COMPENSATIONNegotiating the Salary Question

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QUESTIONS

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What is the best answer for the question "What kind of salary/compensation are you looking for?”

I've heard that it is important to delay the salary discussion as long as possible?  Why is that so important?  Doesn't that presume that a company doesn't have a set salary structure (which I presume most would) and that there is a lot of room for negotiation? 

If asked for a specific salary (a number) is it better to give a high or low number?

What do I put on the application form for my last salary to avoid or delay the salary discussion?

What is the best way to make it clear that I'm not motivated by money but enjoy the work I would do?

What do I say when they ask for my salary history or my salary requirements and won’t move on to the next step without it?

If I keep putting them off won't this hurt the relationship or they might see me as hard to work with and I could lose the job over an issue that may not be an issue?

THE QUESTION Comes in many forms:

“What's your salary range?” “What salary do you expect?” “What are you expecting to make in terms of salary?” “What did you make at your last job?”

Negotiation starts when one of these questions is asked, typically in one of the three phases of the search process

Your GoalDefer The Discussion Until The Offer

Stage

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WHY HANDLING THE QUESTION IS IMPORTANT We all want to be honest and forthcoming in

an interview. However, when The Question comes up, avoid citing a number. If you reveal your salary expectations too early, you lose two big opportunities:

The opportunity to make them love you before they know your price.

The opportunity to demonstrate your ability to handle an uncomfortable situation confidently and respectfully, without caving (a prized skill in most jobs). 5

www.pongoresume.com

1. PREPARE YOURSELF FOR “THE QUESTION” Given your experience and skills, what does

the job typically pay? Do your research

www.salary.com www.jobstar.org www.careerbuilder.com www.cbsalary.com www.monster.com www.indeed.com www.jobsearch.about.com www.linkedin.com Company’s reputation – what is the company’s

pay philosophy? 6

2. CONSIDER YOUR POSITION

External Environment General economic

conditions State of target industry Unemployment trends Demand for skills

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Company Profitability Business cycle (Start Up,

Growth, Mature, Decline) Unionized Size Budget Urgency to fill Type of Job: Entry level?

High Turnover?

You KSA’s: Your knowledge,

skills and abilities Your resources (savings,

network) Competition – skills of

other candidates Career implications of job

offer Your willingness to

relocate Whether you are currently

employed

Factors which impact your negotiating power...

Job Offer! A How-to Negotiation Guide, author Maryanne L. Wegerbauer

3. ESTABLISH YOUR NUMBERSThrough research and personal needs,

establish:

1. Your “walk-away” point You cannot accept an offer below this point

2. Your expected offer Based on your research, the offer you expect

3. Your desired offer The number you will work towards in negotiation

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4. COMPLETING THE APPLICATION Why do they ask for past or expected salary in the

application? Screening applicants Establishes an anchor for negotiation

What should I do? Ignore it and leave it blank, unless:

They refuse to move forward without it An electronic application that requires entry (try zero’s)

The same guidelines apply to cover letters If the add asks for salary requirements, try: “My salary

requirements are open. I am interested in the challenges and opportunities of this position and expect that your company pays a competitive salary.” This might be seen as evasive, but indicates you’ve read the ad.

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5. THE INTERVIEW Don’t bring up compensation and benefits in the interview. It is to

your advantage if the employer tells you the range first. Some approaches include:

Defer: “That’s something I’d prefer to discuss at a later stage.”

Redirect: “That’s an interesting question, what range do you have budgeted for the position?” or "I am sure when the time comes, we can agree on a reasonable amount. In what range do you typically pay someone with my background?”

Re-Focus: Focus on your interest in the job and your skill set. “I believe my skills and experience make me an excellent candidate for this job. I’m interested in the job and believe any offer made will be a fair one.”

Ballpark It: If forced, give a range based on your research. “My research indicates that this job for someone with my experience and skill set might expect to make $50,000 - $60,000.” Keep it soft and passive and give a number near the high end of your range. 11

ANSWERING “THE QUESTION”: EXAMPLES Focus on:

Your interest in the opportunity Your expectation to be paid in line with market

conditions and your experience level Your willingness to discuss salary history once

you and the company decide you’re the right person for the position

Shift attention away from base salary alone: There are many factors aside from base salary

that make up a compensation package Company culture Benefits Career possibilities 12

www.pongoresume.com

ANSWERING “THE QUESTION”: EXAMPLES “I was paid well in my last position. The number was in line with

market conditions and the results I delivered. I’m very interested in this opportunity, and I’ll be happy to discuss my compensation history when we determine that I'm the right person for the job.”

 “I realize you need to be sure my expectations are consistent with the salary range for this position. To ensure that we’re aligned, please tell me your range for this position.”

“I’m reluctant to focus on just one factor at this stage when so many other factors affect what makes an opportunity a great fit: the job itself, the company, the people I'd be working with, and growth potential. So far, I'm impressed with what I have learned about this opportunity and I remain very interested in learning more!”

