My Journey from Econ PhD to Tech — Part 3: Negotiations part 1
Links to other parts of the series:
I know that for a lot of PhDs going into tech, the moment they got their first job offer, they pop a champaign and sign it. But that is terribly, terribly, terribly wrong — your negotiation has just started. Only 1.2% of the US population has a PhD, not to mention a PhD in a specific discipline (e.g. Econ) and specific topic (e.g. housing) and from a top program. It is not your fortune to have the job, it is the firm’s fortune to have you! If you were an undergrad or even a master student, I might not be saying this to you, but for PhDs, you really have a lot of bargaining power in the negotiation process. You have done hard work, and achieved amazing things over the past 4–10 years, and you shouldn’t sell yourself short.
To let you know that negotiation can make a difference: my final offer from Google has a first year total comp of $300.3k, with an average annual comp of $263k/yr for the first 4 years. As far as I know, the standard Data Science offer from Google is $220k/yr. — that’s a whole $40k/yr increase!
I know what you’re going to say — “but I don’t actually need that much money”. I want to say, as an econ phd, you really should understand that the problem of expanding your budget set (i.e. earning the money) and the problem of optimally allocating resources (i.e. spending the money) should be considered separately. All else equal, it is always better to have a bigger budget set, because freedom is power. — It means I can expedite the process of buying a home and having kids, it means I can help with my parents’ retirement, it means my kids can worry less about student loans — even better, with that money in my hand, I can choose which cause to devote it to — be it investing in a start-up or donating to a charity whose mission I deeply agree with.
I know what you’re going to say next — but what if negotiating makes them revoke my offer, or make my hiring manager think I’m greedy? — wrong, wrong, wrong, completely wrong. First, you talk with the recruiter, not the hiring manager, about money, who is merely a mediator between you and the comp team. Even when you bring the hiring manager into the negotiation, you don’t directly share your ask with her/him, but ask her/him to advocate for you. Second, firms don’t revoke offers, unless you’ve done something ethically wrong. Third, negotiating won’t harm your relationship with the firm and it won’t make the hiring manager have higher expectations for your job performance — firms have a standardized evaluation process that they won’t change for individual employees. I’m going to talk more about this later, but the negotiation process is actually an information revealing process — it shows you how much the hiring manager/team is willing to support you. Plus, the squeaky wheel gets the grease — be it more money, or more resources / better projects / location flexibility after you’ve started your job. Advocating for yourself as early as possible in the relationship will only set you off on the right foot.
Uber Offer
On Sept 15 Tue I got my first offer from Uber. 3 days later on Sept 18 Fri the recruiter called to share the offer details: $145k base, $23k annual targeted cash bonus (meaning that if you ‘meet expectations’ you’ll get that much, and if you exceed expectations you may get more), $255k new hire equity grant vested over 4 years (for most major tech firms, the new hire equity grant is vested over 4 years), no sign-on bonus, which brings the average annual comp to $231.75k/yr.
I was honestly pretty positively surprised when I got the numbers, because:
- I went on ejmr (a website where econ phds talk about job market rumors) and found that people who went into tech reported on average $180–220k/yr comp
- I went on glassdoor and levels.fyi. Glassdoor’s info isn’t accurate because it often doesn’t include equity. Levels.fyi is better, but you can’t tell if someone is a PhD. But based on those two, $232k is on the high end for entry level DS jobs
I then messaged a bunch of friends to ask if this is a good offer, and got very different opinions:
- One econ phd friend said ‘$270–280k is pretty doable; $300k is hard’
- A teacher from Laioffer said ‘looks like a standard fresh grad offer’
- Anthony’s brother, who is a product data scientist at Facebook said ‘yeah it’s pretty awesome’ (but he doesn’t have a PhD)
So I again have no idea whether it’s good or bad. It’s hard because PhD is a very tiny demographic group, and there is very little data out there in the open. For anyone who’s talking on a forum (e.g. ejmr), you don’t know which job market they are in (e.g. even Seattle and Bay Area have different wages), which tier of program they were from and which tier of tech firm they went in.
