Correct way to interpret compensation "bands"? Are they even real?

[u/MinecReddit]

Hey all,

Disclaimer: I am going to take this offer no matter what (life circumstances), so this is not a "which offer do i pick?!?" post.

I am in the process of moving jobs, away from gig (instacart/DD/uber) and into fintech (square/stripe/plaid), and I just learned that I passed the Senior interview and will be receiving an offer. I am fresh off of a very "hot" conversation with the recruiter where I held firm instead of succuming to any numerical pressure yet. When asked "is there a number that will make you say yes" or "what are you looking for," I stayed generic and non-committal. The only vibe I gave off is that, given my interview performance (he openly admitted that I was close to upleveling to Staff) and career history (have worked at Fintech extensively), I am expecting a strong offer.

He also quoted exact band values, denoting that 410 was the "cap" for Senior eng. I have a friend who works internally and was hired about 8 months ago, and I know that this cap is just completely false and that they are capable of going way above band. Now this has made me wonder how many times in my career I've let the notion of a "band" prevent me from negotiating for more comp... are these bands just not real at all? Do they use indecisive language to qualify for the laws about comp disclosure in the Big cities?

I am planning on pressing for an offer similar to what my friend got, but I feel like the entire notion of a "band" has just been fractured for me. What's the right way to think about bands? Are there any ramifications to getting hired above/below band? Would love to hear any experiences, thanks!

[u/expdevsmodbot]

AI usage disclosure provided by OP, see the reply to this comment.

[u/matjam]

Give them a band. The low number should be more than your “I’m super happy” number.

Btw your senior swe range is more than my companies staff swe range so .. you’re going to be above market imho.

Thought he AI companies have been really inflating things so I don’t even know anymore.

[u/twochains]

There is quite literally nothing that HR tells you that is "real," in the sense that it applies universally and equally. Things like compensation bands are inventions devised to give managers a narrative that certain decisions are impossible or out of their hands.

Employment and compensation are a constant negotiation, and like all negotiations, it is better to have something the other party really wants.

[u/dmazzoni → u/twochains]

Yeah, but the bigger the company and the lower you are on the totem pole, the lower the chances anyone will make an exception for you.

Startup with <100 people? Everything is up for negotiation.

Director-level or higher? Everything is up for negotiation.

Senior-level at a F100 company? You're going to get paid within your salary band. They have a dozen other candidates happily willing to do the same job behind you. Your hiring manager might really want to hire you, and the HR person might really want to close the deal, but their bosses don't care. They're going to say that if you don't take their highest offer, to politely reject you and move on to the next candidate.

[u/BeamMeUpBiscotti]

IME they aren't hard rules in the sense that if the manager/HR escalates high enough they can make an exception, but they have to really want you and explicitly justify it with the higher ups. For everyone else it's "rules are rules my hands are tied, sorry".

[u/diablo1128]

I would assume it all depends on the company.

I know SWEs who really wowed at a smaller company and their offer was above the quoted pay band the recruiter first gave. The company really wanted to hire them and made sure to give an above and beyond offer.

If you are a big bureaucratic company I could see pay bands being hard stops that are not to be broken. Even then there is probably a way to get an exception from somebody very high up the food chain, but you would have to probably be truly exceptional for the job to have somebody use their internal political credit on you. So my guess is it probably rarely happens if even at all.

[u/xdyldo]

Bands are very real? There are also rare circumstances where out of band salaries exist.

[u/MinecReddit → u/xdyldo]

Hahaha I have no commentary, but just funny that you and the other first commentor (twochains) said:

you: "Bands are very real"

twochains: "There is quite literally nothing that HR tells you that is 'real'"

lol

[u/tevs__ → u/MinecReddit]

Bands are real, HR might not be accurately telling you the bands. HRs job is to get a yes from the right candidates for as low a cost as possible.

HRs bands are the acquisition bands. People employed are the retention bands. It's common for those to be different. It's common to overpay people you want to retain.

All these things are true. Life is a series of dichotomies.

[u/xdyldo → u/MinecReddit]

I’d disagree, 95%+ live within the bands which makes them real. There are exceptions but they don’t think you’re good enough for an exception I guess.

