🥊 Counteroffers

Recently my friend Sasha said something really smart:

"Everyone treats counteroffers like a magic wand that changes everything. Whether a company gives you an offer depends on three things:

• Your value to the company (how much money you can make them)

• Your cost to the company (what you’re trying to raise with a counteroffer)

• And the company’s belief about how likely you are to reject the proposed compensation.

A counteroffer only sometimes affects the last point.”

I completely agree with Sasha’s idea and want to take it a bit further: your goal in negotiations is to make yourself un-bendable. A counteroffer seems like a good way to show Facebet: “if you don’t agree to pay me 100,500 monies, look — Ohio SunOil is offering 100,501!”

But if nobody is giving you such a perfect counteroffer, you can build other signals around yourself that say “don’t underpay this person”:

• A financial safety cushion. Easy: if you can afford to look for a job for another six months, your ability to reject things is higher than that of someone who’s already drowning in red numbers. *By the way, in terms of the “secretary problem,” maybe you should reject the first offer! 🌚 I myself never did that, of course — I don’t love math that much and I haven’t reached that level of enlightenment yet. *

• A strong network. Same logic — your chances of finding a job increase.

• Still, your value to companies. If you bring a lot of value to one company, chances are you can bring it to another as well.

I’m not a big fan of long lists, so three points is enough. I think the general rule is this: invest not in having two or three simultaneous offers, but in the skills and stability that let you come to negotiations not as a hostage. Nobody negotiates with hostages, and frankly, you shouldn’t go to a negotiation with terrorists in the role of a hostage to begin with.