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So you got a couple of job offers, how do you negotiate from here?


I just interviewed a solid QA candidate.  She seemed qualified for a job and had the right experience.  It was no secret that she was interviewing in multiple places and got several offers because she deserved it.

We started putting together an offer on the upper end of where we felt that she would land.  The other company being a less exciting startup came in with an offer that was greater than ours because, frankly, they had to.

That is the awkward situation where the candidate has to call someone back and say: “I am getting a better package from another company, what can you do on your end?” The moment is awkward because we, engineers, generally are not used to going back and forth.  We have an answer and some data to back it up, the negotiation game makes everyone uncomfortable.

What happened next?  Next, we matched the offer.
Later on we got another call: the other company is beating this offer by $8,500.  The candidate said that she thought that we were a more exciting company to work for, but the eight grand made it a difficult choice.

At that point I made a decision that we are not going to enter a bidding war and said that the more interesting job was there for her, but the numbers are going to stay the same.  Internally we actually became a little indifferent to her accepting the offer and already started scheduling interviews with the other eight candidates we had in our pipeline.

Why did that happen? How can you handle it better in your own job search?  Number one thing to do is to understand what happens on the other end of the table.

After interviewing multiple people the hiring manager generally has one or two best candidates to move forward with.  While interviewing can happen in parallel with multiple folks, once you start the job offer you are operating serially.  You can’t have two outstanding job offers and have both of them accepted.

The hiring manager goes to HR and they get an approval to put together a package.  If the package exceeds the budget for a particular position you generally need to get an executive approval for expanded budget.  Exec approval takes time and follow-up.  If you need to do it several times over several things happen: first - you are going back for more money constantly, second – you start wondering if you are being taken advantage of.  Lastly you start wondering if you are getting a technology enthusiast or a professional negotiator.

I understand and fully support people getting what they deserve.  So what’s the best way to handle multiple offers?  My advice is to say this: “Hi, I want to let you know that I am getting multiple job offers.  I don’t want to go through several rounds of negotiations – you probably don’t either.  In the interest of making this easy on everyone could you please put together your highest and final offer? I am asking other companies to do the same.  By the way, the general range for a person with my experience and knowledge is: X to Y.”

This makes the exercise a blind auction, which is a better overall experience for people involved.

If you have a better strategy, let me know – feedback is welcome on twitter @mikebz and elsewhere.

Comments

Gayle said…
The question is - DID she handle it poorly? Was this a bad outcome for her? Okay, so you became indifferent to her accepting the offer. But it's still her offer, for her to accept or deny. I doubt that that indifference would make a big difference if/when she started.

It seems that from the candidate's perspective, she had a pretty optimal outcome. She wound up with the highest possible offer from both companies, and could make a decision accordingly.

Blind auctions, on the other hand, wind up with sub-optimal outcomes for the candidate and the company. You don't want to offer your true max, because you might not need to give that much. But if you undershoot, you may wind up losing a candidate who you could have gotten. The candidate, likewise, may accept an offer at a different company simply because they didn't want to go back and forth.

I think the way that this candidate handled it was the way to go.
mike b. said…
Thanks Gayle! I actually had a couple of conversations about this with other folks to read the post as well. There is also another reason why a blind auction is bad for the candidate: we sometimes put values on things comparatively. For example a house might be worth a million because someone else is willing to pay a million for it. So an open auction actually bids up the value. Question is - how do you handle this and still convey that you are excited about the job. It's a tricky situation either way.

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