21 Aug Optimizing Salary Negotiations With the 3rd Party Effect
You’re a really talented developer.
You wrote and deployed the code for a site that quickly achieved 1M+ monthly active users. Once the site hit 5M+ MAU, you refactored the entire code base. You care about what you do and you do it well.
So when it comes time to enter your next salary negotiation, it’ll be a walk in the park, right? Your resume speaks for itself! Well…not so fast.
Problem is, no matter the legitimacy behind your supposed amazingness, it’s simply human nature to be skeptical of anyone who speaks extremely highly of themselves. Self-labeling as a “tech-prodigy” probably does more harm than good, even if you deserve the title.
Fortunately, there’s a time-tested solution to this problem: Bring a third party into the negotiation. In this post, we’ll explain why the Third Party Effect is a key factor in getting the best deal possible when negotiating your salary, job offer, or compensation package.
What is the Third Party Effect?
The Third Party Effect is not to be confused with the Third Person Effect, an unrelated theory commonly studied in communication. In the context of negotiation, the Third Party Effect occurs when someone other than yourself offers guidance or vouches for you and the value you bring to the table. (For an extensive discussion on the Third Party Effect, check out the chapter titled, “The Third Party Effect” in our upcoming book, Game Changer).
At 10x Ascend, our specialty lies in putting the Third Party Effect to use. We’ve mastered the art of influencing negotiations as a third party, and our clients reap the benefits in the form of better compensation packages.
2 Key Benefits of the Third Party Effect
At its core, the Third Party Effect can be leveraged to achieve two key things in a negotiation. First, it eliminates the braggadocious perception that often comes with highlighting your own successes. Second, it mitigates the chances that you undersell yourself and downplay your value.
1. Eliminating a Braggadocious Perception
As discussed above, having someone else brag on your behalf is perhaps the most obvious benefit generated by the Third Party Effect. You’ve seen this in action dozens of times. Take, for example, any event where a keynote speaker is introduced by a host. There’s a reason the host lists off the speaker’s accolades, instead of letting the speaker do it themselves.
We tend not to trust people who outspokenly express their self-approval. But of course, negotiating better terms of a contract requires you to make your case and explain your value. So unless you have a third party in your corner in some form or another, you’re almost forced into this process of having to explain why you’re so great.
2. Mitigating the Chances of Underselling
Here’s a shocker: Not everyone feels comfortable explaining why they’re so great! And that’s nothing of which to be ashamed. Those who are humble and modest should be praised. Humility is an excellent attribute.
One of our core realizations when founding 10x Ascend was that top-tier tech talent doesn’t actually know what they’re worth. Whether it’s because of discomfort, humility, modesty, or simply not knowing the market, talented developers don’t maximize their salary negotiation potential.
As experts who study the tech industry, our specialty lies in negotiating the best deal possible. And by having us do it, you don’t have to worry about asking for “too much.” You get to maintain a humble reputation while we get you what you deserve.
For both of these key benefits, note that a third party can play a major role even if just from the sidelines. In many of our Ascend deals, we take on the role of the coach and advise our clients on how to navigate their negotiations. This gives the client a legitimate fallback – they can refer back to their “team of experts” as the reason why they feel justified in their logic and reasoning.
Additional Benefits of the Third Party Effect
Aside from these key benefits, the Third Party Effect offers a number of additional perks, discussed below.
Not Getting Distracted by Your Salary Negotiation
There exist a handful of reasons high-level athletes, musicians, and entertainers pay top dollar for their agents. Among the most important is the notion that while important, negotiations are distracting. Contracts, clauses, terms, conditions…to fully understand a business deal takes time and dedication.
Steph Curry didn’t become the NBA’s best shooter by studying contracts. Obviously, his time is better spent getting shots up at the gym. Although you’re likely the master of a different craft, the same principle holds true.
As a top-tier developer, engineer, or coder, you shouldn’t have to worry about the fine-print of your next compensation package. Having someone coach you through your negotiation is a great way to remain focused on the next challenge or project in your queue.
Avoiding the Awkwardness of Negotiation
We’ve written about it before – negotiation breeds conflict by nature. Although we maintain that conflict doesn’t have to be such a bad thing, we recognize that going back and forth on terms can be awkward, especially when representing yourself.
Assuming an agreement is reached, you’ll soon be working closely with those on the other side of the salary negotiation. Best to start fresh with your new client or boss without any preconceived notions influenced by the back and forth of your compensation negotiation.
Again, whether your third party is negotiating on your behalf or simply providing counsel, they can play the key role of the scapegoat. During your negotiation, you were simply listening to your team of experts and relaying their advice!
Leaving It to the Experts
Whether it’s through a service like 10x Ascend or with the counsel of some other expert, rest assured that a professional negotiator will maximize your negotiation potential.
There are good and bad ways to engage an employer when working out the details of a contract. Sometimes it takes a little creativity to get what you want. And sometimes you have more leverage than you even realize. No matter the negotiation, it’s always beneficial to lean on a third party who has your best interest at heart.
For freelancers or consultants being wooed by a company and willing to shift focus to a more traditional full-time work arrangement, giving up an existing client base is a big risk.
Freelancers know how much of a grind it can be to develop a stable and consistent set of clients. It’s hard work. And once you make the decision to move on from those clients, there’s no guarantee that they’ll want to re-engage in the future. Even if they loved your work, chances are they’ll start working with other contractors the moment you leave.
To leave your client base behind is to put a lot of faith in the idea that your new arrangement will work out. For those in this situation, a compensation package should clearly account for the fact that you’re playing a zero sum game–you’re winning in one area and losing in another.
Final Thoughts on the Third Party Effect
We’ve covered a handful of ways in which a third party can be a game changer as you enter a salary negotiation. But perhaps above all else, leaning on experts provides peace of mind that you won’t be leaving anything on the table.
We live in a time where top-tier tech talent has more bargaining power than ever before. Don’t let it go to waste… Leverage the leverage!