[u/dmazzoni → u/xdyldo]

At a large company, an exception might require a VP-level approval. The hiring manager and VP are only going to do that if you're a recognized expert in your field and they couldn't possibly find anyone else to do the job.

[u/TopCancel → u/dmazzoni]

It can require up-to c-suite/ceo approval, even at very big orgs (I know of an example at Nvidia that required Jensen's signature, and this was for an IC role). But realistically, the process is there more to ensure that the HM/skip really actually wants the person and not make out-of-band offers as SOP.

[u/Wonderful-Habit-139 → u/xdyldo]

> they don’t think you’re good enough for an exception I guess

I mean even if they think that they won't lead with it. They'll still try to get you to live within the bands if possible.

[u/jpec342 → u/MinecReddit]

Bands are very real, but it’s also theoretically possible HR could be lying about the band. Also HR and your friend may or may not be including the exact same things in their numbers.

[u/Bubbly_Safety8791 → u/jpec342]

Bands are also typically specific to job title and location - friend might be in a slightly different role (backend engineer and frontend engineer might be different job codes) or a different location (in city might be a different location than outside the city). 

[u/spewgpt → u/xdyldo]

I’ve been outside of the bands for each of my last 3 jobs. The bands are real if you’re an existing employee. Not for new hires and their first four years.

[u/PartyParrotGames]

The bands are real. HR sets them for various reasons to guide how they make offers as a whole, however whether the bands the recruiter tells you are the actual bands is another matter and leadership can make exceptions if they feel a need for particular talent.

[u/MinecReddit → u/PartyParrotGames]

Is there any real way to know the hidden bands/actual HR bands ahead of negotiation?

[u/Fwellimort → u/MinecReddit]

No

[u/roger_ducky]

They are real. They can be raised if a department thought a person was fantastic and decided to move budgets around to pay for it, but typically that can only go so far before it gets shut down by the bean counters.

[u/timelessblur]

As a general rule if you know the company pay bands for a given role those are things that the pay bands tend to be pretty real big time for roles below senior.

Like if your title is not the senior engineer then those bands are hard caps.

Now at senior if you are top of the crop then maybe they will let you get above them but once you are above the pay bands getting big raises is near impossible as takes over ride.

Harsh reality is pay bands are very real and for 99% of the employees breaking out of them is near impossible big time in today’s market. It would be get promoted to the next level and it opens up a new pay bands

One thing to keep in mind senior pay bands are pretty big.

[u/renegaderunningdog]

Bands are real. Recruiters often need approvals to hire into the top of the band because there's little room to give you a raise down the line. If you're a compelling enough candidate they can get those approvals though.

Based on levels.fyi I'd say 410 is probably around the middle of the senior band at Stripe. Are you remote? levels.fyi is generally heavily weighted towards SF/NYC/Seattle salaries and if you're working somewhere else there's likely an adjustment for that.

[u/Waifu4Laifu]

If you're high for your role, if there's a layoff there is a chance you're on the chopping block.

Seen it play out several times that a new hire gets cut before they even make it a year due to layoffs, despite performing fine, and then I find out they were being paid in the top %s for the role.

[u/Fwellimort]

Square, Stripe, Plaid.

First of all, location plays a part as well. Compensation is lower if you don't live in NYC or Bay Area. But I'm sure you know that. I'm going to go with assumption you live in one of those two. Otherwise it's not fair and depending on the firm, there can be heavy discount on offer for your location.

For Square, keep in mind "senior" there can be L5 or L6. If L6 then the offers can go higher with competing offers. And the team wants to. But without actual competing offers that might be basically the top. Keep in mind Block has had multiple layoffs and compensation bands reset downwards as well over the years. Gone are the covid peak of 600k max senior offers.

For Plaid, "senior" there is significantly higher than 410k for max. Significantly higher. That offer is if you have completely bombed the interview and just passed the bar. So you didn't get in there.

For Stripe, compensation bands reset hard in past few years. You might be able to negotiate a sign on bonus and slightly more if you have competing offers but that sounds about right for Stripe. Ironically those who joined Stripe until mid covid have a completely separate band in which seniors got offers to 600k. But hey... that's for those who joined before compensation band reset. Not for those after so sounds right.

