TOP FIVE MISTAKES PEOPLE MAKE WHEN NEGOTIATING

Kip Boyle:
Hi, welcome to Your Cyber Path, we’re the podcast that helps you get your dream cybersecurity job. My name’s Kip Boyle, I’m here with Jason Dion. Hey Jason, how you doing today?

Jason Dion:        
Hey, Kip. I’m doing great. How are you doing today?

Kip Boyle:           
I’m doing really well, thanks a lot. I am just stunned that it is June. As we record this episode, the calendar just rolled over to June and oh, man. I don’t know, I mean, it’s like I’ve had my head down and I’m peddling really hard and all of a sudden I look up and it’s like, “Oh, there’s the finish line,” kind of a thing. But anyway, I’ve been having a great year though, don’t misunderstand. I grouched about the weather on the last episode, but right now I’m telling you I’m a happy boy.

Jason Dion:        
Yeah, it’s been a busy year already. I was surprised today when I looked up I’m like, “Wow! It is the beginning of June already.” It’s just crazy and for me and my household, June is a bit nuts, in addition to just all sorts of other crazy stuff going on this year. But in June I have my son’s birthday, my wife’s birthday, I have Father’s Day and then my other kid’s birthday. For me, June is like another Christmas. We got December, everybody gets presents and June, everybody gets presents. So it gets me really busy.

Kip Boyle:           
Do you guys just consolidate down to a single day to celebrate everything?

Jason Dion:        
I’ve tried that before, no. With kids [crosstalk].

Kip Boyle:           
That’s a very dad idea, isn’t it?

Jason Dion:        
My kids are only two years apart. They’re now turning 16 and 18 so they’re not going to share birthdays now. But when they were little they all had the same friend group too, because my kids early on, they were in the same church, we homeschooled our kids when they were in middle school. And so all their friends were the same. It’s like, “Well guys, it’s kind of silly to be like, ‘Hey, let’s have a birthday for first kiddo and then two weeks later, Hey, all the same people to another party for the second kiddo.'” What we usually did was we went in between the two. Usually it was the Saturday, which was the Saturday of Father’s Day weekend. That way it was between and all their friends could come and they could all bring presents for both kids. It worked out well that way. It wasn’t us trying to save money, just we were trying not to hassle all of our friends because it just took up all their June by having to come to all of our birthday parties.

Kip Boyle:           
Right, right, right. You did have an approach, you did have an efficiency.

Jason Dion:        
I got away with that for about two or three years, and then they got old enough where they went back into regular school and they started having their own friends and then they wanted to do their own thing. But it worked for a couple of years.

Kip Boyle:           
That’s so funny. Well, let’s see. It is June and we’re not in a really peak hiring season right now. We’ve talked about in the past, I think we had a whole episode where we talked about what the traditional hiring seasons are here in the United States and Canada. We’re actually starting our summer holidays and so this really is not a peak hiring season. But we are going to talk about something that is going to be super important for when hiring starts to kick up again in the fall, which is negotiating your compensation. And specifically we’re going to talk about today is the top five mistakes that we see people making when they are negotiating compensation.

This is a list of complete cringe because we don’t want you to make these mistakes. These are awful, and they can cost you a lot of money if you make these mistakes. It can not only set you up for a bad experience when you join a new employer, but based on how you do the negotiation, it can affect you for years. Because if you get an abnormally low base salary and you might get pay increases in the future years, well, the baseline that you start from is going to determine where you end up and how much those increases are worth, because they’re typically a percentage of baseline. So you got to get this stuff right. Otherwise, you’re going to have to live with it for potentially a long time.

Jason Dion:
Before we jump into those five, I want to bring up a quick caveat. Normally Kip and I try to make these episodes as evergreen as possible. What I mean by that is we try not to get political, we try not to get into what’s happening in the news right now and those type of things. But before we jump into this episode, I think it’s important, we’ve mentioned the fact that we’re recording this, it is June 2022 right now. For those who are aware, if you’re listening to this in real time, you’re obviously being affected by it right now. Huge amounts of inflation happening in the US, huge. Right now, I think it’s 9% to 10% is the inflation rate. If you get a Series I savings bonds you’re actually getting 9% on your money right now for the next six months, because inflation is so high and they base that number based on the inflation number.

The reason I’m bringing that up is when it comes to negotiations, we’re really focused on the initial negotiation, talking about when you get hired in this particular episode. But a lot of these things are things you can negotiate when you’re renegotiating your salary or asking for raises and things like that. The reason this is top of mind for me is I actually had one of our students from our hired cohort, he had gotten hired last year, last summer, after going through the June cohort with us. He is working for a Fortune 100 company, loving it, everything’s great. Just got his end of the year performance bonus and they said, “Hey, you did a great job. We’re going to give you a raise,” and his raise, as you just mentioned, was based on a percentage, so your salary plus X percent. He was happy that he got this raise and it went up. But unfortunately, his raise was about 5%. Five percent in today’s world where we have 9% inflation means he actually lost money between last year and this year.

