An Elite VP of Engineering Was Made an Offer - He Countered and the Company Rescinded...

I'm sure a lot of us see an economist on TV or we read somewhere how reference is made to this economic pullback not being on the same level as 2008's financial recession or the 2001 dot.com bust. But there are stories out there where it's clear that compared to 2021, we have crashed. Whether it be startups that were touting their unicorn status last summer and are now laying 35% of their staff or Meta's, 13% workforce cut that impacted a lot of Austin based engineers, if you don't like using the word "crash" then perhaps a more apt term would be "hand landing"?

This is the story of a very strong VP of Engineering/Data Science who is reognized throughout Austin as being a great engineering leader. And like a lot of incredibly talented IT professionals in the past six months, he was part of an unexpected layoff at what was once a high flying startup. Let's call him, Ben.?

Ben is a 20+ year veteran and his expertise is all things data and Data Science. Brilliant technical background and to complement this, he has great communication skills and a genuine personality as well. Really cool guy. When his employer announced the layoffs this past summer, he had the luxury to take some time off before starting his search. So he did some vacationing with his family and in September of this year, started reaching out to his network as well as applying to some jobs. I think it was the first time he's applied for positions since 2010 because he's so well known in town. Anyways, in approximately five weeks, he received an offer from a Bay Area startup to be their Director of Data. When all of the details of the offer came in, Ben emailed them over to me and I'll share them now,?

220k base

Director of Data Science

No annual bonus, no signing bonus

45000 option, 4 yr / 1 yr cliff vest - But I have no idea of the # of shares outstanding.?

Lots of monthly stipends for commuting, telecom, etc. but it looks like I will have to travel out there quite a bit.??

The company is definitely interesting and I do like the role but for this?offer, I can't help but think it's a bit light in comparison to what I think I am able to pull in (ie 250k+)

When this note was sent over to me, I could not stop staring at the 220k base salary. Shortly thereafter, Ben and I spoke on the phone and we discussed a counteroffer. I mean, who wouldn't counter this, right? There were several areas to touch on but the main items were the base salary, moving the title from Director to VP of Data Science and inquiring into the relative value of the stock options being offered. Emotionally, I was sensitive to the company's reaction given the current labor markets in the Tech industry. We discussed not playing hardball too much with the counteroffer. In fact, when finishing out his note on the updated offer, I suggested communicating to the company that if the adjustments can be met then he will open up the offer in Docusign, initial the required fields, electronically sign the offer confirming his acceptance and email it back immediately. These final words would let them know that even though he was countering their offer, his inclination was to accept and become part of this company.?

We finished our call both feeling really good about this opportunity and given we had spoken on a Saturday, his plan was to email the company Monday morning with his requests and we were thinking that in 1-2 business days, this would be wrapped up. I heard from Ben and he kept a really solid hold on his emotions, much better than myself because I could not help expressing, dare I say, my anger towards this company for their response. They rescinded the offer. Here are Ben's exact words on what happened,?

I offered up the additional considerations (some monetary and some not). They "accepted" my proposed start date and giving me a formal review in 120 days. They rejected my suggested title change (to VP), double trigger vesting and the 230k salary. I put a severance package on the table and that was declined as well. Two business days went by and I bent a little on my end.?I adjusted my counteroffer to reflect only the severance package and the VP title (I finally decided to accept the 220k base and dropped the double trigger vesting) and it was at that moment that they rescinded.?

I'm very OK with this. Both sides held their positions and walked away (I was pretty sure they'd rescind when I countered their counter). I found out that they are going to adhere very tightly to their budgets and organization design, and they found out that I value myself a wee bit higher than they did.

Whether it be negotiating an offer or buying a used refrigerator at a flea market, the traditional pattern of back and forth negotiation most often goes like this,?

1.?Company?- Offer

2.?Candidate?- Counteroffer

3.?Company?- Counter to the counteroffer.?

4.?Candidate?- Final counteroffer

5.?Company?- Communicate that item #3 is their final offer or slightly adjust and communicate #5 being final offer.?