First encounter with Ralph
Just as I was struggling, in a chat with RE, I learnt about Ralph, a start-up that helps PhDs negotiate wage offers. I took a look at the founders’ profile, and was very skeptical — they were undergrads from Berkley/Harvard with no HR experience in tech firms — how would they know anything about tech job offers for PhDs?
Regardless, I set up a meeting with them on Sept 28 Mon. During the meeting, the co-founder Brian mentioned to me that they’ve helped hundreds of PhDs negotiate their offers, which made me realize ‘maybe they can be helpful because they’ve seen real data’.
I went ahead and paid the deposit, and scheduled the onboarding call with them on Oct 1 Thu, but walked away being skeptical again —(1) the data points they mentioned just sound completely out of range, which made me think maybe they’ve been mostly helping CS/engineering PhDs going into tech as Research Scientist, which is a completely different market (their numbers can go up to $400–600k/yr), and (2) when I mentioned that Uber has given me a Oct 9th deadline, they said I should ask for an extension until Christmas, and then Uber will probably give me Thanksgiving, which again sounded completely crazy to me at that time — spoiler: I eventually gave my decision to Google, Uber, Zillow, Quora after Thanksgiving. (3) at that time I was honestly just really busy — I had 4 onsites from Sept 30 to Oct 6, and I didn’t think the communication mode — recruiter calls me, I message Ralph, Ralph calls me, I call recruiter — will work.
So I went back to RE to ask if she recommends me to do it or not, since I heard it from her in the first place. RE said, here’s how I’ll think about it: even without Ralph, you can get some increase by optimally using your counter offers and negotiating yourself, so the question is, is their value added compared to that big enough to justify the commission (they charge 15% of the increase of your first year total comp)?
I started googling around to see how much I can learn about negotiations just by myself. I came across Haseeb’s story, where he doubled his salary (from ~$100k to ~$200k) in a month by optimally using his counter offers and negotiating. He also wrote a guide on how to negotiate, after reading which I felt I’ve mastered negotiations. There are also a lot of resources out there online — for example, Candor, a competitor of Ralph, has some resources on their website about negotiations.
I thought, if I can figure out heterogeneous agent macro by googling around, wage negotiations is no different — I told Ralph that I’m not going to do it, and thanked them for their time.
To my surprise, instead of just saying goodbye, they asked to call me to understand my thought process. After learning that I’m not sure their value added is worth the money, they first offered a tip based payment arrangement where I only pay them the amount I think they are worth (which honestly made me more skeptical because my rule of thumb is to always say no to free services), and then offered to set up a few meetings between me and previous Ralph clients. I said no to the tip based model — I said if I use their service I want to be the same as other clients, but said yes to the meetings — always say yes to networking opportunities, is another rule of thumb of mine.
I talked to previous Ralph clients KK and CS on Oct 7 Wed, i.e. right after my 4 onsites, and walked away still not convinced — none of them mentioned any data, i.e. what’s their initial offer, and how much increase Ralph got them. I talked to one last Ralph client, CN on Oct 9 Fri, who is also an econ phd. When I asked her how much increase Ralph was able to get her, she said ‘It wasn’t not too much’, which made me even more skeptical.
At the same time, I was able to get myself out of the Oct 9 Fri Uber deadline just by using the lines I learnt from online: ‘This is a really important life decision. I’m still in the process with a few other firms I’m also excited about. I don’t think I can make a decision just yet because I don’t have all the information I need to make an informed decision.’ — they not only canceled my deadline, but also didn’t set a new one.
Zillow Offer + trying to negotiate by myself
On Oct 6 Tue, the Zillow offer numbers came in: $155k base, no annual targeted cash bonus (this is a firm-wide policy), annual targeted equity bonus of $35k, $150k new hire equity grant vested over 4 years, $35k sign-on paid in year 1, $25k sign-on paid in year 2.
During the first offer call, i.e. the call when the recruiter gave me the verbal offer without numbers, he asked ‘Are you located at Stanford right now and are you planning to stay put’, and I told him about my colocation problem (Anthony works in Chicago), and asked for their remote policy. This time, when he is sharing the numbers with me, he told me that the hiring manager has said I can work remotely even after the pandemic ends — this is a really important piece of information.