It’s just a fact of the matter, most companies are not used to paying more than a couple of percentage points per year as a raise. Traditionally it’s 1% to 3% is what I typically see. This year they went up to 5% because inflation was so high. But I think it’s just something to be aware of because often the place where you’re going to get the most bang in your negotiation is when you’re coming into a new position. Often I see people when they want to get those big jumps in pay, they have to leave their company and go to a new position to do that because most companies just have this hard time paying more for the thing they already have.

Think about it like, I know you’ve got little kids Kip, and a babysitter comes over and watches them on Friday night so you and the wife can go to a dinner and a movie. If you’ve been paying that babysitter $5 an hour this whole time and she now says, “Hey, I now want $10 an hour,” you’re going to be like, “Nah, I’ll go see what else I can find.” Now everybody else in the marketplace might be at $10 an hour, but it still feels weird to double that person’s salary, because she’s been working for you at $5 an hour, for instance. You just have to understand that and then the mind of the business that you’re working for. It’s just really hard for them to see that and go, “Oh, you’re making $100,000 a year, I’m going to raise you to $110,000 or $115,000.” Normally it’s going to be more like you’re at $100,000, now you’re going to make $103,000. You’re going to get 3% increase and be happy for it.

You’ll see we had this whole great resignation thing happening in 2021 and a lot of it was there was a demand for workers from other employers and your current company’s like, “We love you, we want you to stay. Here’s a 2% or 3% bonus,” and you’re like, “Nah, that guy’s willing pay me 20% more or 15% more, 10% more, if I walk across the street. I’m going over there.” Just keep that in mind as we talk about the mistakes people make when negotiating. I just thought it was important to bring that up.

The other thing I wanted to bring up is we did talk about seasonality. We did have an entire episode on the calendar. Those hiring rates and patterns have been a little distorted in 2021 and 2022 specifically, because of this massive need for new employees and people trying to steal other people’s employees and bring them to their own organization. I can tell you I normally don’t see June and July as a busy hiring season, unless you’re trying to get a job at a water park or a theme park, something like that, those traditional summer jobs. It is just a little weird this year so you may see some of that, some more hiring in the time that other people aren’t normally seeing. But for us, we are still operating under the assumption that June and July should be very slow months.

Generally we start seeing a pick up again in September and because of that, we actually put our hired program on pause for the summer because Kip and I are both going on vacation during the summer as well and we will be doing another hired course come August so we’re getting you ready for the September hiring season. If you want to be notified when that comes out, definitely go to yourcyberpath.com on the front homepage, you can sign up for Kip’s mentor notes. We send those out every other week, gives you lots of great information. And when we have the next hired cohort opening up, if you want to be a part of that, Kip will definitely let you know through those mentor notes.

All that said, let’s get started with our top five mistakes that people make when they’re negotiating, now that Jason just spent all that time. Number one, Kip, what do you got?

Kip Boyle:           
No, thank you. That was a great preamble. I think it’s completely reasonable for you to tell people about that. But the number one mistake that we see people making when they’re negotiating compensation is that they’re using salary information from publicly available websites like Glassdoor and other sites. The problem is that this data is very unreliable because guess what, no employer uses those data sources. They have a completely different data source that you don’t have access to, which is called a salary survey. These salary surveys are available by subscription and one of the terms and conditions for an employer when they subscribe to these salary surveys is they have to upload to the place that they get this stuff from, the payroll information for their workforce. That’s how these salary surveys actually work, is that everybody who subscribed shares their actual payroll information. That’s how they know that this data is highly reliable.

But those sites out there like Glassdoor, you have no idea whether somebody’s telling you the truth what their comp is, whether they’re inflating it, deflating. I mean, you don’t know, it’s super unreliable. The trap that people fall into is they assume that it’s highly reliable and they take that in to their negotiating sessions. So they often feel like the employer’s low balling them. Really, because I think there’s a lot of salary inflation on sites like Glassdoor, it’s distorted. That’s probably going to trigger you emotionally. Not only are you going to have bad data, but you’re going to get triggered, not a recipe for success.

Jason Dion:        
I’ve actually seen the opposite as well. Using information like Glassdoor, where it’s lower than what the employer would’ve offered you. One of our students that I was mentioning earlier, when he went in to do the negotiation with that Fortune 100 company, he had a number in mind that he thought he was going to get offered and he followed our tips and let them put out a number first. And the number they came out with was higher than what he was going to ask for. So he was very happy and then [crosstalk] the negotiation and got that up a little bit more too. It worked out really well. But just be aware of that because a lot of Glassdoor data is either self-reported data, I can go in there and say, “Hey, I am an instructor with Dion Training and I make $60,000 per year,” whatever it is and then that goes in that system. Now, do I really make $60,000 a year? You don’t know, it’s just what I put in the system that said I did.

