't really control the output i think you're gonna be much happier and actually in the long run you're gonna be much more productive let's jump into compensation you have had six offers on hand at some point in silicon valley can you talk me through on what compensation means because what i found especially coming from europe the compensation for most people means salary the way i think about it there are four primary components to compensation and base salary the annual salary you get is one of them right the other three are an annual bonus which many companies might have a sign-on bonus which especially larger companies are going to typically have some sort of sign-on and then also equity which is like a big variable factor at a startup you might get options and then at larger companies you're going to get rsu's or restricted stock units which are basically like a free stock in the company depending on how long you've been there and also there's arguably a fifth component as well which is like perks like a lot of the companies in silicon valley will have free food right or like laundry or whatever else you might think of i didn't consider that too deeply in my process just because like at least the companies i interviewed at were all fairly similar there wasn't too much variability in that category but there certainly is a lot of variability on the other four categories depending on the stage of the company one of the things i really learned throughout my experience is that it's important to know where is the company willing to move right because like if you phrase the conversation with a creator as hey what are the different levers in the compensation package that's where you can start to have a more nuanced discussion about like what is important to you and what is important for the company so for example many of these big companies may have fairly well-defined bans about base salary so like you're coming at a certain level you really don't have that much wiggle room up or down because you're pegged to that level but equity might actually be something where they could go much higher if you care about that if you have some sort of leverage or if you really express to the company that this is something that will make or break the deal for you so depending on kind of what you're interested in and also what the company is able to move on that can lead to a lot of negotiation well i'm very familiar because uber does have these same things except in europe we did sign on bonuses a lot less in amsterdam and we're in amsterdam we did do it for people who asked for it most people didn't know or didn't have competing offers what not but in europe before i joined uber my view was typically well there's base salary and you might get a bonus maybe 10 that's really good and this was kind of it i started to appreciate equity when i started to read about the equity that's in the us but i never thought that this would come to europe it is now coming actually like not the same amount as you would get in silicon valley but a large amount compared to traditional europe and the interesting thing is a lot of european engineers absolute discount equity so the us-based recruiter who came to amsterdam to hire engineers and uber did like pretty decent equity packages told me that people just didn't care they're like well we're giving rsu's and they're like can you just give me five grand more and base salary especially when it's options people get really scared and i think there's two reasons for a phone people just don't know and second there there have been not many exits in europe the biggest exits are actually us companies hiring in europe how important is equity in places that you work equity is probably the most undervalued aspect of these negotiations because i think it's what you said right there's a lack of awareness about how does this actually work especially options you start getting into a more complicated territory because you have to pay some amount of money in order to be able to exercise that option right with rsu's it's a bit more straightforward but still i think people just don't know about this form of compensation and i think that's the biggest mistake i see people make especially in more senior roles in silicon valley what you'll find is the majority of compensation will actually come from equity from stock rather than from base salary so that should give you kind of a good perspective that there's so much more variability and so much more opportunity for your equity to actually grow right if you especially if you believe in the company that can really be a huge way to increase your total compensation if you understand how it works i'd love to hear how you went about negotiation what kind of ideas helped you how did you find that information ultimately how did you negotiate that six offers how did you get six offers like that's insane let me start by saying first off that you should negotiate you know there's an article by patrick mckenzie who's at stripe now and he's pretty well known in the blogging world but he wrote a really long and detailed article about negotiation the way he described it is put yourself in an uncomfortable situation for half an hour and you might actually end up getting fifty thousand dollars or a hundred thousand dollars more it's obvious that anyone would want to do that right like just half an hour of discomfort but it's not public no one's like judging you right you actually have a pretty high chance of meaningfully improving your quality of life so why wouldn't you step number one is you should negotiate especially with these big tech companies now the question is how did i negotiate the big thing here is you need to have leverage the way you have leveraged is by having competing offers the way you have competing offers is you need to make sure that they line up at the same time so you need to plan out your interviews such that they actually happen at roughly the same time so you can get offers at the same time right one of the things that i feel like people often mistake is that they don't know how to maneuver the interviews such that they happen at the same time the big thing here is just be transparent so when i was going through the process before joining facebook i literally told every recruiter that hey i'm talking to you and i'm excited by the work that you're doing but i'm also talking to these other three or four or five companies