After I sat down to do the math, I realized the two offers were too close to each other: At the very beginning, I thought that Zillow’s $35k ‘annual equity bonus’ is paid in a year, which means the Zillow offer has a $242.5k/yr average comp for the first 4 years, or a $262.5 first year comp. But after clarifying with the recruiter, I realized that each of the $35k annual equity bonus is also vested over a 4 year period — so it’s really just the annual equity refresh that every other tech firm has (but major tech firms in Bay Area wouldn’t tell you the amount in the offer), just that Zillow called it a different name…
From what I learnt by googling around, I knew that the counter offer is something to be used at a relatively later stage of the negotiations, not at the beginning — usually, the last step is an ask-and-sign ‘if you give me x more I’ll sign’ and the second last step is showing firm A firm B’s offer and ask them to match, when you want to join firm A but firm B’s offer is higher, so I’m clearly not at that stage yet — not only are Uber and Zillow’s offer basically the same, I also haven’t made up my mind which one to join yet.
On the same day, Oct 6 Tue, I mentioned to AT, a friend of mine who is a software engineer at Google, about my struggle, and he said, one of his colleagues were able to get increases by asking firms to change specific parts of their offer — for example, telling firm A that firm B’s new hire equity is higher than them and ask for more, and telling firm B that firm A’s sign-on bonus is higher than them and ask for more. According to AT, that colleague of him got a $100k increase in total comp eventually.
Convinced by the tips I got from AT, and given that I didn’t gain more confidence about Ralph in my chats with their previous clients on Oct 7 Wed and Oct 9 Fri, I decided to do the negotiations myself. On Oct 13 Tue, I wrote emails to my Uber recruiter and my Zillow recruiter respectively, talking about aspects of their offer that I want to see improved: for Uber, I asked for more base, for equity refresh, and for sign-on; for Zillow, I asked for annual cash bonus, and for more new hire equity grant.
It didn’t work at all — on the same day, the Uber recruiter replied saying (1) Uber don’t share numbers on the annual equity refresh in the offer and (2) to get an increase I’ll need to share with her Zillow’s total comp; the Zillow recruiter replied saying (1) Zillow doesn’t have annual cash bonus and (2) ‘Uber’s stock is a lot more volatile so their equity is worth less than what it looks like. Plus, they just went through a layoff but Zillow did not have and is not planning to have anything like that’.
Back to Ralph + Negotiations round 1
So, despite how much confidence I had going in, the reality is, I wasn’t even able to get passed negotiation round 1. Now that I realized how hard negotiations actually are in practice, I started researching Ralph again, and came across some of their clients’ stories on medium (you can click into Brian Liou’s medium to find more of these). In these stories, there are actual numbers: how much were the initial offers and how much were the final offers. One of their clients was in a very similar situation to me: two very similar initial offers that were both on the low side, and somehow, Ralph was able to get him out of it and get him a pretty decent final offer.
Now that I realized (1) I don’t have the ability to do it myself and (2) Ralph has a track record of being able to do it, I’m ready to sign with them. I added back into the advising WhatsApp group on Oct 15 Thu, and had another call with them the next day, on Oct 16 Fri, where I updated them with my situation (1) I got myself out of Uber’s deadline (2) I now have both Uber’s and Zillow’s numbers and (3) I need help negotiating — I know there are econ phds getting paid $270–280k, and that $300k has happened before (this is something I heard from an econ phd at Stanford) and given that I’m confident I’m at least top 10% of the Stanford econ department, I think that’s a reasonable goal.
The strategy they gave me was surprisingly simple — set a goal, and share it with the firms I was negotiating with, and ask the recruiter to help me get there. This is where their data comes in handy — they can tell me what’s a reasonable ask based on my profile (e.g. work experience or not, internship experience or not, tier of school, firms, etc.) and the offers they’ve seen for my role for the firms I’m negotiating with in this year’s market. Given my aspiration of $300k, and given their data points, eventually we settled on an ask of $325k total comp.
Remember that, I’ve already tried negotiating with Uber and Zillow once by myself, by asking them to change individual components of the offer, which didn’t work. While I was getting Ralph’s help, Uber grew impatient — the recruiter reached out to me to schedule a chat. Luckily, the chat was scheduled after my Ralph advising call on Oct 16 Fri. In the call, I told the recruiter my ask, and said this is a real offer in this year’s market from a firm in Uber’s calibre to a candidate whose situation is similar to mine: both me and him were a particularly good fit with the firm based on what we studied in our PhD. — this is where the $325k data point came from.