Kip Boyle:           
Are you telling me there’s trolls on the internet, Jason?

Jason Dion:        
Never. Never.

Kip Boyle:           
Never. No, of course not.

Jason Dion:        
The other thing is that salary information is not really the whole picture either and we’ll talk more about that too. But for instance, I just actually gave you my salary. If you look at my paychecks, I make $60,000 a year from Dion Training. That’s how much Dion Training pays me to be an instructor and to work in film courses and all that good stuff from that company. Now that’s only a part of my total compensation, but that is my salary. If I went into Glassdoor and said, “Yes, lead instructor, Dion Training makes $60,000 a year,” that’s not really true. That’s way low ball versus what I actually make because I have profit sharing in the company and other things like that. It is one of those things you have to be aware of. I could either say, “Hey, I make $1 million dollars a year,” and then I’m throwing all the numbers off. Or I could say I’m making $20,000 a year and it’s just data that I threw out there, it’s not really real.

I like what Kip was talking about the fact that the employers have more information than you do because they have this accurate data across the industry. Just like if you think about your credit report, it’s the same way these credit reporting agencies work. They get all the data from the credit card companies, and then they turn around and give back a score to those credit card companies. But to get that score as a credit card company, you have to give them data on all your people that you have credit cards with. It is that two way street that’s happening and you see the same thing with the salary information.

Let’s go to number two. Number two is throwing out a number first, [crosstalk] which you alluded to already. Thousands and thousands of dollars. Really, what I always like to think about when it comes to negotiation, whether you’re negotiating a salary or you’re trying to buy a car or a house or something like that, the person who has the most information wins. That’s what it is, it really comes down to that. As we said, number one, the employer already knows what their pay band is. They already know what they want to pay. They already know what other people in your industry are paying. Now it becomes a matter of figuring out what are you willing to accept to do that job if they like you.

Usually we talk about this in our course as well, when you get to the negotiation phase, generally the job is yours, unless you are just so unreasonable in your negotiations and you guys just can’t find common ground. If they come in and say, “I’m going to pay you $20,000 a year to be a cybersecurity analyst,” you’re going to say, “Nah, thanks. I’m going to go elsewhere.” Because if they’re saying $20,000 and you’re saying $100,000, there’s no way you guys are going to meet in the middle. You’re just too far off. But if they said $100,000, you said $120,000, you guys can probably find some middle ground and make it work. And if not, you’ll go find another job somewhere else. But generally that’s what you see.

When it comes to putting out a number, you don’t want to be the first one to speak. I’ve been talking the last couple podcasts, we just hired a bunch of people in our company. We’re up to 19 people and most of the people that we’ve interviewed with have done a really good job of when I say, “What do you think? What would you like make for this position,” of not throwing out a number first. As an employer, I hate that because it makes my job harder, but for them it’s great because if they threw out a number, it could be significantly lower than what I’m thinking. You just never know what their number is so I always like to go in with, let them give you the number first.

It’d be great if the job position actually set a salary range, but that is very rare and very uncommon. I am seeing a big movement in the HR community and from the employees community pushing on HR to say, “Look, if you’re going to post a job out there, you really should give us a pay band. I should know when I’m going to apply for this job if this is a $100,000 to $150,000 job, or a $25,000 to $50,000 job. Because if it’s $25,000 to $50,000 you’re wasting my time and your time having me apply for it because I’m not going to take that job. If it’s $100,000 to $150,000 then that’s in the range that I’m willing to accept and I’ll take that job.” As we make this change in HR, I think it’s slowly happening, but still today, if you go on LinkedIn, most jobs are not going to tell you what the pay range is.

Kip Boyle:           
Speaking of published pay ranges, we’re actually seeing a phenomenon right now where I believe it’s the state of Colorado has a law that requires employers to publish a pay range. As a result of that, out of state employers who are advertising on national job boards are saying things like, “Candidates from Colorado will not be considered,” because they don’t want to publish a pay range or pay band to conform with Colorado state law. So they’re just excluding applicants from Colorado.

This is very interesting and it tells me that employers very much like the ability to not publish pay bands for these positions. I think one of the reasons, you said it a moment ago actually, is you said when you’ve been interviewing some people recently to grow your team, you’re like, “Well, if they don’t say a number first, it makes my job harder.” I’m sure that’s part of what’s going on here. I wouldn’t be surprised if there were other reasons that were maybe even a little less than fair. But that goes back to internal equity and pay equity and that sort of thing.

