Monday, January 26, 2009

Salary Negotiation

By Trevor Davide Grant

A colleague of mine was asking me about how to approach a potential new employer about their salary expectations, and the timing of the conversation. They were worried it might set the wrong impression or give the employer a negotiating edge if they discussed the salary too soon. My rule of thumb is to never lie to any employer about your salary history or salary expectations, but to avoid the discussion until you have nearly gotten the job.

Many times I have faced the same scenario. When asked by the hiring managers what my expectations were or what my salary history is, I have used the following approach.

1) First I'd just comment that I'd prefer to discuss the topic a little later on. It is too early at this time in the recruiting process to chat about this, and we do not know enough info about each other, neither about the job, nor about my work history. Also, my previous salary is not very relevant to the job I have applied to. I would rather be remunerated according to market conditions and the companies hiring guidelines for the job.

2) If put on the spot to respond during the interview, and they insist on knowing my previous salary, I mention the total value of what I expect for salary and all compensation. That includes cash, as well as benefits and other perks. I will mention holiday time, quality of life factors, and other things like pension and health plans. I also explain that what is most important to me is that the job offer is fair within the market rather than based on what I made in the past.

3) While you may feel you are a high performer, you also may be somewhere above average but not commanding the highest pay. Know the salary range for the job you are applying to, but be realistic when setting your percentile level for your salary expectation. The majority of people are between the 25% and 75% level. Remember that the employer will confirm your performance level with your past employers at reference checking time.

4) No matter what you made at your previous jobs, your expectation should be set at the fair market value for the job in your region. You may have earned less money in the past than the current expectations, possibly even a lot less. The reasons are not relevant to the new job, and therefore you would prefer to be within the companies fair range. Aim to make it clear to the new employer that you want salary negotiations to be fair, regardless of your past salary history.

5) If you do give in and tell them your past salary, make sure you clearly express that you expect to be paid respectably, and you just don't want to be taken advantage of. Explain what you do know about the job market at that time. Most employers will respect you for expressing your expectation for your reasonable salary. Just remember salary negotiation is not supposed to be an offensive situation where you are demanding. Remember to be clear in your negotiations but respectful in your dealings with the recruiting manager.

Never lie to a prospective employer. This is cardinal rule number one. The new company will find out facts and do their legwork to assess your history and past performance. You need to clearly communicate the value you bring and that your past salary history whether high or low is not too pertinent to the new job. You need to be met with fairness in the recruiting process, and that your value proposition is clear and well expressed.

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