The Uber recruiter thanked me for sharing my aspiration with her, but said (1) this sounds very high; she hasn’t seen it happen before and (2) it’s a company policy that they only respond to counter offers with specific number, so for her to do anything I’d need to share my Zillow offer numbers with her (this is consistent with what she said in the email).
I shared the response with Ralph, and they said it’s not surprising — Uber indeed usually pushes to know counter offers, and that our strategy at this point would be to ask Zillow to increase their offer first. Given that, I emailed the Zillow recruiter on Oct 16 Fri asking for a chat, which eventually got scheduled to Oct 19 Mon.
That was by far the most nerve wrecking negotiation call I had in the entire process, because it is the hardest — I was asking for an increase with essentially no real bargaining power ( I wasn’t going to share Uber’s numbers), but it’s also the most crucial — if I succeed at getting Zillow to start moving, then I’ve got the ball rolling — I can then use Zillow’s number to push Uber, and then do an ask-and-sign and I’m done. But if I didn’t succeed in getting Zillow to move, I’m stuck.
I recalled what Haseeb said in his article about negotiations — the best deals are made between friends. — right, I should not think in terms of ‘I’m trying to manipulate the recruiter’, but that I’m trying to ask a friend for help.
Picking up the phone, I started small talking with the recruiter — nothing special, just Chicago VS Seattle weather, and whether it’s better to have ‘when it rains, it pours’, or rains everyday but a little bit every time. Then I got into the main topic: I said, both the Uber and Zillow opportunities are extremely exciting to me — both of them utilizes my unique skillset as a macroeconomist or as a housing market expert. But in addition to the fit with the team or the projects I’ll be working on, an orthogonal, but equally important element, is the money. This is not because I’m greedy or anything, but that I indeed have personal financial needs: my parents just retired in China, and since I’m the only child, they’ll be coming to the US to join me soon, which means I not only need to contribute to my own house, but also their house, and given that my husband and I are planning to have children in the next few years as well, it’s going to be a lot of financial pressure on me.Then, I shared my ask, $325k, and said, the reason why I think this is a reasonable ask is not that I need it due to my financial needs, but that this is how much I’m worth — I told him that this is a real data point from a friend of mine who is also a PhD data scientist who had a particularly good fit with the team.
(In other words, I shared 3 pieces of info (1) I love both Uber and Zillow in terms of the job content (2) independent of that, I care about money a lot, due to my personal financial needs — what’s implied is that, money could make a big difference when it comes to the decision and (3) my aspiration is $325k, and I think I deserve it because I’m an unusually good fit with the team and this number is backed by a real data point whose situation is very similar to mine — which is true — the hiring manager has said that he is looking to hire someone with domain knowledge in housing)
Hearing that, the recruiter took a deep breath, and said the number sounds really high — ‘anything with a 3 at the start is usually at the senior level’, but — he will go back to the comp team to explain my situation and ask for an increase — But if after he brings back the new numbers I’m still unhappy about it, I’d need to share Uber’s numbers for him to do anything about it.
I succeeded!!! I tell you what — I was happier then than when I got any of my offers — the offers were kind of expected but this increase wasn’t — I really didn’t think I have any real lever (since I wasn’t sharing Uber’s numbers), but somehow the recruiter responded to my ask.
Negotiations round 2
3 days later, on Oct 22 Thu, the Zillow recruiter sent a very short email to me — ‘let me know if you have time to sync up today.’ — that means Zillow Offer #2 is ready!
Here’s the numbers: base increased by $5k to $160k, first year’s sign on increased by $5k to $40k, second year’s sign on increased by $5k to $30k, and new hire equity grant increased by $30k to $180k. There’s no change in the ‘annual targeted equity bonus’ since it’s tied to the level. At the end, he emphasized again: if I want to get anything more, I’d need to share the Uber numbers with him.
