You are here: Home » Career and Education » Salary and Compensation – How to Negotiate Your Pay

Salary and Compensation – How to Negotiate Your Pay

by Ryan Guina

I have been looking into new career options recently, and I have done some recent job searching and interviewing. Thankfully, the companies haven’t yet asked me the most difficult question to answer – “What kind of salary and compensation are you looking for?”

I know what I would like to make. I also have a good idea about what I am worth and what the position is worth. But I am not positive about my assessments. If I give a number too high, then I could scare the potential employer away, and if I give a number too low, then I am selling my self short and not earning the salary I could earn.

How much am I worth as an employee?

salary compensation

Everything is negotiable!

I have not received a formal offer, but in the event I do, I will have to negotiate my salary. There are some on-line companies that can help you determine your approximate salary potential based on degree, industry, job title, and location. However, they are not always accurate. Some of the sites I have visited are salary.com, payscale.com, and vault.com. In my opinion, these sites are good resources to get a ballpark figure, but shouldn’t be judged at 100% accurate.

Using these numbers as a starting point, you also need to consider other factors. Your value is reflected by how much your prospective employer needs your skills, experience, and background, the scope and responsibility of the job, and the scarcity of your skill set within your given industry and geographic area. A computer programmer in Silicon Valley will likely earn much more than a computer programmer in Tupelo, Mississippi. Likewise, many for profit businesses pay better than non-profits, even if the job description and responsibilities are similar.

Should you divulge your current salary while negotiating?

How do you answer the question, “what is your current salary?” What a loaded question! What if you are underpaid? Should you answer truthfully, and let your new company give you a modest raise over your current salary, but still potentially leave you underpaid for the position you will field if you are hired? Should you lie about your salary and bump your salary figures $5-10k and hope to get a raise from a higher starting point? What if you know what your peers make and you aren’t in the same ballpark?

I believe you should either answer truthfully about your salary or tactfully skirt around the answer. In no circumstances do I think you should lie. The interviewing company is considering you as an employee, and this involves a level of trust which you will break if you lie. There have been many people let go shortly after being hired – all because they lied in their interview or on their application. Lying isn’t worth the risk.

How do you tactfully avoid divulging your current salary?

One of the keys to salary negotiation is not to give your number first. This puts the other side at an advantage. My plan is to state that I desire a salary commensurate with the skills and abilities I bring to the company – not based on my current salary. This is actually a standard salary negotiation tactic, but it is a good way to effectively put the ball in their court.

If the company presses the issue, you can choose to deflect the question by asking how much has been budgeted for the position, ask how much they pay others in similar roles, or just ask them what salary range they are willing to pay. You need to get the other side to determine what the position is worth to them (which they should already know), and hopefully divulge that information to you. Using this tactic is by no means lying – you are using their needs to your advantage.

How do you negotiate a higher starting salary?

Eventually, one side will have to give a number. From there, it is your goal to get the highest salary package that you will be comfortable with. Keep in mind there is more to your salary package than just the final number you negotiate for your salary. You also need to consider benefits such as 401(k) plans, pension, medical benefits, professional opportunity and growth potential, commute, nature of the work, vacation days, flex time, tuition assistance, etc.

Once you have begun exchanging numbers with the HR reps, it is up to make a case for your salary request. You will need to remind them the skills and experience you will bring to their company and reinforce their desire to have you on their team. You can also quote current market rates for similar positions. Your best bet is to be honest and be firm.

Be flexible when negotiating salary

No two negotiation situations are identical. Some companies are willing to negotiate for certain positions more than for others. In the end you have to go with what you think is best for your situation.

Back to my situation: I’ll be sure to make updates as soon as I know more about my current situation. Hopefully, I will be able to put these negotiation tactics to good use soon. If you have any other tips or comments, I would love to hear them. Right now, I am open to anything that will help me negotiate a better salary and compensation package!

Photo credit: mciarleg


Published or updated December 26, 2012.
Print or e-mail this article:
Print Friendly

{ 13 comments… read them below or add one }

1 My Dollar Plan

Please do not give out your current salary. It could determine your future salary whether or not the hiring manager intends to use it. If they know it, it will be in the back of their head. If pressed for your current salary, give a range and say something like, “I believe that a salary of XX to XX would be competitive.”

Reply

2 Mrs. Micah

Good luck, Ryan! :)

When doing freelance stuff, I negotiate very much on a case to case basis. Everything is so unique that it’s hard to say “Well it’s always this and such.” But I’ve tried to come up with approximate rates for levels of work, difficulties, and the like.

Reply

3 Ron@TheWisdomJournal

You can always say that your current salary is one of the reasons you’re looking to make a change.

I wrote a book review on Secrets of Power Negotiation by Roger Dawson. He wrote another one on Secrets of Salary Negotiation that you might take a look at. The book I read was outstandingly good and I bet the one on salaries would be as well.

Reply

4 Ryan

Thanks for the tips, everyone. My friend was recently hired at the company I interviewed with, and he told me how he negotiated. I’m not 100% sure how I will go into it, but I have a rough outline in mind. Wish me luck! :)

Reply

5 Ron@TheWisdomJournal

Please share what he did! I’d love to read about it. Don’t divulge any personal information, of course, but I’d love to pick up some tips!

Reply

6 Ryan

Ron, I have a feeling I will do some negotiating of my own in a few days – with my current company for our annual review, and possibly with another if I get offered the job I interviewed for. I will be sure to share what I learn. :)

Reply

7 Adfecto

Up to this point I have used competition to do all of my negotiating for me. When it was time to enter the job world I just took as many interviews as I could and casually dropped to the interviewers that I had a tight schedule because of other interviews. The offers came back and I took the one that best fit my life and money requirements. In all I had about 8 solid interviews and fielded 5 job offers. The offer I took had a career track built in to the program to move from intern to engineer to project manager so the salary grew as long as I maintained satisfactory performance. I know I had it pretty easy. A few years from now I’ll probably need to revisit this topic when things slow down and it is time to make a move into management, but for now things are going great.

Reply

8 Dividend growth investor

I think that salary is important but also negotiating things like health insurance, perks, stock options, educational reimbursements, and even a pension could be a nice think to have as opposed to merely being focused on salary negotiation.

Reply

9 Mark @ TheLocoMono

I will be relocating to another part of the country where the cost of living is lower therefore the rate of pay is slightly lower than where I am living now.

So it is an interesting post you bring up. I say that is because if I were to say I make 35K a year in one part of the country, another part of the country might say the same type of work is worth 28K a year, where is the “fine line” when it comes to salary negotiation?

Likewise for someone who moves from 100K area to 160K area. 60K may seem like an increase but is it really?

Reply

10 Ryan

Mark, Cost of living adjustments are always an important consideration when relocating. The end sum is not always the most important factor. For me, I hope my employer moves right down the road – leaving cost of living out of the equation for me! Good luck on your relocation!

Reply

11 Ryan

Dividend Growth Investor, I agree 100%. My current company is light on perks, so I don’t think it will get much worse for me there! ;)

Reply

12 Rudy

Interesting topic. It’s my experience that the employers ask for the current salary and offer a salary that’s based on the current salary. So it’s kind of tough world if you have been underpaid. My question is do you need to reveal if you have competing offers ? If you have 2 offers though 2 different recruiters, how much can you reveal ? The name of the firms that have offered ? The name of the other recruiter ? Would the 2 recruiter gang up against you if you do so ?

Reply

13 norby

this is helpful

Reply

Leave a Comment

Previous post:

Next post:

.