Thursday, April 17, 2014

Why I can't help PMs, Sales People, or Marketing folks negotiate

Occasionally, I'll get a sales person, product manager or program manager, or even a marketing person ask me to help negotiate their compensation package. With one exception, I invariably turn all of them down. The reason is this: negotiate is a core skill for product managers, program managers or sales people, while the core skill for engineers is being able to design and code, with negotiation being secondary. In fact, one of the ways an engineering manager adds value to an engineering team is negotiating on their behalf with other engineers and with product management and/or UI designers.

If you look at how we train engineers, it's pretty clear that negotiation is out of the picture. Engineering exams aren't graded on style, readability, or collaboration. They're graded on correctness of solution, ability to apply principles and data structures to new areas, and of course, whether or not your project works. What negotiation there is in the engineering curriculum is informal: you might be asked to work in teams to turn in your homework (as a former instructor, I can say with confidence that this is usually so that we only have CLASS_SIZE/N papers/projects to grade, rather than CLASS_SIZE). As a result, engineers are singularly unprepared to negotiate their compensation in a way that sales people, PMs, or marketing types are not.

There's also a fairly subtle effect going on when engineers negotiate their compensation package. Most engineers are in a position to find a new job only because they're unhappy with their old one. Why are they unhappy? Usually it's because the old position did not make full use of their abilities: either they've been stuck in a junior position for years (I've heard horror stories about engineers at Google being stuck at SWE 3 for 5 years, despite performing way better than their grade), or because they've not been given raises, or both. In these cases, usually the managers have consciously or unconsciously beaten down their egos and repeated told the engineers that they're not worth much in the market. One of the things I do is to get such engineers to interview and receive multiple offers. The change is almost immediately visible in such candidates: they gain confidence as they realize that they are valuable employees, and this has an effect when they negotiate. The extra confidence enables them to negotiate and get better deals from their employers. Sales people, product managers or program managers, for whatever reason, seem to be immune to such beat-downs, retaining a healthy ego even when consistently denied promotions.

My negotiation service is unique because it's an irrational thing to do. The real money in compensation negotiation is on the other side of the table. Recruiters and head hunters get 30% of your salary (i.e., your entire engineering salary for a year * 0.3) for getting you to join their client companies. That's why there's no competition for what I do. There's no engineer who'd be willing to match what corporations pay in order to get a better deal.
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