and i'm going to spend 40 50 60 hours a week with you that's a big decision in my life and i want to make sure i feel good about the decision and so therefore i really want to collect all the data and i won't be able to commit to you until i actually finish the process with these other companies and so i feel like having that really transparent conversation with the recruiter and telling them that this is important to you collecting the data and making a good decision is good for you and good for them i feel like almost every recruiter kind of understood that they were receptive to me telling them to wait or accelerate the process based on the timeline how many places did you apply to to get those six offers in the end because you probably didn't get an offer from every single place right yeah i i'm happy to be transparent about that i think i applied to nine companies total and then after one round of interviews i kind of turned down one company because i was like geographically it was like too far away i didn't want to commute that far just pre-covered there were two companies i didn't get an offer at and then the other six i did get an offer you've got a really good track record i also have a pretty decent tracker back in europe i'll talk about it in a separate video but just to give a bit of reality because i think a lot of people will be like that's insane i have recently mentored an injury manager who actually in the end got offers from the likes of like discord ribbian google a couple other companies he got like five offers but he started with 40 places and he did it full time he loved his job and for two months he interviewed full time and he showed me the list of all the rejections he started to get more offers once he got his first few offers i'm going to share a little bit on what's happening in the hiring manager i said because i was doing this for years at uber what you said about negotiation is absolutely true so when you negotiate you typically negotiate with the recruiter as a hiring manager we don't care too much so recruiters are used to negotiating they know what they can and cannot but jon i had a video on what actually happens behind the scenes when you get an offer recruiters typically at these large companies work with central compensation teams to give them numbers based on the input they have and if they tell them this candidate has outstanding offers or is looking to get offers there the central comm team might give them higher offers and for larger companies you're right base salary is typically pretty fixed bonuses what you're eligible for is are also fixed the sign-on and the stock is where there is room for negotiation as as you said you need to have leopard now the interesting thing is that it's always better to negotiate with the recruiter about compensation because they're used to it if you get a hiring manager on the call and you start negotiating with them we're not used to negotiating that much in general you have nothing to lose i have not seen an offer resigned it at my four years at uber so we never said like oh you're asking for more we're gonna take it back there was one point where i got like slightly upset where there was this person who like kept toying with us kept asking for more we gave him a bit more asking for a bit more but it wasn't really transparent in the end we just put a saying like you have a week to decide definitely i think with this kind of negotiation the stakes are high right like at least for you so i think the ground rule here is always do it respectfully make sure you communicate with the hiring manager the recruiter even if you end up not joining the company if you have five offers you're not gonna join five companies right so you wanna make sure that with the other four companies you leave it in a way that they respect you and you respect them then the other thing i wanted to mention was that you talked about how like you've never heard of offer rescinded i think that's 100 true because it would almost be irrational for the company to rescind an offer at these big tech companies you have like a phone screen maybe two phone screens then you have an on-site interview where you have like you know six seven hours of meetings with different people at that point they've invested literally thousands of dollars of time into getting to know you and you are one of the i don't know five or ten percent of people who have actually made it through and have received an offer so for a company like pinterest or uber or facebook to actually say hey you know you're causing too much hassle for us we don't want you anymore because you're asking for a little bit more equity it just would be totally irrational right as long as you're doing it respectfully so i feel like that's like one other thing to kind of keep in mind as you go through the process that is so important because i will tell you as a hiring manager so hiring managers do have a say so ultimately the recruiter is working for me i'm gonna put it very bluntly i have the head count i need to fill it and i have a recruiter assigned to me gonna help me fill it and that is a recruiter's goal by the way and that's why the recruiter is on the candidate side they will actually advocate and they'll take care of the negotiation they'll push as much as they can but if we're on a call and i feel that this person is not really positive about the company and they're just in it for the money i'm going to tell the recruiter and i have this done this once let's not give a higher offer i'm not that excited about this candidate if only they would have been a bit more positive on like hey that they're excited by the team what not and that was missing and again offer was not recited we just we didn't increase i actually said like well they told us this other company has a higher offer if they're going for the money yeah they'll not increase let's see what they choose i'm not saying to be super positive when you're not because if you're not excited a company it is money as well but it's not just money would you really want to work at a place where the hiring manager and the team who interviewed you don't feel a connection in fact you disliked a few people and my answer should be run yeah yeah i mean it's it's not it's life is too short yeah if you're spending you know a full 40 50 hours a week with people who you don't respect or they don't respect you that's definitely not a