Jason Dion:        
I recently had a position, we hired three or four, I think four, we hired four people as interns over the summer. High school interns, as we’re trying to build up more STEM positions for people and try to get them some experience so that when they go off to college, they can get good jobs because they have some real world experience. In those, we had to post a salary range. We said, “Okay, it’s X to X per hour.” Now, when an employer does that both of us are reading that same position and we’re thinking different things. Let’s say we said $10 to $15 per hour. The person reading is going, “Ah, this job pays $15 an hour.” Me as an employer, I’m going, “Ah, this job pays $10 per hour,” Even though we said $10 to $15, so we both have different ideas.

Basically what we had said was in this position, it is X to Y dollars per hour based on experience. Once we interview you and we see what we’re getting, then we could tell you what we think it’s going to be. I will tell you, even at lower paying jobs, like $10 to $15 an hour right now, in that particular market that we were pulling in high school interns from, it was very hard to not be at the top of that pay range. Because I could tell you when I was down there a couple weeks ago, and I know you’re going to Orlando soon, if you go into Chick-fil-A, if you go into McDonald’s, if you go into Five Guys, they’re paying $15 an hour right now to flip burgers. Somebody actually would be taking a pay cut to come work for me, but they’re going to be able to get some other things that they can’t get at McDonald’s. They’re getting real world skills that put them into a real world position for a career, not for flipping burgers.

Not that there’s anything wrong with that. If you want to flip burgers, that’s totally fine. But it is one of the things that they had to think about that from their side was, hey, I might go make a dollar or two more an hour flipping burgers, but that’s really hard work. It’s sweaty, it’s time consuming, versus working for Jason. That sounds fun and cool and I get to do something technical and that [crosstalk].

Kip Boyle:           
By comparison, yeah.

Jason Dion:        
We didn’t have a problem hiring, even though we were less than what they could have gotten working at McDonald’s. But that is one of those things that when you throw out a range and usually the range isn’t going to say, “This job pays $50,000,” it’s, “This job pays $50,000 to $75,000,” and the person reading that’s thinking $75,000, the person who posted it’s thinking $50,000 and sometimes you have to meet somewhere in the middle.

Kip Boyle:           
Yeah. Well, my point is that there’s all kinds of reasons why employees want to see a pay range and why employers may not want to share a pay range. The point is that we’re in a flux right now in the market where you’ve got some states in the United States actually requiring that employers disclose the pay range. The balance of power is shifting. But one of the things that I think people listening to this podcast need to realize is that there is a definitely an information asymmetry when it comes to negotiating. The employer knows more than you do and that’s why we are really focused on these five things. Yeah, throwing a number out first can cost you thousands of dollars because in negotiating phenomenons of anchoring and there’s all kinds of psychology here. The big takeaway is, the number two takeaway is don’t throw out a number first. Continue to not do that.

Okay, you ready to move on to number three?

Jason Dion:        
Yeah, I’m going to segue into number three here, sorry. Another reason that employers don’t want to put a number out there is also because of their existing employees. We talked about this earlier. Most employers are going to give a traditional 1% to 3% pay raise per year. If somebody started out with them five years ago, they’re making X after their X plus five years of 1% to 3%. But if I’m hiring a new person and Kip’s coming in to apply, he may actually start at X times two, because so much inflation’s happened over the last five years or so much job growth and wages have gone up. But the current employees haven’t.

This brings us to number three. If you’re looking for a new job, you don’t want to tell them your current salary. This is the same reason why employers don’t want to post salaries, because they don’t want to tell current employees what they could be making if they were a new employee. It’s like those cell phone plans, only applicable for new customers. It’s like, “Well I’ve been with you for 20 years. You won’t give me the deal?” No, you got to leave us and go somewhere else and come back in a year. Then we’ll give you that deal.

Kip Boyle:           
That’s a great example.

Jason Dion:        
[crosstalk] with employers. So number three is telling them your current salary. Kip, I know you’re a huge fan of not telling them your salary.

Kip Boyle:           
Okay, here’s why. It doesn’t matter, it’s completely immaterial. The only thing that matters is what is the market rate for the job that you are applying for? That’s all that matters because here’s the thing, your current salary is appropriate for the organization you currently work in for the duties and responsibilities you currently have. If you’re interviewing for a new job, then you’re going to be in a different context. You’re going to work for a different organization. Your job’s probably going to be different. I don’t know many people who leave one organization to interview for the exact same job at a different organization. They’re typically seeking increased responsibility. Therefore, the job should pay more on that basis if you are getting increased responsibility.

