The Cardinal Rule in Salary Discussions

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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.

On the other hand, when the company is the first party to mention salary, you face none of these risks. In addition, the figure will be the lowest salary that will be offered and negotiating will be upward from this amount.

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 bonus or profit sharing, and 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.

There are guidelines to follow for determining this range. Most importantly, it must be realistic and in accordance with the general pay scale for the position. If you're changing careers or are planning to move to a new industry where salaries differ, you might not know what a reasonable range would be. To find out, ask people who work in the industry or speak with the appropriate executive search firms, employment agencies, or professional and trade associations. In addition. National Business Employment Weekly continuously publishes salary surveys on the various job functions in a host of different industries and fields. You can call or write this publication for the back issue that pertains to your specialty.

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 they 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."
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