PhD Problems: You’ve Never Had to Negotiate
When you get into graduate school to do a doctorate, if you’re lucky they send you a letter that tells you how much you are going to be given as an annual stipend. The pittance that most students are offered is handed down by fiat and intended only to cover the most basic costs of living so that you can stay reasonably alive to conduct your studies — and that’s for programs that offer funding at all.
At no point is there a conversation about what you as a worker are worth to the school where you are doing your research. There is no phase where different entities compete over you and you have the chance to get a little more money from an organization that really needs you. There is no negotiation.
This has after effects. I know quite a few postdocs and ex-academics who internalized the thinking that you get told how much you will be paid, and it is not be questioned. These folks did not negotiate their salary offers after grad school, and they should have — but no one taught them that.
Academia has a really distorted, unhealthy view of compensation. Often, in academic circles, career advancement and stability of a position are prioritized over salary and benefits. The end result is a world where a PhD and subsequent postdoctoral “training” come with a serious disadvantage in marginal wage differences when compared to just getting a job in industry. A few years ago, my own back of the envelope calculation estimated about $250,000 in lost wages over the course of an academic career versus what the hypothetical earnings in industry would be. A little while later, some more rigorous research essentially confirmed that estimate. The verdict is pretty clear: academia hurts your lifetime earnings if you remain in it.
Unfortunately, the culture of academia instills a mindset that continues to hurt the earnings of some former academics who have escaped the subsistence wages of the ivory tower. We don’t leave with a clear sense of the actual monetary value of our labor, and worse, we are often taught that seeking our full value is crass or unreasonable.
Academia is a world that believes in knowledge and prestige above material concerns. That doesn’t stop academics from having wine and cheese mixers after symposia, of course, but there is still an impression that students and postdoctoral fellows are lucky just to have the chance to do research, let alone to be paid for it, especially in cutting-edge or high-tier institutions. Part of the justification we are given is that we receive training in some form that is worth the difference relative to what we would earn out in the workforce. I’m not so sure that’s true, especially not when academic training can go on for decades with little reward, but to go into industry seeking a bigger paycheck is often called “selling out.” This causes academic trainees to languish until they win the lottery of getting a tenure-track position and a grant to support it — at which point they’re supposed to hire more “trainees” at subsistence wages and pay the hazing forward. The value system in that culture devalues people who work hard to create the results that fuel the entire enterprise.
For this reason, it can be really disconcerting to make the jump into industry and fairly judge whether or not an offer of pay that comes in at 150% or 200% of your academic pay is really what you deserve. Often, it seems that whatever you are offered outside academia is astronomical compared to what you’re used to. With that internalized attitude, it’s easy to think that asking to negotiate is gauche, vulgar, or pointless.
It’s not any of those things. Negotiation is generally expected, and it is one of the best ways to feel out your prospective employer’s attitude about you. You should assume that an employer came to the table prepared to negotiate and with an offer that represents what it would cost to bring you on board as a bargain. This is your opportunity to lock in a number that will determine future percentage-based raises and bonuses, as well as increase what other companies will need to offer you in order to hire you away. The better you can get, the better your career future will be. You have a duty to your future to seek the best you can get, even though your academic training has not prepared you at all for doing so.
To succeed at getting what you deserve, you need to have a good sense of what your real market value is, and a sense of how far you can push. You will also need to understand the fine print of a job offer and determine how the benefits that come along with a job offer impact the value of your compensation.
Consider two similar offers: one for $90,000 and one for $85,000 with a pretax commuter benefit and a 401(k) program. With the $90k offer, an individual in the US would bay $19,950 in federal taxes in the US in 2018, and state taxes on top of that. With the $85k offer, assuming a 5% 401k contribution and a full commuter benefit, the person would pay only $17,240 in federal taxes but get $4,250 extra in 401k matching, plus whatever state tax reduction is appropriate. In other words, that $85k offer is worth about $1200 more than the $90k offer. That’s not nothing, especially when the difference comes in retirement savings value, which will grow over your career.
Of course, every offer and every individual's situation is different, and I am not a financial professional at all, but this example gives a taste of what you may need to think about in order to evaluate what an offer is really worth to you.
Another important consideration is the market for your desired job and experience level. There are many websites these days that offer salary estimates, and I recommend you use them. However, salary data can be quite misleading. When shown as an average, it often skews higher than it should because of the occasional company or industry that uses the same job title you are seeking, but to refer to something else. For example, in my industry there is a mid/senior-level role that is title “Medical Director.” Unfortunately, this also happens to be a title that is given to some physicians who are in charge of entire clinical care systems. When I look at average salary data by title, I get a result that is distorted by people whose base pay may be in the millions. If I look instead by job function, or by median pay instead of mean, I get a more accurate story.
Another way to get an accurate story is to connect with people currently in the business, and with recruiters, as these folks have direct experience — especially recruiters. Since recruiters usually get paid based on what their placements’ base salaries are, they have little incentive to downplay or lowball you. If a recruiter tells you that there is an upper limit to what you can expect to get, they are usually telling you the truth per their experience.