But let’s say you’re going from working for a retailer that has an online presence like Walmart and you are interviewing for a job with Google or Facebook or Apple. Well, Walmart as a business is in retailing and it operates on a fairly low margin. So they’re going to be constrained by how much they can pay you and that’s the context. If you go work for one of those high tech companies, they have incredibly high margins and they pay much, much better simply because they’re in a different industry, offering a different product and service. If you tell Apple your Walmart salary, they’re going to snap that up in a second. So you don’t want to do that. What matters is again, the market rate for the position that you want in the context that you are pursuing it. That’s what matters, so don’t tell them your current salary.

Jason Dion:        
Yeah, the only exception I can think of for telling them your current salary is if you’re using it after they’ve thrown out a number and you’re using it as a way to rebut them. I’ve used this example on the podcast before. I had somebody on my team that I was hiring, it was for a new position. We had never hired for that position before. I didn’t have a good idea of what that position should pay. So when they said, “Hey, what are you paying for this position?” I said, “I think this is a reasonable number because I went on to Glassdoor and found a bunch of numbers. It’s in this range.” I’m like, “Okay,” so I threw out a number.

Again, she was coming from a university setting. They offered a very different business model than we do. She’s highly competent in her job. She’s a very T-shaped person, as we talked about in the last episode. I said, “Hey, I’m willing to pay you X,” and she goes, “Well honestly, I’m making X plus Y right now, can you match that? I really want to work for you, but I can’t afford to take a pay cut because I’ve got a mortgage and car payments and all that kind of stuff.” Based on what she was asking, that seemed reasonable and so we came to yes, we will do that. We met her where she was based on her current salary. So she used that as a salary negotiation.

Again, this is one of those things where you talk about the total compensation package, which we’re going to get to a second, number four. We had a lot of things that we were offering that were better than the other place she was working, but we couldn’t go above what she was currently making, but we could match what she was making. It was close enough to what we offered that we said, “Yes, we’ll do that and based on performance, we can go higher later.” She joined the team and that was great.

And that brings us to number four, which is you as an employee, need to think about the total compensation package. Now, when I talk about total compensation, this is all your monetary and non monetary things that get rolled into one. Not every company has the same benefits and some benefits mean more or less to you depending on your situation. Right now, if you work for my company, we pay for medical 100% for our employees. All of my employees have medical care and we pay for it 100%. Now they probably don’t realize how much that is, but that costs me a significant amount of money. I could tell you even when I was working at the DOD, the Navy gave me free healthcare. Nobody appreciates free healthcare until they get out and they get a real job and they’re starting to pay $300 a month for health insurance through their company.

They think it’s costing $300 a month. It’s not, it’s costing the company another $300 to $600 a month on top of the $300 you’re paying. That’s just your part of it. In our company, we actually pay 100% of the healthcare costs. So if I was offering you X and some other company offered you X plus 2%, but they’re not giving you dental and medical, and I’m giving you dental and medical, mine’s actually a better package, even though I’m giving you less money in your pocket. Same thing when you start thinking about retirement plans, cost of living in the area, that’s a huge one.

If I offer you a job for $50,000 a year in the middle of the suburbs of Oklahoma someplace, that goes really far compared to if I offered you $75,000 a year in San Francisco. Seventy-five thousand a year in San Francisco is like you’re lucky to get a one bedroom apartment. Fifty thousand in Oklahoma, you could buy a whole house. It really does depend on cost of living in the area you’re in, the retirement plans they give you, do they give you matching? Do they offer 401ks? Do they offer Roth IRAs, all that kind of stuff are things that you need to factor into your total compensation. Kip, what are your thoughts on that?

Kip Boyle:           
Yeah, everything you said, I’m just nodding my head like crazy. Yes, yes, yes, yes, yes.

 Just a couple of things I’d like to add. One thing that I want to add is that it’s true that if you are going to relocate geographically, physically relocate for a job, I really like what you said. But something that’s happening right now is a lot of companies are actually converting to a remote workforce because of the quarantines to the pandemic and staying that way. And it’s causing them to completely reevaluate their pay practices. Some companies are going in one direction, which is, “Okay, our headquarters is in San Francisco, but you live in Montgomery, Alabama. I’m not paying you a San Francisco salary. I’m going to discount the salary based on a cost of living percentage, so that you’ll be able to maintain a really good standard of living in Montgomery, Alabama, but you’re not going to get a San Francisco dollar value.” Some companies go in that direction and other companies are saying, “Hey, we don’t care where you live. We’re in San Francisco. We’re just going to pay everybody San Francisco money. It doesn’t matter to us, that’s where we were and so we’re just going to stay there.”

They’re doing that to differentiate themselves, to attract the people who get that and understand it and want to take advantage of it. Just pay attention to that as well, as you go forward. This is a area of the market that’s shifting, and you need to be aware of that.

