Unfortunately, many people don't know how to handle this salary issue, and they accept lower offers than they need to. When it comes to salary, there's also a conflict of interest between company and potential employee. A company is in business to make a profit and therefore wants to minimize expenses. Since salary is an expense, the company tries to keep its offers as low as possible. A job-seeker, on the other hand, is looking to make the most money he can and wants the highest attainable salary. Thus a difference of opinion can arise concerning an equitable figure, and negotiating begins.
Getting a company to increase its offer is easier than most job-seekers realize. The salary that's initially proposed is frequently designed to "test the water." Although it's an amount of money that the company believes will be accepted, it isn't the greatest possible sum. The company will agree to a higher figure if given good reasons to support it. As positions increase in seniority, organizations become much more willing to negotiate. Discussed in this article are techniques to use to get a higher salary, as well as potential mistakes you should be careful to avoid making.
The Cardinal Rule in Salary Discussions
When discussing salary, there's an approach to take that virtually guarantees successful results: get the company to disclose what it wants to pay before you divulge the amount you're seeking. By adhering to this rule, you'll receive a higher initial offer and be able to negotiate a further increase from this level.
When you reveal your salary objective prematurely, you jeopardize your negotiating position. Here's why:
- Whatever salary you ask for will usually become the maximum the company will offer. Not only will you be setting a ceiling on the amount, but the company will probably suggest a lower figure, knowing it can go to this level if necessary.
- If the amount you request is significantly below what the company was planning to pay, your self-confidence and ability could be questioned and the company could develop second thoughts about your qualifications. It might even eliminate you as a candidate.
- If the figure is too far above what the company had in mind, it could assume you would be dissatisfied with its offer or reject it outright. Again, you could be disqualified.
In the course of interviewing with a company, you'll usually be asked what salary you want. It's easy to defer this discussion. When asked during the first interview, an appropriate reply is: "I don't have a set figure in mind. I also don't know enough about the position yet." When asked after you've had more than one meeting, your response can be: "I'm extremely interested in the position but am still open on salary. It would depend on the benefits package, the opportunity for bonuses or profit sharing, as well as offers I'll be receiving from other companies." Most interviewers will accept these replies.
If you're interviewing for a position that would necessitate relocation, it's acceptable to add that you would have to assess the cost-of-living differential.
At a certain point, though, especially when a company has decided you're the candidate to hire, an interviewer will try to pin you down on your financial requirements. He might say, for example: "Jack, we're all very impressed with you and would like to have you on board. What'll it take?"
This is the most tempting time to disclose the desired salary some job-seekers also interpret this question to mean that they can write their own ticket. This is seldom the case; the interviewer is only feeling them out.
Because of the potential problems of revealing the salary objective, never give an interviewer a specific figure. Instead, state a range.
Once you've decided on your range, be sure that the spread between the high and low points doesn't exceed 10%. For example, you could be seeking between $20,000 and $22,000, between $50,000 and $55,000, or between $200,000 and $220,000. Set the low point at 5% below the salary (or upper figure in the range) that the company told you it wants to pay. For example, if the company stated $60,000 (or between $55,000 and $60,000), give a range of $57,000 to $63,000.
You must also carefully evaluate five factors, since them always influence an offer: (1) how pressing it is for the company to fill the position; (2) how enthusiastic the manager is about hiring you; (3) how competent you are in your line of work; (4) whether the company has a reputation for being a high- or low-paying organization; and (5) your current or previous salary.
In addition, geography can play a role. If you're currently working in an area where living expenses and salaries are high but are interviewing for a position where the cost of living and salaries are low, you can't expect to receive a large increase, if any at all. When companies decide on compensation, they always take this cost-of-living factor into consideration.
Finally, when giving your range, tell an interviewer about any bonus, profit sharing, or special fringe benefits you currently enjoy or a raise you're due with your current employer. Also mention offers you've already been made or are expecting to receive from other firms. These too influence compensation decisions.
Some interviewers won't be satisfied with being given a range and will press you for a specific figure. Unless you have reason to believe that continuing to withhold this information would be disadvantageous, don't yield. You've been told the company wants to hire you. It's now the interviewer's responsibility to name salary, not yours. Roles have changed. The company is now "the seller" and you are "the buyer."
Regarding Your Current or Last Salary
What to say to interviewers when they ask about your current or last salary is one of the trickiest parts of salary discussions.
If your income is low, some employers will view this favorably because it won't cost them a lot of money to hire you. Others, however, will question your abilities.
If your earnings are high, this could preclude your being made the offer. Yet some employers might see this as validation of your capability and expertise and become that much more interested in hiring you.
Clearly, there are good reasons to tell an employer what you've been earning, as well as to withhold this information.
When deciding how to handle this matter, there's also another factor to consider: some employers will be angered by your refusal to discuss your earnings level, while others will understand that you want an offer to be based on your value to the company and not on what some other organization has been paying you.
The best approach to take is to weigh all these variables and handle questions concerning your current or last salary on an individual basis. Depending on the circumstances, you might reveal your income level to one employer but not to another.
Giving Notice to Your Present Employer
Once you've accepted an offer, give your manager reasonable notice that you'll be leaving the company. Two weeks is usually an appropriate amount of time, except for senior- and executive-level positions.
Never advise the manager in a way that could cause resentment or bitterness, regardless of how difficult it was working for him. You might need his reference at some point in the future. The two of you might also end up at the same company.
In addition, you want the opportunity to be made a counteroffer. Because companies don't like to lose valuable employees, they frequently promote people, transfer them to a different department or division, create a new position for them, or match another company's offer when given resignations. Although these "forced reassignments" and salary increases don't always prove advantageous in the long run, you still want the option of being able to consider such a proposal.
Some job-seekers use this situation as leverage to negotiate a higher offer from another company they give notice before accepting the offer, with the expectation of generating a counteroffer from their current employer. Then they inform the other company of their new salary in hopes of obtaining yet another increase.
After you've arranged a starting date with your new employer, thank all the people who helped you in your search and advise them of your new position. Either call them on the phone or write them brief notes.