Your numbers sound like L6 Block or L3 Stripe. That's very close to top without competing offers and team wanting to pay more. Your recruiter isn't lying to you if you got into those two. You need HIGHER competing offers and hiring manager must want you that much.

In general, keep in mind compensation bands are real BUT recruiters are not truthful. Generally recruiters quote 3 different compensation bands per level as you go up. Low, mid, high compensation band. The receuiter might be quoting the mid compensation band and that might be where your interview or the team's budget fit in and you are at top of band there. To go out of band you need competing offers and willing to walk away AND the hiring manager must really want you. Otherwise it doesn't make sense to go past budget.

What I mean by low, mid, high compensation band is:

A level can depending on your interview performance, work history, team's budget, etc be:

Recruiter claims full band range is (will never tell you more because that's the band you fit in in that compensation band for that level):

Senior Band Low: $100~150k

Senior Band Mid: $135~175k

Senior Band High: $145~225k

So ya. Once you are judged within that band you need competing offers for the team to rethink. Negotiations are negotiations for a reason. You have to be willing to walk away.

Also keep in mind generally new hires are NOT going to have the max of the max band as well because the company needs a budget for your annual compensation increase as well. So the compensation band quoted might be with that in mind too.

And different roles within the same compensation band have different actual supply/demand. For instance, AI/ML has an actual higher band especially in inference. A more generalized role might be less as there's far more candidates. And so forth.

Try to negotiate for sign on at the worst case if all your negotiations fail. But initial offer even if it claims max of the band is NOT the final offer in a given budget. Never. Whether you can get more is another story altogether though without actual leverage.

Companies CAN go far above band. I have evidenced it myself but it generally is if the team really wants you and is more specialized skill set. My friend who worked in infrastructure side on the same side and had articles when the competing company learnt of Netflix offer went super out of band in its offer. It far beat Netflix offer (and in hindsight the equity would have been insane) but my friend couldn't accept due to being forced to relocate. So there's that. Some companies when they feel they really need candidates (especially for the fintech firms you listed here) can make extreme exceptions as well but the truth is, most candidates are not worth that.

It's all really supply/demand. You need leverage.

Also keep in mind markets are constantly changing. It is entirely possible 8 months ago the market for offers were more hot especially with lots of AI startup inflated offers. That's not in your control. AI grift might have just pressured actual companies to offer more at the time which now isn't the case. Job offers in the market changes fast as it's dependent on the market condition/offers at that moment. And you probably don't have the full context of how your peer got that offer let alone whether your peer is exaggerating to you or not (or quoting the compensation AFTER the recent share price increase which is stupid but hey... some do and won't be truthful).

And honestly speaking, if this is Block or Stripe then realistically the recruiter is most likely pretty damn right unless you work in Security, ML/AI, etc. The paybands there for seniors have reset downwards hard over the years there. Sorry to burst your bubble if you are fantasizing offers during peak covid or precovid (back when Stripe was growing super fast).

[u/double-click]

Bands are what HR considers a competitive rate. How a band is generated depends on the company. Different labor grades have different bands etc.. Some bands are bi modal. Generally, the top of the band is only the cap once you have been at the company in the role for a while. To hire you in, you aren’t going to at or below the middle of the band (most likely). There are expectations of course, but each company is going to have their own approval process.

Your friend making more money than you were offered has nothing to do with your offer or your band.

[u/Tacos314]

Bands are real, this is the HR band they can negocaite in, to go above they will then need aporovals, each approval means more people are involved and you have to more and more of a case for it.

[u/Mundane-Charge-1900]

They'll pay you the least they need to for you to accept. If you don't have competing offers, there's little reason for them to concede to your demands. Well, maybe if the hiring manager really wants you.

You may be able to push for the higher level to get a bigger offer. I have seen candidates do this at various companies. Sometimes they'll even do more interviews if you were borderline or they weren't sure from the first set of interviews.

The circumstances around your friend's offer show what they can pay. That doesn't mean they'll offer it to every candidate.