The other thing I want to give you is an example of this total compensation idea and how it affected me personally. I was negotiating for a chief information security officer job, and I was very focused on total compensation because one of the places that I applied to and ended up actually joining, had this amazing 401k plan where every $1 I put in, they would put in $2. It was a two for one match and it was all the way up to 6% or however much the max contribution was. That was before any returns on the investments themselves. I would put in $1, I would get an immediate 200% investment increase, and then that money would go to work in the market. And when I sat down and just did some basic back of the envelope math, I was like, “Holy crap, that’s amazing!” When I put that in a total comp lens, I was like, “Yes, please. I want to join your organization.” That was great.

Jason Dion:        
Yeah I mean, for me and my company, we actually just opened a new company called Dion Training in Orlando, Florida that’s actually going to be starting business at the end of the year, as we are shifting some of our operations back state side. When we move over there, we just set up the retirement plan. For all of our employees, there is a 6%, dollar for dollar match. For every dollar they put in up to 6%, we are going to put additionally 6%, it’s 100% match. Our plan, because being a small business, we don’t have the ability to do the two for one like you guys-

Kip Boyle :         
Most don’t.

Jason Dion:        
And not from a cost perspective, but our actual plan doesn’t allow it without going to a much more expensive plan that costs tens of thousands of dollars a year to run. And for a small company, it doesn’t make sense. So we just did the max we could, which was 6%. When I talked to the retirement folks, when we were setting it all up, they’re like, “Well, you could do this so you don’t have to pay them this much. And you could do this and save this money.” I’m like, “No, no, no, you don’t get it. I want to pay my people well, I want them to stay with us. I want to use this as a recruiting tool.” They had things like, “You could make them wait a year before you have to match them and you can invest it for up to three years.” I’m like, “No, no, no, that’s not what we’re trying to do here. We’re trying to create a good culture.”

Going back to your comment on a San Francisco company, whether they’re going to pay Montgomery rates or they’re going to pay San Francisco rates, I will tell you, we are an international company. I have 19 people across seven countries. People make different money based on where they live, which country they live in, which state they live in and we do take that into account. I think that’s fair to do because it costs a lot less to live in India or the Philippines or Peru than it does in Miami or San Francisco. But similarly, it is a lot less expensive to live in a place like the suburbs of Washington or something like that. Based on those locations, we do adjust for people’s salary and their expectations.

One of the benefits we talk about total compensation is, do you allow them to work from home? Do you allow them to remote work or do they have come to the office once a week or every day or that kind of stuff. Because you want to work from home and have that flexibility, you may be making a little less than your counterpart who’s sitting right next to you, who’s going to the office every day. That is a fair thing to do because it is part of a lifestyle and compensation package.

Again, these are things you had to think about, is dollar for dollar the most important thing to you? I will tell you when I was looking for jobs and I was applying, for me, being able to teach when I was working for universities, being able to teach online and remotely was my number one priority. I will take less money to be able to teach online as opposed to having to go into class every single day, because I didn’t want to have to deal with the commute and the drive and being face to face with the students and all that kind of stuff I just didn’t like and I wanted to remove myself from that.

As you are thinking about the job and your total compensation, remember these things matter too; how much vacation time you get, how much paid time off you have. In our company, we have an unlimited PTO policy so people can take off as many days they want, as long as their work gets done. That all goes into that compensation of you may accept less money from us than you would working for, I don’t know, Kip’s company or someplace else, but you’re getting all these other benefits on top of it. That’s the thing for you to think about as you’re negotiating.

Some of these things can be negotiated away as well, depending on where you’re working and the company you’re dealing with. With smaller companies, it’s easier to trade things like, “Hey, I don’t really care about that dental plan, but I’d really like have an extra week of vacation.” “Okay, we can maybe trade that for you.” Keep that in mind as well.

Then this brings us to number five. What is the fifth and final mistake that people make when negotiating, Kip?

Kip Boyle:           
They accept the first number that they’re offered by the employer, because they don’t want to negotiate. They don’t want to dicker around, these are the people who hate buying cars off the lot. They just want to see a number and make a decision about whether they’re going to pay that number or not, I suppose. But-

Jason Dion:        
Well, Tesla, you just go to the website, the price is the price, you put in your credit card and the car shows up.

Kip Boyle:           
Well, okay. But look, here’s the thing. Hiring managers expect you to negotiate. Guess what, when we are preparing an offer, we have contingency money in case you come back and drive a hard bargain. Just imagine that when you get the offer that there is 10% more money, all you have to do is ask for it and you don’t even have to ask really hard. You don’t. You could say something as simple as, “Hey, Jason, thank you so much for the offer. I really want to come work with you at Dion Training. I have one question for you. Is this the best salary that you can offer me at this time?”

Jason Dion:        
Yep.