Although this isn’t a huge change, it’s enough to get the ball rolling. After confirming with Ralph, I sent an email to Uber on Oct 23 Fri, making the following points: (1) here’s my ask — $325k total comp (2) Zillow was able to give me an increase without asking me for Uber’s number (then I shared Zillow’s Offer #2) (3) the hiring manager allows me to work remotely without it affecting my pay (4) this is an extremely attractive option to me because my husband works in Chicago (5) the previous 3 points really showed me that the hiring manager at Zillow cares about me and supports me (6) I really want to see the same level of support from Uber.
On Oct 27 Tue, the recruiter replied saying she will take all these info to the comp team, and will keep me updated. On Oct 29 Thu, I sent an email to check in, and the recruiter said they are finalizing the final details, and I should hear back tomorrow, which unfortunately didn’t happen. On Nov 2 Mon, I sent another email to check, and heard that it’s still being finalized. On Nov 6 Fri, the recruiter finally called to give Uber’s Offer #2: base increased by $5k to $150k, new hire equity grant increased by $45k to $300k, and now there’s a $25k sign on in year 1, and a $25k sign on in year 2; there’s no change in targeted cash bonus since it’s tied to the level. This brings Uber’s offer to $273k total comp for the first year, and $260.5k/yr for the first 4 years. However, remote work isn’t an option — it’s a firm-wide policy.
I discussed it with Ralph in an advising call right away, i.e. on Nov 6 Fri, in which, they said: (1) we can’t share it with Zillow now, because it’s not high enough and Zillow will just brush it off (2) we need to keep pushing on the Uber front: emphasize that Zillow is giving me a lot of flexibility, i.e. the remote work option, and because of that, the Uber offer is a financial burden, because I’ll need to separate from my husband and pay for SF rent.
Just as the Uber Offer #2 came in, the hiring manager also wrote an email to me to offer to chat. Since I have already turned down chatting with her many times while I was waiting for Zillow’s Offer #2 and Uber’s Offer #2, I think it’s time to finally face her.
So on Nov 9 Mon, I had this long overdue conversation with my hiring manager at Uber. I was going to tell her my ask, but she preemptively answered it: she said, she would highly recommend me not work remotely especially for the start of my career, because being face to face with colleagues is super important for career development. Plus, no one can guarantee what things will happen after COVID — she would take the remote work promise by Zillow with a grain of salt.
Honestly, I kind of agree — Anthony also said, if I decided to go to Zillow, he would highly recommend me work from Seattle instead of Chicago. In fact, he thinks it’s not great for my mental health + our relationship if he is the only human being I talk to, which I agree.
Given that the hiring manager very cleverly defused my ammunition — Zillow’s remote work policy, I really don’t have much lever to do my ask. I asked a few more questions on what projects I’ll be working on, which is also something I’m honestly interested in (as I was having a hard time making up my mind which one to pick) and concluded the call.
I shared the bad news with Ralph, and we scheduled an advising call for the next day, Nov 10 Tue.
Update on Google team match
But before the call, a very important change happened — Remember that I already passed Google’s onsite and has been waiting for the team match? On Nov 9 Mon, a friend of mine at Google told me he found a team who’s hiring — Display Ads, and on Nov 10 Tue, the recruiter officially reached out to say a hiring manager has expressed interest in my profile.
This really changed the game, because all of a sudden, the priority changed from ‘pushing for a higher offer from Uber and Zillow’, to ‘getting Google’s offer as soon as possible, while pushing the deadline on Uber and Zillow’. — Now that both Uber and Zillow has given me their offer #2, both of them started growing impatient:
- On Nov 13 Fri, i.e. a few days after I chatted with the hiring manager, the Uber recruiter gave me a decision deadline: Nov 25 Wed, i.e. day before Thanksgiving.
- It’s clear that Uber won’t change their offer further, so there’s no cost sharing that offer with Zillow anymore, because otherwise that piece of info goes to waste.
- I did that on Nov 13 Fri, and received a reply from the Zillow recruiter on Nov 16 Mon saying (1) our offer is right around that $260k mark (what they did was to re-calculate the numbers based on the latest stock price and taking into account a 3% growth in both the cash and equity part of the comp… ) and (2) they’ve resumed interviewing other candidates again
- But on the same day, Nov 16 Mon, I also had some good news — the Google recruiter said the hiring manager enjoyed the chat with me, and she has submitted my offer for review