place that you want to be no matter how much you're getting paid so i think it's definitely kind of a tactical and correct way to go about this one tactical thing i can share here is that throughout the process i would often get on the phone with their recruiter and i think oftentimes or the hiring manager and oftentimes they would want to kind of gauge how i'm feeling it's okay here are the new numbers like tell me what you think and almost always the correct answer there is interesting okay like let me think about that that's that's very interesting um and the reason i i say that is because there's a huge information asymmetry right the recruiter has hundreds or maybe thousands of data points about what is a competitive offer for your level whereas you maybe have one or two or maybe you could look on glassdoor to get a sense of it but it's it's hard to really get a don't look at the customer um classroom is outdated but yeah yeah and it's actually very hard to get a concrete sense other than the actual numbers you have right and so yep and and but and the numbers are updated so like i will say within the company numbers are updated every now and then as a hiring manager i learned about the new numbers as they came in because uber and other companies they buy the market data they ask what the candidates are and you're right it's information asymmetry my negotiation tactic i do was also i got a really good offer and i said it's interesting let me think about it and let me get back to you let me talk it through with my family what not yeah and then you go upline the other advice is if you know people who have gone this ask them they'll be better sources of advice than the internet yeah you know these youtube videos like that we're doing they're good but having someone who's local i think your advice absolutely stands for silicon valley it will stand for some other metropolis areas it might not stand for certain other regions fully yeah saying interesting seeing something non-committal on the phone and then also introducing artificial delay like i think what you said is like let me talk to my family that's great like i would say let me talk to my my wife let me talk to my my parents and get their advice so like that way these phone conversations are often high pressure and you want to actually take those and make them asynchronous i always did all of my like here's what i would like i did that over email because i can then control the tone i can control exactly what i'm saying and there's no kind of pressure to like immediately commit to something right that was the one by the way you're you're fully right when i was on these calls because i i did usually recruiters do these calls that's interesting hiring mention another but i often shadowed them and i sometimes did some of the calls i insisted on presenting numbers and we do want people to close we do want to have a healthy pressure so typically you do the number and you say we ask them what i used to do how do you feel about it yeah and what would it take for you to do a commitment and we want to push them because ultimately we cannot keep the position open forever i want to get a sense of how excited this person is it's not about bullying them i do want to get a sense and if i feel that they're a bit uncertain i want to address it i know that if they commit they will mean it there's nothing wrong with what you're saying asking for time that's the best thing you can do like i'm kind of speaking against the hiring managers right now but it's true because you want to be happy with your decision i think the worst thing you can do you sign and you say like oh damn yeah i have second thoughts and i got a better offer i'm gonna break the contract no one's happy with that yeah no one wants buyers anymore it's like the worst thing that can happen is you sign on the contract and then a week later you say actually i don't want this anymore you'll lose all respect on both sides i always try to push away from committing anything verbally i always want to do that in writing over email where i had time to process and think the last thing i'll mention here is that it's not a zero-sum game in the sense that like me as a candidate if you say i want you know 10 more equity it's not like that equity is coming out of your pocket or the recruiter's pocket right at these large companies like the ones that i interviewed at which were you know silicon valley based and i'm sure you know at uber in europe it's similar it's like they have a very large pool of equity or compensation that they can dole out and it's not like it's hurting anyone right so like you shouldn't have this fear that i'm going to be judged or i'm going to be hurting someone else by asking for more these big companies have pretty deep pockets and they they're happy to pay an extra 10 or 20 it makes no difference to their bottom line for one candidate to get an extra 20 or 30 percent compensation yeah i'll tell you a secret if you're at a startup that just raised two million dollars and that's their whole funding and you know you're asking for an extra 20k more as the ceo they will be thinking you know you're you're shrinking the pie at uber we did not have budgets we had head counts right it did not come out of budget if this person got an extra you know like 100k or 50k in equity you're right it didn't matter so i'm just like plus winning everything that you said which i think is pretty cool because we're we're saying it from the both sides well thank you so much rahul for coming onto this channel head over to our whole's channel to watch the other part of our conversation which is about getting promoted at large tech companies and also your story of how you got to the staff level so see you there yeah thanks for having me i really appreciate the time and i think that this has been a really informative conversation for me as well [Music] you

Channel: Pragmatic Engineer

Views: 65,132

Keywords: how to negotiate salary after job offer, salary negotiation tips, salary negotiation, salary negotiation techniques, how to negotiate salary, software engineer salary negotiation, salary negotiation skills, how to negotiate a higher salary, salary range, software engineering salary, salary negotiation after job offer, salary negotiation in interview, facebook salary negotiation, uber salary negotiation

Id: cbngWLr7BC4

Length: 17min 17sec (1037 seconds)

Published: Wed May 12 2021