Kip Boyle:           
It could be as simple as that. You could get more elaborate in your negotiation techniques. My gosh, there’s books and books and books out there about how to negotiate, how to get to yes. How to get to no, whatever. You can go crazy, but the thing that I just shared with you will usually work. So you should at least try that. But what’s interesting is that the data, because there’s been lots of research on this, the data shows unfortunately, that women are more likely to accept the first number that they’re offered than are men. I don’t know why, and I’m not going to speculate why it is. I’m sure if we pulled up the studies, there would be something in there to say about it. But don’t do this, there’s just no reason to. I hope I’ve been completely clear with you that there’s almost always some contingency money in case you ask for more.

Jason Dion:        
Yeah, and just to keep the numbers really easy, I’m just going to use let’s say, “Hey, Kip, I want you to come join our team. We’re going to pay you $100,000 dollars per year.” That’s the offer. If he comes back and says, “No, I need one $120,000,” that’s pretty far from where I started, that’s 20% increase. So he better have some justification for why he wants $120,000 instead of $100,000. But if he came back and said $105,000, $110,000, we’ll probably just be like, “Sure, for $5,000 or $10 grand, I’m not going to lose this guy. I want him.” And I’ll take him because again, we’re talking 5% to 10%. Keep that in mind when you see the number of how much you can negotiate and how far you can pull it. But you also don’t want to be too far. If he came back and I said, $100,000, he says $130,000, I’m probably not even going to mess around with him. I’ll be like, “Apparently we’re just on different planets. You’re just going [inaudible].” I mean, 30% is a really big, far away.

Kip Boyle:           
Let me say something about that though. Remember, the vision that we have for you, our listeners, is we want hiring managers to see you as absolutely irresistible. They want to be so fascinated and enamored by you that they’ll do almost anything to have you on their team because you’re going to present yourself as this person who can solve real problems with your combination of great technical skills and great people skills and so on and so forth. All the things that we’ve been sharing with you in the prior episodes. Here’s the thing, if you can do that, then you’re going to get a strong number right off the bat. And when you ask, “Is this the best offer that you have for me,” you’re way more likely to get more money. I mean, it’s as simple as that. So really focus on being irresistible, do these things that we’re suggesting.

Jason Dion:        
And remember, as Kip said at the beginning, where you establish yourself. Let’s say you took this job and you guys negotiate back and forth and you finally ended up at $100,000, because again, I’m going to keep my numbers nice and easy here because we’re doing public math. It’s $100,000 dollars after you negotiate. Maybe they offer you $90,000, you got it up to $100,000, great. You’re happy, you’re working there.

Well, next year comes around and it’s time for your annual performance raise. What are you going to get? Generally, 1% to 3%, this year a lot of companies are doing 5% because inflation’s at 10%. But even so, that means you’re falling behind based on where your money goes. But let’s say you got 5% this year. Well, now you’re at $105,000. Next year comes around, you’re ready to go again. And they go, “Okay, well now it’s another 5%,” 5% of $105,000 is, I don’t know, $111,000 or something like that, $110,000, $111,000, somewhere right around there. I think it’s $110,500.

As you do that, you’re going up basically $5,000 a year because 5% on $100,000 is about $5,000 a year. That’s great and after two years, you’re now making about $110,000. Well, if you had left and gone to another place, they may have been starting salary at $110,000 after a year or $120,000 or $130,000. A lot of times where you’ll see the biggest jump in your salary is when you go and leave for another job. Like I mentioned earlier, I don’t see a lot of people going and doing lateral moves. That’s probably true on his side where he’s dealing with commercial sector, banks, insurance companies, sports teams, things like that.

I will tell you on the DOD side and the DOD contracting side, I see people do lateral movements all the time because they can go to a place for a year or two, go to another contract company. They’ll go from Booz Allen to General Dynamics, they’ll get a $10,000 or $20,000 bump in pay. Then a year or two later, they’ll go back to the place they were at before and they’ll get another $10,000 or $20,000 bump in pay. Whereas if they had stayed in that company the whole time, they would’ve only gotten maybe $5,000 or $10,000 over that two year or three year period. Now they got a $40,000 bump because they left and came back. It’s weird, but it’s just the way that world operates, so keep it in mind. On the commercial side, some companies will hold that against you. If you leave us, we’re not going to take you back. So in the government-

Kip Boyle:           
Or if you job hop. If they perceive that you’re a job hopper, they won’t bring you in.

Jason Dion:        
Yep, or they won’t invest in you if they do bring you in because they won’t give you training and things because they know you’re just going to leave them anyway. This is one of those things where you got to know what your career path is going to look like and where you are, whether it’s in the commercial side, the military, DOD contracting side or whatever, because that is going to make a little difference as you start doing this and whether you’re going to job hop, or you’re going to try moving up in your current field over a long period of time with the employer you’re at. But either way, whatever your starting salary is, that’s what they’re going to base your raises on. So you want to make sure it’s as high as salary as you can because it’s more money in your pocket and more percentages as you move forward every time you get that 5% or 10% raise.

