Every job is an exchange. You are getting paid for your time, skills, and experience. Most people are nervous about the last question in the hiring process because it can feel like the most risky. The last question was, "What are your salary expectations?" Today, I'll give you some tips on how to talk about this tough subject.

I hope you feel good about yourself after the salary talks. I'll talk about why it's important to negotiate for the best deal, what you shouldn't do, and give examples from real life.

First, let's put ourselves in the shoes of the manager and think about salary negotiations from the point of view of the company:

Salary negotiations from the employer's point of view:


Everyone has to spend time on the hiring process. Most employers will ask about salary expectations early on, sometimes even on the first phone call. This is because no one wants to waste time if there is a huge difference between what the job pays and what you, as a potential new employee, want to be paid.

Not only do employers want to save time for everyone, but they also want to know how you stack up against other candidates. The number of years you've worked or your job title don't always show how skilled you are, so salary is sometimes a better way to judge rank. (Pro tip: Not only are they interested in your salary as a candidate, but if the company is small or a start-up, they might not know how much to pay for a new position. Some companies use salary screening to do their own market research on pay scales in a certain field or role. This doesn't happen often, but it does happen.)

When a company has been around for a while, it's more likely that they've hired people for similar jobs before and have a set range of pay for a job opening. Most of the time, there is a set way to hire people that started long before you hit the "apply" button. Job requirements have been written down, the structure of the organisation has been talked about, and a budget has been made, which usually involves more than one department. It's a myth that bosses have complete control over how much they pay their employees. A manager has to think about the other people who work for them and may need to set the pay of the team so that it is fair. They might have some wiggle room, but hiring managers don't have as much negotiating power as you might think, especially in uncertain economies.

Another myth is that all employers want to pay the least amount possible and will choose the "cheapest" candidate who can do the job well. Often, this is not the case! Hiring managers are looking for people who will work well together for a long time. Because hiring and training a new employee takes so much time, most leaders will choose a candidate based on their contribution and value to the organisation, not on how much money they asked for. Companies are just like the rest of us in that they get what they pay for.

Now that we know why interviewers ask this question, let's talk about some things that you should never do in a negotiation:

Rule #1: Don't be the first to say a certain amount of money


In the past, recruiters were taught to first ask candidates about how much money they were hoping to make. Recent changes to the law have limited how far interviewers can go when they ask this question, but most employers will still ask you to give them a number first. In an interview, you want to be helpful, but it's best if you can answer with a general answer rather than a number.

For example, if, during the first phone call, the interviewer asks, "What salary are you looking for?" You can say something like, "I'm flexible, and joining a new company is about more than just the salary for me."

Then you ask them, "How much have you planned to spend on the role?"

A common way for an employer to try to find out this answer is to ask what salary range you would like. This doesn't make sense! If you are thinking quietly about $50,000 and say $50-60,000, would you really turn down $65,000?! Of course not.

But as a job candidate, you can ask, "What is the salary range for this job?" Or, "What do people who already work in this position make?"

This brings us right to the second rule you'll want to avoid when negotiating a salary, which is almost the opposite of the first.

Rule #2: Don't bring up the issue in the last step.


Even though you don't want to be the first person to say a number, it's in everyone's best interest to talk about the salary before the final offer. Not only is it more efficient, but it also avoids a "cost of anticipation." You don't want to spend weeks interviewing for a job and getting excited about it before you know for sure that the opportunity is as good as you hope. (Tip: the same goes for the people in charge of hiring! They are just as likely to be happy about a great new teammate as you are about a new job!)

Sometimes pay isn't talked about until the very end, when you get an official offer letter. This can happen if the hiring process is broken, if the employer assumes that you will accept any salary, or if there are other problems that you don't know about as a candidate. When things are like this, you have to take charge and be honest.

If you've already had a phone interview and are moving on to the next round of interviews, it's fine to talk about money.

You can say, "I'm really excited about this chance. How much will the right person get paid?" "The job description didn't say what the hourly rate was, so what is it?"

If the employer hasn't brought it up, think about who you should bring it up with. You can politely ask about salary if you are interviewing with someone from human resources, recruitment, or the boss herself.

Don't ask this question to a potential coworker at the same "level" as you or, even worse, to someone who could work for you.

Rule #3: Don't only think about money.


Everyone works for money. Even if we are really passionate about our jobs and know why we do them, every job is just a transaction (your efforts in exchange for their resources). If you weren't being paid, you are volunteering! But making bad decisions can happen if you only look at the dollar signs. Consider these tips if you want to make a good long-term career choice:

First, have an honest talk with yourself about what you think your value is and try to imagine how you will feel in the future. Ask:

  • What kind of pay would make me feel important in the long run?
  • How does this job help me grow and get where I want to go?
  • Is this job's pay fair for what I'll have to do, or will I get tired of it quickly?
  • You don't want to give a "salary range" with a top number, but you do want a "walk-away" number, which is a number below which the job offer isn't worth your time.

If you know that your skills, experience, or education make you worth more than $60,000, you wouldn't take a job that only paid minimum wage.

Check out the full list of benefits that is in your offer letter. Benefits can make a big difference in your life, so when you're thinking about pay, you should look at the whole picture.

  • Read your contract from top to bottom. How is the coverage for health care? What about benefits when you retire? How important is PTO? For example, 2 extra weeks of time off is a full paycheck. Also, does the job have any other "perks" like a flexible schedule or a quick review cycle?
  • You can also try to get all of these things as part of your pay package. If you can't change the money offer, you can ask for more time off or a 6-month review cycle instead of the standard 1-year review cycle to show your worth. 

If you are thinking about more than one offer, try out different situations and outcomes.

  • A job that pays $2,000 less per year might not save you much money per paycheck. Do the math before letting your pride make you choose the job that pays more.
  • This is especially important if one job is harder than another because of the commute or other day-to-day logistics.

This brings us right into how to talk about salary in a way that makes everyone feel good about the deal.

One skillful approach:


When you are asked, "What salary are you looking for?" you want to show that you are enthusiastic and open to change. Especially at the beginning of the interview process, you want to keep talking to learn more about the job and show why you're the best person for it.

One answer was, "Thanks for asking!" It's still early in the conversation, and I'm not sure I fully understand the job's scope and responsibilities. What do people in similar jobs at your company make?"

Or, "This job seems like a good fit for my skills, and I think I could really add value, which is just as important to me as the pay." How much do you plan to pay them?"

Recap:


So, to quickly sum up, here are my top tips for avoiding common mistakes when answering "What are your salary expectations?":

  • Don't be the first to say how many.
  • Don't wait until the formal offer letter to find out how much the job pays.
  • Finally, don't just think about the money.

Does this make you feel better about yourself? I hope so, and I hope you can use it at your next job interview!