This knowledge matters because it will help you negotiate with a sense of what number is going to be too high to ask for. This is important, because going too far outside of the reasonable range may lead to your negotiation skills not being taken seriously. Once you lose credibility, you’re at a serious disadvantage.
The conventional wisdom with negotiating salary is to start with a high ask, and then have in mind a lower number at which you are willing to settle. While this tactic is expected, it is not a negotiating strategy. A strategy is more overarching than any single action, but it is also not as high-level as a goal. The way this was explained to me was by using the Trojan War as an example.
In the Trojan War, the Greek goal was to sack the city of Troy. The strategy used was to sack it by surprise (after spending years trying to sack it by attrition, which failed). The tactic used was a giant wooden horse that could contain hidden soldiers.
To set a negotiation strategy, therefore, you should determine your goals first. Then assess the weaknesses and advantages that you have, so that you can decide what approaches are open to you that will help you reach those goals.
What I personally do in terms of goals is two-fold. First, I use the job interview to figure out how much I want to work any particular place. Then, I assess the number, in base pay, that I would need to be offered to work somewhere that I do not like at all. Not a place I hate, because that would be far too high a number, but a place where compensation would be the only reason to stay. Let’s say I came up with $100,000 as that number. After that, I apply a “discount” based on what my prospective job has to offer beyond just money. Say that what they are working on really matches my interests — I might knock off 5% for that. Say also that I love the culture — that might be 5% off too. And if there are things I really don’t like, these discounts might not be so high. What this approach does is ask the question, “What is it really worth to me to do this job at this place?”
In asking that, be careful not to undervalue yourself. Your work has real value, and if you value yourself too low, you are not “being nice” or “humble.” You are turning yourself into a charity that benefits poor companies. You know, those big businesses that just can’t make ends meet? I’m assuming the sound of crickets is deafening as those reading this try to list any. Don’t be a charity to your for-profit employer. Get what you deserve.
The other thing to think about is your minimum acceptable offer. Especially for entry level jobs, it is not easy to apply and have the employer let you write your own check. You’ll get pushback on your ideal ask, and you need to know what number you should consider as an insult and walk away from, versus what number may be a little lower than your ask while still being fair. Don’t be afraid to walk away from a company that won’t commit to a fair offer. It is the most literal sign that they don’t value you as a prospective employee. Working somewhere that you won’t be valued is a bad idea even without getting below-market pay for it.
With a sense of your own boundaries on salary range, you have goals you can build a strategy toward achieving. You then need to choose that strategy, which is a personal decision, but there are a couple of tactical elements that I would recommend regardless of what posture and approach you use.
One is avoiding naming a salary target for as long as you can, in hopes that the prospective employer is the first to say a number. If pressed, you can always say that you are focused on other things than salary and want to get a sense of how good the “fit” is before you get down to those brass tacks. If they want to offer you a job, they’re going to have to eventually name an amount they’re willing to pay.
Another important move comes when asking your negotiating counterpart to move their offer higher. You are not going to get more than one or two rounds of modification to an offer, so when you ask the first time, you will need to be sure that they will come back to you with a number that is as close as possible to what you will accept. That means you should treat your first request for a change as though it is going to be your only request. Specifically, don’t just tell them you want them to do better than their initial offer. Give them all your reasons, as politely as possible, for wanting higher pay. Make it clear that you are on the fence, and you are there because you have certain financial needs, like a family, or, a good competing offer — whatever the case may be. Most important is to list all of your reasons and not add new reasons later.
At any given organization, it may take a bit of internal work to modify an offer, and if someone does that work based on an initial reasoning you gave them, they won’t be happy if your reasoning has changed when they come back to you with something better. They’ll wonder if it’s possible to make you happy, or if you’re just stringing them along. Your countering a second offer can make them question if it’s worth making a third offer. So state your needs and concerns up front, and be clear about what you need and why you need it. If they don’t meet those needs, then you can keep negotiating — but don’t introduce new elements.
Of course, every negotiation is a conversation and is as unique as its participants are, which is one of the reasons I haven’t spelled out a specific strategy that you should use. That part needs to come from you, and furthermore, I have no doubt that anyone who can develop a research strategy to get a PhD can successfully develop a negotiating strategy. However, it is important to recognize the common elements of plain dealing so that you can get what you deserve. Most important, of course, is to remember not to underestimate what you have to offer.
If you take away anything from this, it should be that you have a right to ask for more, and you are expected to ask. Don’t let your academic background leave you feeling like you are not in a position to be firm and self-valuing. This is your career, and with the work you have put into gaining your skills and qualifications, you owe it to yourself to negotiate the most favorable compensation you can get.
The “PhD Problems” articles are a series on making the jump from advanced academia into business. The rest are available in my Medium feed.
You can find more from me, John Skylar, at www.johnskylar.com/writing.