While hiring for your startup, you thought “let’s make an offer at $80K but be willing to move up if they negotiate”. Stop. Don’t negotiate.
A lot of candidates expect to negotiate because they’ve been conditioned to play the game by other companies, mentors, advisors, etc. You shouldn’t hold this against them; in fact, you should appreciate their extra effort and be flattered by their desire to negotiate — it means they are interested in joining your company.
But for everyone’s benefit and your own sanity, don’t negotiate, because
You don’t have the bandwidth.
Your brain cycles are already over-committed, trying to micro-optimize the extra 0.2% cash-flow is a waste of your brain. If negotiations go back and forth over the course of a week, it wastes time and precious energy for everyone. Wouldn’t you rather be building the next big thing with them instead of haggling?
You should be confident about your decision to hire.
Don’t build your 10% uncertainty about the new hire into their compensation. Make strong offers to people that you’re 100% confident about, and show that by offering them 100%.
You will sleep better at night.
If they don’t take your offer, you will sleep better at night knowing that you did everything in your power to make it happen.
You can’t spell negotiate without ego.
Negotiating with a candidate can signal that you doubt the value they bring. You want to be on the same team as them. Don’t start your relationship as an adversary.
The middle ground might make both parties unhappy.
If you “meet in the middle”, your new hire might still feel underpaid, and you’ll feel like you’re overpaying them. This creates a bad disconnect for every compensation conversation in the future.
You are not good at negotiation, and neither are they.
Your talent is building a company. Their talent is to help you do that. Don’t waste both playing a meaningless game that neither of you are good at.
It’s just more efficient.
Not negotiating means that you can double your efficiency, by turning a 4 step process into a 2 step process.
Here are some ways to avoid negotiation with good outcomes for both the company and your newest teammate.
Make the best offer your company can, and mean it.
Don’t make offers with the promise of a raise. You have no idea what your company looks like 6 months from now, don’t promise something you can’t deliver. If the candidate doesn’t trust that your company rewards individual performance fairly in good times, then they shouldn’t work there.
Be as transparent as possible about how you came up with the best offer, and why it is the best you can do. Eg: “We looked at industry data from 100 companies and this is 5% above the average salary for this position” or “This is comparable to other senior engineer salaries at our company.”
Do you agree? Do you strongly disagree? Leave a comment about it!
A lot of candidates expect to negotiate because they’ve been conditioned to play the game by other companies, mentors, advisors, etc. You shouldn’t hold this against them; in fact, you should appreciate their extra effort and be flattered by their desire to negotiate — it means they are interested in joining your company.
But for everyone’s benefit and your own sanity, don’t negotiate, because
You don’t have the bandwidth.
Your brain cycles are already over-committed, trying to micro-optimize the extra 0.2% cash-flow is a waste of your brain. If negotiations go back and forth over the course of a week, it wastes time and precious energy for everyone. Wouldn’t you rather be building the next big thing with them instead of haggling?
You should be confident about your decision to hire.
Don’t build your 10% uncertainty about the new hire into their compensation. Make strong offers to people that you’re 100% confident about, and show that by offering them 100%.
You will sleep better at night.
If they don’t take your offer, you will sleep better at night knowing that you did everything in your power to make it happen.
You can’t spell negotiate without ego.
Negotiating with a candidate can signal that you doubt the value they bring. You want to be on the same team as them. Don’t start your relationship as an adversary.
The middle ground might make both parties unhappy.
If you “meet in the middle”, your new hire might still feel underpaid, and you’ll feel like you’re overpaying them. This creates a bad disconnect for every compensation conversation in the future.
You are not good at negotiation, and neither are they.
Your talent is building a company. Their talent is to help you do that. Don’t waste both playing a meaningless game that neither of you are good at.
It’s just more efficient.
Not negotiating means that you can double your efficiency, by turning a 4 step process into a 2 step process.
Here are some ways to avoid negotiation with good outcomes for both the company and your newest teammate.
Make the best offer your company can, and mean it.
Don’t make offers with the promise of a raise. You have no idea what your company looks like 6 months from now, don’t promise something you can’t deliver. If the candidate doesn’t trust that your company rewards individual performance fairly in good times, then they shouldn’t work there.
Be as transparent as possible about how you came up with the best offer, and why it is the best you can do. Eg: “We looked at industry data from 100 companies and this is 5% above the average salary for this position” or “This is comparable to other senior engineer salaries at our company.”
Do you agree? Do you strongly disagree? Leave a comment about it!
Vinayak Ranade
Bartender / Founder at Drafted
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