6.?Candidate?- Accept or decline

Ben very politely took the negotiation process to stage #4 and countered the company's counter offer. He accepted the 220k salary (which was an absolute steal for the company given Ben's experience) and dropped the double trigger vesting as well. The only two items he held on to were the severance package and the VP title. Yet the company still walked away. So rather than getting to the end of the negotiation process, the company showed they were short on patience and rescinded the offer. My only guess as to why they did this had to do with the current labor market. Compared to one year ago, candidate pools are much larger and negotiating leverage has swung all the way over in the favor of the companies that are still hiring. That said, I couldn't help but question how much this company really wanted Ben and how much they would have appreciated the leadership and data engineering expertise he would have brought to the table.??

When companies make these kind of offers and refuse to negotiate on them, it can serve as a pretty big red flag when it comes to appreciating your contributions. Another quick story about myself. My first recruiting job was with a staffing agency in New York City and in 1995, they offered me a base salary of 28k with a small annual bonus. First year income was approximately 35k. The work schedule was 52 hours/week and management made sure you didn't work a minute under that figure. Adding it all up, I clocked roughly 2500 hours my first year at the company and earned 35k. I don't need to tell anyone that kind of hourly rate that equated to. I rented a bedroom in a really rough part of Manhattan. I also realized that I was pretty much treated like an idiot at the company too. Granted I was a junior recruiter but the overall sentiment towards me was one of disrespect. But looking back, I don't blame them one bit at all.?I mean, how could you fully respect someone that would willingly work those kind of hours for that kind of money? To this day, when I cross paths with some of my former coworkers, they still look at me funny. Wearing business suits every day while making 14 dollars per hour living in Manhattan??But unfortunately, I had no other options in life at the time and had to take what I was given.?

What if Ben accepted their offer??What kind of working experience would he have had there? How would he have been seen by the other leaders in the company, especially knowing that he would have been the lowest paid executive? Another nice experience that comes with offer negotiation is that it shows the candidate just how much a company wants them. Ben's counteroffer was very fair in my opinion and his negotiation etiquette was 100% professional. Yet, the company still rescinded and walked away. In the bigger picture, this experience tells me that they weren't respecting Ben's experience and abilities nearly as much as they should have been. They might have even commoditized them by assuming anyone else could have come in and done the job in similar fashion.?In the end, this was the company's loss because I know Ben well and he would have knocked it out of the park with this company.?

It's still hard to grasp just how far the tech labor markets have fallen. One year ago, any Director or VP of Data Science in America would have laughed at this offer and politely told the company to hit the highway. But like I mentioned earlier in this post, as applicant pools swell and resume submittals grow on a daily basis, the sentiment and tolerance that companies have towards the candidates they make offers to is being impacted significantly. If this company's VP of HR felt like they had five other candidates in the pipeline of similar skills and experience to Ben, why bother with all of the back and forth??If there were one piece of advice I would have given to the company's internal recruiter who was managing this process, simply out of respect to Ben, the company should have communicated that their revised offer was their?"last and final".?But I guess they felt like that wasn't necessary.??

Let's hope we're getting close to a labor market bottom because the last thing I want my reading audience to get acclimated to are salary offers significantly lower than they were a year ago as well as a significant uptick in offer rescissions. Offer negotiation is an art form and it's very healthy for both the candidate and the company. Candidates make counteroffers mostly out of pure curiosity.?Their main goal is to explore and eventually realize a company's best and final offer. And when that moment comes, there is this great sense of accomplishment for the candidate. But what a lot of people don't realize is the great experience that the company gets from this as well. There is tremendous value in the company telling a candidate that this is their best and final offer. Those words are never put in a contract. It's either written via email or communicated over the phone. So there is this element of trust at play. And when the candidate accepts that final offer, to a degree, the candidate is extending their trust to the company.?This makes the moment very special. In the very end, the company did everything they could to get an acceptance and that includes asking the candidate to trust them.?

Ben is a class act and whether he's the hiring manager or the candidate, he's negotiated hundreds of offers in his career. He always aims to get to this special destination, ie. the moment of trust. That is all Ben was looking to do here but instead, the company packed their bags and walked out the door. Shame on them and again, it's their loss.?

Thanks,?

Mark Cunningham

Technical Recruiter

512-699-5719

[email protected]

https://thebiddingnetwork.com

https://markcunningham91.blogspot.com

https://www.dhirubhai.net/in/markhc