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Tuesday, February 26, 2008

When it comes to salary, he who says the first number loses!


When applying for work, I recommend trying to avoid sending your salary history whenever possible. If the job posting says it’s required, you might eventually have to produce it, but it is never to your advantage to do so. Typically, a company has budgeted a certain salary range for a position and will do their best to stay within it. The budget for the position has likely been a source of discussion for several months by the time the company is ready to start interviewing. The manager likely petitioned for the position with the VP who sat in on budget meetings with the CFO and pitched salary numbers and job duties.

Disclosing your salary history could cost you thousands. For example, if the budgeted salary range for the job is $100-120k/yr, and your salary history indicates that you'd likely accept $90k/yr, you've just "lost" $10k due to disclosure. If you hadn't disclosed, they'd probably have offered you something in their budgeted range.

On the other hand, if your salary history indicates that you made $130k/yr on your last job, they may think you are either 1. Too expensive, or 2. Will leave soon after taking the "cut" in pay for the next opportunity to make more money. Had they not known your salary history and offered you something in their range, you may have been thrilled with the offer for a variety of reasons other than dollars, including commute, love of the company, job duties more in line with your interests, etc.

This is a dance that I see becoming less popular as time goes on. Employers are becoming more transparent about salary range, often posting it on the ad or disclosing it when people ask, and candidates are able to decide for themselves if the offer has value. Aim for companies with solid bottom lines and the number you start with can easily rise in a short time when they've fallen in love with you.

Do what you think is best. My suggestion is that if you are applying for public or private industry jobs, omit the salary history even if asked. Follow up in a week to inquire if they received your resume (attaching your resume/letter again) and ask if they need any additional info. If they ask for it again, send it. If they don't, don't. Adding a vague line to your initial email such as, "Salary expectations commensurate with job duties and experience," should suffice when salary history is listed as "required" in the ad. For government jobs, I'd cough up the info right off the bat. They'll likely have a published range anyway.

On job applications, where it asks for salary, some applicants write “negotiable” or “flexible”. In my experience, this has NEVER kept a great candidate from moving forward in the hiring process. You’re already there and they’ve had a chance to meet you. If you’ve indicated flexibility about salary, chances are they are onto more important considerations such as goodness of fit.

If you are asked about salary requirements in the screening or interview process, I recommend politely asking what the budgeted salary range is, look calmly expectant and wait for their reply. Then state that you are inside that range (assuming you are) and you’re sure something can be worked out that works for everyone. Smoothly change the subject as soon as possible to talk about aspects of the job itself. When they decide they can’t live without you, you can decide whether their offer is good and how it compares with others that you’ve received. Does it drive HR up the wall when you do this? Absolutely, it's their job to find this information out; but they are not usually the final decision makers. You don’t want to irk them, but a pleasant, “I’m sure we can work something out as the process continues”, should take you far in most situations. A good recruiter will push back. Accept this and remain pleasantly vague. Change the subject gracefully.

Benefits like vacation or level of health coverage are very difficult for most companies to negotiate. If they have a top performer in a similar role and they offer you more vacation, they’ll have a very dicey situation on their hands. It can be much easier to negotiate a one-time signing or performance-based bonus.

When you have become an expert in your industry and have skills they can’t get from the next ten people that apply for the job, your negotiations take on a completely different flavor and you can often get away with boldly leveraging one offer for another. Even so, that tactic is never really appreciated, leaves a bad taste in the mouths of the decision makers, and can backfire if you’ve miscalculated.

While your ability to navigate this landmine diplomatically will be closely watched, you really do have the employer over a barrel on this point. They have to put a number on your offer letter.

1 comment:

Working Girl said...

Fascinating post, Jill. The salary negotiation issue is often traumatic for job seekers.

One thing that always worked for me was to decide in advance (using research and much soul-searching) how much I wanted to make. Then I added some to that figure (when I was free-lancing I actually tripled the number but that's another story entirely) and asked for that.

Sometimes they said, "That's a lot." I would just say, "Okay, make me a counter offer." No one ever got offended.