Tech Industry Jobs for Econ PhDs — Part 4: the Job Hunting Process II

This series is meant to help Econ PhDs understand the tech industry job landscape and prepare for the job hunting process.

Links to other parts of the series:

Part 1 — the Tech Industry Landscape

Part 2 — Interview Prep

Part 3 — the Job Hunting Process I (when to apply, how to find positions, networking, CV)

The interview process

roughly includes the following parts:

• (there might be) an online assessment/data challenge: after you submitted your CV, one day you suddenly receive an email in your inbox saying ‘XX firm would like to invite you to complete this data challenge. Once you click ‘start’, you have 24 hours. You have access to this challenge in the next 7 days.’ (of course the exact number of hours or days given can vary). These can include anything from SQL to python coding to dataset manipulations to probability question to machine learning projects to analyzing results of AB test.
• Technical phone screen: there might be 1 or 2 rounds of TPS. The recruiter might or might not tell you what’s the content, but it doesn’t hurt to ask. In general, I’d be prepared to answer any of the topics mentioned in section II, as what the recruiter says can sometimes be inaccurate
• (Virtual) onsite interviews: which can be either arranged in 1 day, or split into 2 days. The onsite usually consists of 4–7 1:1 interviews. One of them will be the hiring manager. For most firms, each interviewer will take notes during your interview; there will be a debrief after your onsite among all the interviewers; the outcome is determined collectively. That being said, I’ve found that the hiring manager interview is the most important — in cases where I did really well in the hiring manager interview but messed up some others, I still got offers; but not the other way around

Timeline

Larger firms are slower than smaller firms; new grad recruiting process is longer than that for normal positions.

For example, at google, if it’s the ‘Data Scientist, PhD University Graduate’ position, from ‘being contacted by the recruiter’ to ‘onsite’ can be 6–8 weeks and from ‘onsite’ to ‘offer’ can be another 6–8 weeks (because their team matching process happens after you pass the onsite interview). However, with Uber, if it’s a normal position (something they are looking to fill ASAP), from CV submission to offer it can take as little as 3 weeks.

There are different ways to arrange things:

• If you want to make sure all your offers land at roughly the same time so you have the most leverage for wage bargaining, try to start the process with large firms and/or new grad positions first, and smaller firms and/or normal positions later
• Another trick is to hold off arranging onsites until you have all of them and arrange them at around the same time
• However, you might be worried ‘what if I interview with my favorite firm first and fail’. If you want some practice, one possibility is to interview with some smaller start-ups first
• If it’s not a new grad position, firms typically give you 1–2 or 2–3 weeks to consider once they extend the offer (the clock only starts after they’ve told you numbers on the compensation package). There are also cases where they give you an exploding offer (e.g. 24–48 hours).
• If your progress with some firms are drastically faster/slower than others you might be facing the problem of ‘do I forgo this offer, or do I accept and terminate my process with other firms’.
• In my case, I was able to (1) extend the deadline on the offer I already have and (2) have the other firms dramatically speed up their interviewing process.
• To do this, understand your levers — how much does the firm want you, how replaceable are you, how well you did on the interviews, are they interviewing other candidates, etc.
• Explain to the recruiter ‘this is a very important life decision; I don’t think I can make it just yet since I’m still talking to some other firms and it would be great if you could help extend the deadline’ and ‘I have an offer with a XX deadline but I’m really excited about the possibility of working at YY [your firm] and it would be great if you could help speed up the process’, etc.

In general, realize that you have more levers than them, and don’t be intimidated by the recruiters: the acquisition cost to get you is 10k-20k, and it’s really not that easy to come by a econ phd who wants to work as a data scientist and also has the skills.

Wage bargaining

Most new grads don’t realize that they should do wage bargaining; firms will never give you a highball to begin with, so if you don’t bargain, you are leaving money on the table.

A ‘package’ can include the following:

• base salary: it’s quoted in annual terms, i.e. 125k base means ‘125k in cash paid out to you every year’
• new hire equity grant: it’s typically some amount of stock (e.g. 150k) vested over 4 years (typically). Public firms use RSU (restricted stock units) and start-ups use stock options. There’s usually a 1 year cliff, i.e. nothing will vest during your first year; 25% is vested on the day after your one-year-anniversary at the firm. In terms of the vesting schedule, it’s usually 1/4 each year; the only exception I know of is Amazon, which does 5%, 15%, 40%, 40%. Some firms do ‘x-k worth of RSU’ whereas some do ‘x number of RSUs’ — make sure you know what you are getting
• annual targeted cash bonus: typically 10% of the base. You’ll have your performance review after your first anniversary, and if you meet certain performance expectations, you’ll get 1x of the annual targeted cash bonus; if you exceeded expectations, you can get more than 1x, e.g. 1.5x
• annual stock refresher: also vested over 4 years. For example, if the firm tells you your ‘annual stock refresher is 20k’, it means that, after your 1st annual performance review, if you met expectations, 1/4 of the 20k will vest in the year following that performance review, 1/4 of the 20k will vest the year after, etc. And again if you exceed expectations you might get more than that
• signing bonus: for example, 50k cash paid out to you on your first pay check; at some firms, they split the signing bonus into two years, e.g. 30k in the first year, 20k in the second year
• benefits: some firms do 401(k) matching and some don’t; this can be another 10k worth of money, so make sure you ask; other things might include relocation reimbursement, gym and wellness reimbursement, transportation reimbursement, firm specific perks (e.g. LinkedIn might give you LinkedIn premium for free; Uber might give you some Uber credit, etc.)