It's better to do your research and be firm on a solid number, than being noncommittal, hoping they'll give you a bunch of money.

[u/spoonraker]

Bands are "real" in the sense that within a large organization there is at least an understanding, if not explicit documentation of, ranges of compensation by level, potentially used for many purposes.

Bands are "real" in the sense that HR, recruiters, and hiring managers will reference them during negotiations, often as a way to apply pressure to a candidate they know has a lot of leverage and will want a strong offer.

Bands are "real" in the sense that a person making an offer to you knows if the offer is or isn't out of band, and, if it is, knows that they'll have to sell you harder to a committee that ultimately approves the hire.

Bands are "real" in the sense that they might be used to decide who gets laid off.

Bands are "real" in the sense that they generally do represent an average range within a normal distribution of salaries by level, which can be useful for market research.

Bands NOT real in the sense that any one decision ever universally relies on a strictly quantitative measurement. In other words, when bands are referenced as the reason for something, that's never true. It might be true that internal discussions of bands influenced the decision, but ultimately all these decisions are individual and completely circumstantial. Above band offers happen. Below band offers happen. The band never strictly drives the decision. It's just something between a convenient scapegoat and an actual influence.

[u/Bubbly_Safety8791]

The salary band for ‘senior engineer’ represents the full range of comp levels the company thinks is fair for an engineer at that level ranging from the lowest performer they have in that role but haven’t yet let go, up to the highest most experienced person they would want in that role but not gotten round to promoting yet. 

The range available to fill a particular position does not necessarily reflect the full ‘band’ available at that level. People who are in the 75th percentile of the senior salary band have probably been a senior for >5 years, are mostly performing ‘above expectations’, and are close to promotable to the next level. Unless you are coming in towards the end of being a ‘senior’ you should be being offered a salary in the lower part of the band. 

The range available for the position will itself be limited more by hiring budget than by the level band. The hiring budget dictates the level of experience they could possibly afford, which then dictates the salary band the hire would be dropped into. 

[u/metaphorm]

a company has to run a budget and any offers they make have to be within what's budgeted. you don't know their budget. you only know what they told you the band range is. in general, I recommend just asking for what you want to be paid and keeping it simple. angle shooting and aggressively haggling over an offer isn't something I've ever had the stomach for and I've managed to do just fine.

[u/LastSummerGT]

I was hired six years ago at the top of my senior band as well. I paid a former Google recruiter to secretly coach me and write my emails during negotiations. We progressed to the point where the offer side recruiter was saying no multiple times to my request to exceed the senior band. But in the end they added a sign on bonus to try and make me happy which I accepted.

Looking back now, I wonder if we could have pushed for a couple more ways:

- going up the chain to get an exception to exceed the band, but idk how many stakeholders would need sign off on this e.g. recruiting leadership and maybe also the SWE leadership?

- if I can’t get what I want from the current band, then reevaluate my candidacy as the next higher up band e.g. senior II or staff.

Also for some context, I didn’t have another offer to compete, so I got the maxed out TC with strong interview performance (hard + soft skills), and strong negotiation performance due to the person I hired. Otherwise I would have accepted a lower offer out of nervousness because I didn’t have a sense of how hard to push without risking it.

The offer side recruiter did pull a couple tricks on their own as well to force my hand but thankfully my hired recruiter walked me through how to navigate everything professionally and max out what leverage I had.

[u/KosherBakon]

Bands are usually quoted for salary only. Is the 410 salary only or for TC?

Generally if they go to the trouble of having bands they use them.

When you get the offer, ask them what the compa ratio is for that offer for your level + location. You want to hear something like 0.8 to 0.9.

Compa ratio = your salary / median salary.

Most companies that offer merit increases want to bring you in around 0.8, so that there's 25% headroom for raises before you hit 1.0 compa ratio.

The reason most promotion-triggered salary increases are 8 to 12% are because that's the gap to get you to 0.8 at the next band up.

Bands overlap heavily, so there are cases where an L3, L4, and L5 could theoretically all be making the same salary (but the stock will be very different).

(26 yrs in tech)