Kip Boyle:           
Exactly. Cool.

Jason Dion:        
One more time, we’re just going to summarize what we had here and then finish up the episode. The top five mistakes people make when negotiating. Number one, using salary information from Glassdoor and other public sites, because guess what? The employer knows better because they have access to the salary guide and the salary database that they subscribe to, which actually has more realistic numbers. Number two, throwing out a number first. This can cost you thousands of dollars in any negotiation, not just a job. If you’re trying to buy a car and you’re working with a salesman, they’re going to try to get you to put a number first. Make them give you the number first. Number three, telling them your current salary. They’re going to use this as a baseline to figure out what they’re going to offer you. If you told me you’re making $50,000 a year and my job was going to be a $100,000 job, I might only offer you $75,000 because I’m like, “Hey, he’s getting a 50% pay increase. He’ll be happy to take that,” even though it would’ve been double if you’d not told me your salary.

Number four, not factoring in your total compensation. This includes things like vacation time, work from home ability, tele work capability, working from the satellite office once a week, whatever it is. Medical, dental, retirement, cost of living, all those things that all goes into your total comp. The other thing that we didn’t mention in total comp that goes into it is if you’re working in the cybersecurity world and you’re working for a small startup, a lot of those places will pay less money, but you’ll have stock options. And if that stock goes to IPO later, you can make millions off of that, big money. But it’s a risk and it’s a gamble. All those people who worked for Uber and Airbnb and [inaudible] and all those places, they’ve done really well with their stock options, but you also could go to zero. Then number five, accepting the first number they offer, which basically just means you’re not negotiating. If you’re not negotiating, that’s really a big mistake in negotiating because you’re leaving money on the table.

That is what we have for you today as far as the top five mistakes. As I said at the top of the episode, I would love it if you go over to yourcyberpath.com and sign up for our mentor notes. Kip, what can they expect to get in the mentor notes from you every time you send those out?

Kip Boyle:           
Yeah, I’m going to send a mentor note out to you every other week. It goes out on Friday afternoons so that you can enjoy it over the weekend. What I talk about in there, is different things that people who are coming into cybersecurity for the first time really need to know. Things that are going to help you. For example, recently, I was writing a mentor note and… Oh, what was this one here? Let me look it up real quick. Here we go, we just sent one out recently and what I talked about was showing too much passion for cybersecurity after you get the job. Because we actually did a podcast, it was episode 68, where we talked about demonstrating too much passion for cybersecurity during the interview process.

That’s where you come in and you say, “Oh yeah, I hacked your website for you. Here you go, here’s my report.” Or, “Hey, I hacked your competitor’s website. Here’s what I found out.” One example, the podcast we give many examples, but I wanted people to realize that even if you can manage to contain yourself during the interview, there are things that you can do after you get on the job that will get you in huge trouble. In that mentor note, I talked about what some of those things are. Not only do I want you to get into cybersecurity, but I want it to be successful for you. I want it to be a really great experience. These are the kinds of things that I’m going to share with you.

Jason Dion:        
Yeah. I mean, when we talk about Your Cyber Path, we’re not just talking about getting you into the career. We want to walk alongside you while you’re in the career too. Some other ones I’ve seen Kip do in the past, he’s talked about things that were the latest vulnerability that came out. Actually when you were visiting me and we were recording the new cybersecurity framework course, there was the blue waffle, I think it was called.

Kip Boyle:           
Blue waffle?

Jason Dion:        
It was something waffle, I thought. I don’t know. There was some kind of vulnerability that came out. This was back several months ago, maybe six, eight months ago. But there was some vulnerability that came out and so your mentor note that week was about what this vulnerability was, why it’s important, what you should look for. It has some of those very tactical things as well.

Kip Boyle:           
Sometimes.

Jason Dion:        
[crosstalk] week, sometimes it’s very tactical. Sometimes it’s very career focused. It’s always good content and we try not to overwhelm you, because like I said, it’s once every other week. Definitely worth signing up for no, cost to you. It’ll keep you in the loop and we’ll let you know every time there’s a new podcast [crosstalk].

Kip Boyle:           
Really easy to unsubscribe. Give it a try, if you don’t like it, no problem. There’s an unsubscribe link right at the bottom. We don’t try to trick anybody with trying to keep you from unsubscribing, nothing like that. Give it a shot and we’ll let you out with no trouble if you realize it’s not for you.

Jason Dion:        
Yep, no cost, no trouble. It’s very risk free, great way to stay involved and connected with us. That’s what we had for you today as far as for this episode of Your Cyber Path. We look forward to seeing you next time in episode 75. But for this episode 74, these are your top five mistakes people make when negotiating and we’ll see you next time.

Kip Boyle:           
See you later.