I wrote a thread today on how to think about job offers. Turning it into a blogpost

/threadstarts

Whenever I find myself repeating the same gyaan, I turn the gyaan into a blogpost and share

(so that I can share the link next time, instead of spending half an hour saying the same thing)

1/n

This is not a thread about how to think about job switches. If you want help there, you can check out: On job switches

This is also not about how to negotiate during a job hunt. I wrote about it here: How to negotiate during a job hunt

This is more around how to think about the actual offer

2/n

Note: I hate giving absolute advice. Because no two situations are the same, and how I think about my life & career will be different from how someone else does

Hence I like talking in frameworks instead

^ I am writing a post on this. But lets come back to the main topic

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So the first question people ask me (3 people have done so in the last 24 hours ) is whether they should accept the offer or negotiate further

I always encourage to negotiate but also ask them to keep in mind a few factors while doing so

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First, what are the variables which determine how much leverage you have

(1) You

How good are you? How did you do in the interviews? How many offers you are? Are you underpaid or overpaid currently? Are you someone who is worth fighting over?

Are you differentiated?

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(2) The company itself

Is it funded? How much do they pay for the role you are applying for? Are they understaffed? Are they hiring aggressively and don’t mind paying more? Do they negotiate generally or are they very firm with their offers?

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(3) Market conditions

What is supply and demand like? In a condition like today’s, many people will be fighting for the few open positions available. If it was like a couple of years back, then candidates would have the upper hand

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(4) Champions

Who all are championing your case inside the company? Is it the TAs who are fighting to get more people in, so that they meet their targets for the year?

Is it the hiring manager who is desperate for addition folks?

Other senior folks?

Maybe even the CEO?

8/n

Your leverage depends on all of the above. The more info you have, the better your chances of negotiating further and landing a offer you want

Hence there is no perfect answer to ‘Is this what people get paid? Should I aim for more?’

9/n

Now regarding the offer in hand,

Should you be optimising on Options or the In hand salary?

Should you ask for a bigger joining bonus?

The answer to above also is ‘Depends. There is no perfect answer’

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Instead of worrying about individual salary components, I ask friends/juniors to ask themselves whether

They are in a downside protection mode OR Trying to maximise their upside

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A mid stage startup job, with a good in hand salary will help you protect your downside. Downsides being losing that job, having to take salary cut later, starting fresh somewhere else with a low in hand salary etc

But it won’t give you much upside too

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Now compare that with an early startup which will let you load up on ESOPs

You would get into the job, hoping the startup would 100X its value, and let you retire after 10 years

So think about Risk–Return trade off and decide

13/n

It does not make sense to fight on in hand salary at an early startup if you can have asymmetrical Risk Reward

Risk being losing your job and the in hand component while reward being never having to look for another job ever again

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There are only a few alpha bets you can take in your life

alpha = return compared to benchmark salary

If you want to generate more alpha, you join early and load up on stocks, and hope your growth is better than the market growth

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The desire to generate more alpha means risking high beta too

beta = volatility compared to benchmark salary

A few failed alpha bets, and you might end up with a far lower salary than the benchmark market salary

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I am giving analogies of investing when discussing salaries with great irony considering my stocks are down 26%, and MFs 8%

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Wrapping up, you should use the 2 frameworks mentioned above to think about ESOPs and In hand:

  1. upside maximization vs downside protection
  2. alpha generation

Regarding other components like joining bonus, and retention bonus,

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tbh most companies don’t care because it is a one time thing and it does not get added to your CTC technically

So you should definitely load up on them, ideally on the joining bonus, if the recurring in hand salary seems less to you and there is more room for negotiation

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Most people don’t negotiate on the clauses which accompany these bonuses but you should

Some companies will put clauses like ‘stay for a couple of years else return the money’

Fuck that. Ask for 6 months and later settle for 1 if needed (which is generally the standard)

20/n

Hope this helps!

/end

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