When looking into new career options, you begin some of the hardest tasks of your life including job searching and interviewing. Ultimately the companies that you choose to interview with will ask you one of the most difficult questions to answer – “What kind of salary and compensation are you looking for?”
We all know what we would like to make. You should also have a good idea about what you are worth and what the position is worth. But you cannot be positive about your assessments. If you give a number too high, then you could scare the potential employer away, and if you give a number too low, then you are selling yourself short and not earning the salary you could earn.
This is extremely important because your earning power is your greatest asset.
How Much Am I Worth As An Employee?
In the event you receive a formal offer from one of your interviews, you will have to negotiate your 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.
Do You Need to Reveal If You Have Competing Offers?
You do not need to reveal if you have competing offers, however, it may be in your best interest to do so if you believe the companies will bid against each other for your services.
How much information you reveal is up to you and should be determined by your situation. If you have an extremely sought after skill and you have companies in the same industry that are competing for the same work, dropping the competition’s name could work wonders in increasing your offer. If the industries are opposite, it may not do you any good to drop the name of the other company you have an offer from.
I recommend being careful using offers in your salary negotiation. While it can be a great way to get a company to increase their offer, you do not want to overplay your hand with this and seem as though you are only after money.
Stress that you are interested in the position, tell them why you are a great fit for the job, and express your salary requests and justify why you are worth that much. You probably shouldn’t go back and forth more than a couple times with the salary offer from another company. The person you are negotiating with could quickly tire of using companies against each other if you try it too many times.
Your Offer May be Based on Current Salary
It’s my experience that the employers ask for the current salary and offer a salary that’s based on the current salary. You do not always need to reveal your salary to the company you are interviewing with. If you don’t tell your prospective employer your current salary, they can’t base your new salary on your old one. There are ways around that such as requesting to be paid “commensurate with the requirements of the position and the skills and abilities you bring to the company.” Let’s look at this situation and your options.
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, or at least evens the playing field. A common strategy is to state that you desire a salary commensurate with the skills and abilities you bring to the company – not based on your current salary. This is 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.
Another way to handle this is to make the other company give their offer before stating your salary requests. Penelope Trunk, the author of Brazen Careerist, wrote about how to answer the most difficult interview question – what are your salary requests? I highly recommend reading this article if you are even considering looking for a new job.
If you are underpaid, you can mention one of the reasons you are looking for new work is because you are underpaid based on the value you provide your company, the skills you have, the duties you perform, etc. Your ability to negotiate will improve if you have recently earned a new degree, certification, or other highly sought after skill. However, be careful with the way you negotiate this, as you don’t want it to seem as though you are only after money. Your best bet is to have a very good idea of your value as an employee and be able to back it up.
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) plan and company match, 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.
Do Your Research and Go With The Best Situation For You
It will benefit you to research salary negotiation. There are many free resources on the web – such as salary.com, payscale.com, and vault.com. They can help you determine your approximate salary potential based on industry, job title, and location. However, they are not always accurate and should only be used for a ballpark figure.
In the end, if you are not satisfied with a job offer, you always have the ability to renegotiate or turn it down. But remember, there is more to a job offer than just the final dollar value. You should keep in mind the professional opportunity the position offers, the benefits package, location, vacation days, and other factors.
Good luck, I hope you are able to negotiate for the position and package you are seeking!