“The actual figure will depend heavily on a number of important variables, but my experience and research tell me that fair compensation for this position falls in the range of __________.”  [Note: Name a wide salary range toward the higher end of your expectations. For example, “$45,000 to $65,000 per year” or “$14 to $19 per hour.”] 13

www.pongoresume.com

ANSWERING “THE QUESTION”: EXAMPLES What salary range are you looking for?

"Let's talk about the job requirements and expectations first, so I can get a sense of what you need." That's a soft answer to a soft way to ask the question.

What did you make at your last job?"This position is not exactly the same as my last job. So let's discuss what my responsibilities would be here and then determine a fair salary for this job." It's hard to argue with words like "fair" and "responsibilities"—you're earning respect with this one.

What are you expecting to make in terms of salary?"I am interested in finding a job that is a good fit for me. I'm sure whatever salary you're paying is consistent with the rest of the market." In other words, I respect myself and I want to think I can respect this company.

I need to know what salary you want in order to make you an offer. Can you tell me a range?"I'd appreciate it if you could make me an offer based on whatever you have budgeted for this position and we can go from there." This is a pretty direct response, so using words like "appreciate" focuses on drawing out the interviewer's better qualities instead of her tougher side.

Why don't you want to give your salary requirements?"I think you have a good idea of what this position is worth to your company, and that's important information for me to know." Enough dancing–this is one last attempt to force you to give the number first. Hold your line here and you win.

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http://blog.penelopetrunk.com/2008/02/19/the-answer-to-the-toughest-interview-question/

ACTIVITY Groups of Three or More

Role Play One person interviewer One person as interviewee One person observe 5 minutes each

Interviewer ask the question in different forms, interviewee... Defer Redirect Refocus Ballpark

Use a couple minutes for feedback in between roles 15

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6. THE OFFER The appropriate time to negotiate salary and

benefits is when you have an offer in hand

Don’t worry: Once the offer is made it is unlikely to be rescinded if you negotiate

Read the book: Getting to Yes

They have made an offer, which establishes a new BATNA (it used to be zero!!)

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HANDLING THE OFFER Employer: “We’d like to offer you the position.

What will it take to bring you on board?” You: Say something like, “Thank you! I appreciate

your confidence in me. We’ve discussed some significant challenges, and I’m looking forward to tackling them. What figure did you have in mind?”

Employer: “We’re offering $65,000.” You: Repeat the number, whether high or low,

thoughtfully and non-judgmentally. If the employer states a range*, repeat only the top number. Then stop talking and silently calculate whether the offer is in your reality, comfort, or dream range. Let the employer make the next move.

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© Susan Whitcomb 2009 – The Christian's Career Journey – in partnership with Career Transition Ministries Network & Crossroads Career® Network

*Unlikely to get a range at this point

WHEN THE OFFER IS TOO LOW Thank them and initiate a counteroffer

1. Clarify job parameters

2. Make a case for higher salary, based on VALUE, not on your needs

Re-emphasize your skills

If they reject the counter offer... Negotiate beyond base salary

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© Susan Whitcomb 2009 – The Christian's Career Journey – in partnership with Career Transition Ministries Network & Crossroads Career® Network

NEGOTIATING BEYOND BASE SALARY Sign On Bonus / Buyouts

It never hurts to ask for a sign on bonus, or, if currently employed, to buy out any expected bonus

Stock Grants; Stock Options / Units Typically reserved for mid to upper level positions

at publicly traded companies Private stock

Ownership Small companies may offer ownership

percentages in lieu of cash compensation Deferred Compensation

I’ll gladly pay you Tuesday... Time Off

An extra week of paid time off is like a 2% raise20

ACCEPTING THE OFFER Negotiation is optional!

It’s okay to just take the job

Confirm the details Base salary Annual bonus opportunity Negotiated items or items you are curious about Your title and level Decide on a start date

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SPECIAL CASES22

OVERQUALIFIED APPLICANTS Are you overqualified, but willing to take less?

You are willing to take a job you are overqualified for, and to take less pay

But, the company may be hesitant to hire you because you will be marketable when the economy turns and may leave for higher pay

Focus on your desire for a career at the company. This job is just an entry point, and you believe your skills and experience “scale” well in the organization. It’s not about the one job, but about a series of jobs and the impact you can have on the organization

Try: “I am / was making $XX. I understand that the salary range for this position is $XX - $XX. However, I'm more interested in the job itself than the money. I am open to negotiating a lower starting salary, but would hope that we can revisit the subject in a few months after I've proved myself to you.” 23

NON NEGOTIABLE INSTANCES There are instances when the opportunity of

negotiating is diminished

When the job advertisement states a specific rate “Job pays $X an hour”

Entry level and/or part time jobs in specific industries Call centers Retail Manufacturing / Assembly Restaurant

Most municipal / state / federal jobs state the salary range in the advertisement Negotiation is possible, but limited to the specified range 24

SUMMARY1. Do your research and prepare to negotiate 

Before you go into the interview, know the going rate for your experience and position.

2. Don't talk about salary too soon It is best to discuss this after they have offered you the position and before you have accepted it.

3. If asked about salary right away, change the subject Try, “I don’t want to box myself in terms of salary right now. If you don’t mind, I’d like to focus on the value I can produce for your company” 25

Q&A26