Let’s stop negotiating salaries
When we allow salary negotiations to determine compensation for new hires, we implicitly state that salary negotiation is a core competency for the role we’re filling. This is not only incorrect in the vast majority of cases, it’s also an insidious practice that perpetuates salary inequality.
Let’s stop doing it.
The straw that broke my offer system’s back
We recently made an offer to a senior candidate for a role in Technology at Bench. They had a competing offer from one of the “big” software companies for about 10K more, and they informed us that we would need to increase our offer for them to consider joining us. When I heard about this, my overwhelming first instinct was to match the other offer. Senior talent is hard to find, so what’s 10K against the opportunity cost of empty senior headcount? Fortunately, I took a deep breath and managed to talk myself out of it. I consulted the hiring manager, who agreed. We ultimately decided to keep our original offer, and the candidate chose the other company.
All in all, this experience left a bad taste in my mouth. This had nothing to do with the candidate; I was disappointed in myself. I am extremely proud of the fair, transparent compensation systems that we have built, and yet I had been sorely tempted to ignore them just to get a candidate across the line. This made it very clear to me that while our competency and salary systems are strong for our existing employees, we hadn’t yet built strong ones for our candidates. This opened the door to bias, inequality, and inconsistency at offer time, which leads to all kinds of cultural debt, and is not at all what I stand for as a leader.
Time to level up.
Candidate assessment and job offers are a system we control, and can therefore reimagine
I recently read some really interesting research from Iris Bohnet in her book What Works: Gender Equality by Design. I’ll paraphrase: academic research is telling us that folks in positions of privilege are more likely to negotiate job offers than those who are not. This is a generally known fact, but there’s an interesting twist: this “negotiation gap” is particularly pronounced when there is ambiguity in the job offer process; if an offer is given, and negotiation is not mentioned anywhere in the offer, privileged folks are very significantly more likely to negotiate. However, if the offer contains an invitation to negotiate, the gap is smaller between the groups. If, in addition to an invitation to negotiate, parameters for negotiation are set, the gap is smaller still.
To be honest, I had never thought deeply about the negotiations that happen at offer time. My story was that I generally liked negotiating, as I had found that moving a little on salary can lead to deeper levels of commitment from Benchmates-to-be. But wait. If I pay folks who negotiate more than folks who don’t, am I saying that salary negotiation is a core competency for the people on my team? We’re very specific about our competencies — they’re public — and salary negotiation is not one of them. By having an ambiguous stance on salary negotiation, not only am I rewarding an irrelevant competency, I’m complicit in perpetuating the negotiation (and therefore the salary) gap.
We already have a competency assessment process that uses structured negotiation
Our current competency assessment process — also public — is designed to reduce bias by systematizing the assessment process. It clearly defines expectations and how to measure them. It invites negotiation of current performance in each competency in a safe, structured, and transparent environment. It has created incredible growth conversations, and consistently leaves both manager and employee aligned on growth opportunities and current level of competency (and therefore current salary).
The rub, of course, is that you need a lot of context to run this process effectively.
Designing a new candidate assessment and offer process
What if we explicitly disallowed salary negotiation at offer time, with a promise of a competency assessment (and associated salary adjustment) after 3 months?
This new system optimizes for equity in two ways. First, it mitigates the negotiation gap: instead of ambiguously allowing negotiations at a time when we have little information (4 hours of interviewing), we actively invite the Benchmate into a structured negotiation — our assessment process — at a time when we have a lot of information (3 months of employment). Second, it forces us to have competency-based pay from day one, while also — through re-assessing at 3 months — minimizing the amount of time that their salary is based on our low-information interview assessment.
This system also optimizes for growth. When new employees know that just 3 months after starting they have the opportunity to increase their salary, they will be growth-focused from day one. This will give them huge incentive to familiarize themselves with our competencies, and to work with managers to create growth plans right out of the gate.
Levelling-up our interview assessments
For this new system to work, we must increase the accuracy and transparency of our interview competency assessments.
Currently, we have People, Process, and Technology interviews (which map directly to the categories in our competency framework). We hold a post-interview sync, where each interviewer shares two things. First: regardless of their skill, do they want to work with this candidate? Second: their assessment of the candidate’s proficiency in People, Process, or Technology. This system is fine, but its ambiguity leaves lots of space for bias. To level-up our interview processes, we need to be more specific in what we’re looking for.
Instead of asking “do we want to work with this person”, we will ask:
- Do you believe this candidate will be successful at Bench? Why or why not?
- Do you see any risks associated with having this candidate on our team?
Instead of asking for a general assessment of proficiency, we will ask:
- At what level do you assess this candidate? (ie. Engineer 1 — Engineer 5)
- Would you place them low, medium or high in the salary band for this level?
The above will be submitted in writing to the hiring manager before the sync. This reduces risk of groupthink, and simplifies the meeting to one where the hiring manager asks clarifying questions rather than listens to assessments.
An added benefit of this paper trail is that we can compare our initial assessments with our three-month assessments, and figure out how to minimize any gaps. Such paper trails are also a requirement for SOC2 compliance — a recognition that transparent systems reduce risk.
Shining a light on the risks
What if this system results in high-quality talent choosing other companies over us? I’ll counter with: what if it lands us high-quality talent who share our stand for diversity, equity and inclusion? This is a system we will make very public — candidates will be informed about it right from the start of their Bench experience, and reminded of it throughout the interview process. It’s possible that while it’s a risk for some candidates (likely those who benefit from the status quo), it’s a selling point for others (likely those who want to see change). Frankly, I’d rather optimize for the latter group.
Another risk is that there could be a negative delta between our initial and three-month assessments. We can mitigate this with a simple commitment: your salary will not decrease even if we assess you at a lower level than we did during your interview. If we find ourselves in this situation, the conversation must be about closing the gap through positive growth, not negative dollars.
Going live
This post is both a description of our new offer system and an announcement of its launch for the Technology organization at Bench. We’ve actually been trialing it already with reasonable success, so we’re confident that this more public version will serve us well as we grow.
On that note, did I mention we’re doubling our team? If this post resonates with you, I encourage you to keep reading our engineering blog, to check out the Technology Handbook, and ultimately to apply for one of the roles on our careers page.