Some principles:

• Don’t be the first one to name a number: some firms will ask you ‘what’s your expectation on the total compensation’ before the interview process. Say ‘I think it is too early for this question; I’d love to see if there’s a mutual fit with the team first’. If they say ‘we just want to make sure we are not wasting your time’, say ‘I’m sure we’ll figure something out if there’s a fit’. If they keep pushing, either say ‘Let’s put down $1 and revisit this later’ or ‘Let’s use [the median number on Glassdoor/levels.fyi] for this position in this location as a starting point’ — this way although you’re naming a number, it does not reveal information
• Protect information: don’t say which other firms you are interviewing with or have offers from, just vaguely mention ‘I’m also in the process of talking with some other very exciting firms’ or ‘I do have this other offer that is also very attractive’. This is because, the more info you give them, the more bargaining levers you are giving them: they might say ‘[this other firm’s] stock is not as stable as ours’ or ‘our industry is on a better trajectory than their’s’ or ‘data scientists at their firm don’t have as much influence as ours’, or ‘we don’t bargain with anything in Bay Area/Seattle/New York as it’s in a different labor market’, etc.
• Ask lots of questions and understand your levers: Don’t rush into the bargaining process; ask as many questions as possible to understand your levers: what’s the feedback for your onsite? what are your strengths and weaknesses that they pointed out? what projects might the hiring manager put you on after you join? what’s the team/firm’s next big goal(s)? is there a specific skillset you have that might be precisely useful for those projects? are they interviewing other candidates? is it easy for them to find someone to replace you (another econ phd with your background)?
• Do your research, have data points: a firm might say ‘all of our starting salary is the same’ then if you know of a friend of yours who entered the firm who has a different number it would be useful; just in general, knowing what is the right range is important because you know when to keep pushing and when to walk away or when to accept; you can use Glassdoor, levels.fyi, but bear in mind that those can be wrong; ask your econ phd friends who went into industry to see if what you are getting is a low or medium or highball; bear in mind that different locations and different leveling will have very different packages
• Justify your asks; be creative what to ask for: ‘I have x amount of student loans to pay off / plans to buy a house in x years / is planning my wedding/honeymoon / plans to have my first child in x amount of time’ is a lot more compelling than ‘I just want more money’ — it absolutely does not mean you lie about it; instead, it means having a very good understanding of your own financial situation, and figuring out what financial goals is in your horizon to justify the ask (and how much to ask for). Also, money is not the only thing to negotiate over: what about more number of performance reviews per year so you can progress faster? a personal mentor? choosing your team? choosing your first project(s)? more paid-time-off? being able to work remotely? reimbursement for attending conferences? Think about what matters to you and try to increase the size of the pie in addition to getting a larger share of it
• Choose the firm first, then do the negotiation: try to isolate the firm-picking process from the wage-bargaining process. First, figure out what matters to you the most (interesting projects? career growth? nice people? work life balance? location? industry prospects?), then pick the firm based on that, and lastly do the wage bargaining. (Of course if wage is the thing that matters to you the most that’s totally fine, but then maybe tech is not the best bet because there are other industries that pay way more such as hedge funds)
• How the actual back-and-forth can look like: typically you can do two rounds of negotiation: for example, the recruiter tells you the initial offer is 210k per year plus 20k sign on, you press the right buttons, and she/he goes back to work on it and brings you back 230k per year plus 40k sign on, then you do one last negotiation (but make sure if they fulfill your request you’re ready to sign) and she/he brings you 235k per year plus 60k sign on, and you happily sign. (These numbers are fictional; just there to let you know what the back-and-forth can look like.)
• Only reveal numbers on the counter offer towards the end: the negotiation process is like playing poker; in poker, you wouldn’t be using your jokers at the beginning; same in negotiations. You might think ‘oh, I’ll just tell firm A my offer from firm B and they’ll match’. The problems are: what if these two numbers are very close? what if your preferred firm is offering more? what if firm A refuses to match? what if firm A only matches a small fraction? what do you do next? If you use ‘showing each other’s numbers’ to negotiate, you end up with your highest initial offer. By playing smartly (i.e. your other cards first), you can get a final number that’s higher than either of your initial offer. But on the other hand, if you don’t use your joker at all in the game, you end up wasting them; the right way is to play it last — when you’re ready to do the final round of negotiation. (I later realized that the poker games people play in China vs in the West is very different; my example is based on the Chinese poker game 升级/八十分 and probably not relevant for most western poker games.)
• Be positive and polite; don’t lose the cool: during the whole process, be extremely enthusiastic about their business, so that they always feel they can get you (a recruiter will lose interest if they think they are just the bargaining chip you use towards the other firm); don’t ever get upset or even angry, the recruiter is just doing her/his job, and if you harm your relationship with either the recruiter or the hiring manager it will be very difficult for the negotiation to continue in your favor; after all, it’s good to be ending on the right foot even if you didn’t join, as your career is a long one and you might come back one day

References:

Ten Rules for Negotiating a Job Offer

Salary negotiation strategies everyone in tech already knows — but you don’t

California’s Salary History Ban: Answers to Frequently Asked Questions — Ogletree Deakins

A Client Success Story: Harold

Farewell, App Academy. Hello, Airbnb. (Part II)