Never Give a Number: The Keys to Salary Negotiation
Following what you think was a great interview, you are about to leave the office when the HR manager stops you and invites you into her office.
“You did very well today,” she says. “The staff is impressed with your work experience, and we believe you would be a great cultural fit.”
You exhale, knowing for certain now that you killed it. You thank the HR manager for her compliment.
“We would like to make you an offer,” she continues. “What are your salary expectations?”
Panic immediately sets in: What do I say? If I give them too high a number, will they think I am unreasonable and not make the offer? If I give them too low a number, am I cheating myself? What do I do?
This is not an uncommon situation for someone to face during a job hunt, and the best way to approach it is to know ahead of time what a reasonable offer would be fore someone with your skill set in this role.
In other words: Do your research before heading to the interview. Know the industry, know your strengths, and know what you have to offer a company. Look up salary ranges for the type of position for which you are interviewing. LinkedIn and Glassdoor are two very good resources for this. Once you have the facts, decide what you would accept as a minimum base salary for this position.
But What Should You Say?
It is always better not to give a number when you are asked about your salary expectations. An appropriate response could be, “Thank you very much! I am really excited about this opportunity and honored that you are making an offer. I know I can do this job and would be a strong contributor to your company. I would expect that, given my background and experience, you would make an offer that is market competitive. I would also need to understand your entire compensation package to know what a fair offer would look like.”
Experienced HR executives have been through this before and may respond by saying, “Our benefits package is extremely competitive in this industry. We offer healthcare coverage, a performance bonus, merit increases, and a 401(k) match. But we would like to know what we would need to put on the table to get you here.”
Now, you have a choice depending on how comfortable or uncomfortable the conversation may be getting. If you detect that you still have some leverage, you can respond by asking them to put together a complete offer with salary and benefits included for you to review. If you feel that the HR executive is pressing you for a number, then you may have to provide one. However, you should not give a single figure. Instead, default to a range.
Let’s say you know that the salary range for this position is $50,000 to $75,000 per year. Your minimum acceptable salary is $55,000. In this case, you should provide a range that is above your minimum but within the range you know is competitive for the position — say $60,000 to $70,000. The employer’s response may go one of several ways:
1. “Wow that is pretty far above where we were expecting to pay for this position.”
In this case, if you really want this job, you can ask them what they were thinking and/or request details of the entire package so you can think it over.
2. “Okay, let us put something together for you.”
In this case, they will most likely send you a formal offer for $60,000.
In the first scenario, the employer will probably come back with a base salary lower than $60,000. Once you have reviewed the entire package, you may be able to counter by asking for an earlier performance review and merit increase, a sign-on bonus, more vacation time, or perhaps a guaranteed first year’s bonus.
In the second scenario, you will most likely be happy with the offer and should seriously consider accepting it.
There are a few other things you need to think about as well:
- If you have other opportunities pending that look promising, you should avoid responding immediately. Ask for time to consider the offer. Never accept an offer only to turn it down later when a better one comes in.
- Once you have finished negotiating, that’s it! You cannot go back and ask for more if you receive a better offer from someone else!
- Don’t shop your offer. An employer can usually tell when you are doing this, and it doesn’t look good to them. You don’t want to start off on the wrong foot with your new company.
One last thing to be aware of: Employers used to be able to ask for your salary history. Over the past few years, more and more states have made this practice illegal. Before heading into a salary negotiation, determine whether your city or state has banned salary history questions.
Compensation negotiation is common and expected during the hiring process. It is also a nerve-wracking experience. If you’re still not sure what to do, get advice from a counselor, coach, mentor, or even a trusted recruiter to help you through the process.
Jim Davis is assistant director at Pace University Career Services.