By J.T. O’Donnell – CNBC MakeIt
In my 15-plus years of working as a recruiter and career coach, I’ve seen hundreds of job seekers give answers that made them sound indecisive and uncertain about pay expectations, thus lowering an employer’s confidence to hire them.
Don’t assume the hiring manager will just throw out a number, and that you can just negotiate from there. Always do your research and prepare a script.
When a hiring manager asks about salary expectations, your answer should reflect your “ideal salary” and your “walk away rate.”
Beth, for example, is interviewing for an auditor position at a well-known firm in Boston, Massachusetts. First, she’ll want to research her market rate using reliable websites (e.g., LinkedIn, Glassdoor.com, Salary.com).
She’s also reaching out to recruiters, former colleagues, friends, and mentors for market intelligence. Without it, she won’t know how she’s priced — above market, below market, or fair value. All that homework will go a long way in giving Beth an edge in every conversation about money.
Based on her research and conversations, Beth finds that the average salary range for auditors in Boston is between $62,000 and $75,000. This helps her determine whether her asking range is reasonable.
Now Beth needs to consider her current situation and figure out the minimum amount of monthly income she needs to pay her bills and live comfortably.
She combs through every little detail: How much do I have left in student loans? When will they be paid off? Are there people who depend on me financially? Would I have to relocate to Boston? If so, what’s the cost of living? Where do I see myself in the next few years? Will I still be renting?
Beth has a decent amount of years in auditing experience and several credentials, including an MBA. Her current salary is $65,000 at a mid-sized company. This is enough for Beth to live comfortably for the rest of the year, but she’d like to start saving up to buy a home, so she adds $5,000 — making her “walk away rate” anything lower than $70,000.
From here, Beth must determine her salary worth by factoring in the job requirements, her professional experience, accomplishments, and the additional value she plans to bring to the company.
Keep in mind that the average salary increase employees receive when changing jobs is between 10% to 20%. Of course, it can be much less — or more — depending on a person’s circumstances and industry.
Since the job she’s interviewing for is more senior and comes with additional responsibilities, Beth wants at least a 15% increase, which totals $74,750.
Beth decides that her ideal range is between $75,000 to $85,000. (She aims toward the high end, which is smart because she knows the employer might try to offer the lowest amount possible.)
With the information she’s gathered, Beth can now prepare an answer that will show how confident she is about her worth and what she has to offer:
“I’m looking to make between $75,000 to $85,000. This seems like a fair range because I’ve worked with large clients like [X] and [Y], so I’ll have no issue transitioning to your client base.
My large network of connections is also of particular value, and I can leverage it to bring in new clients for the firm.
Beyond client work, this job would require me to be deeply involved with training junior associates. While I have leadership experience and enjoy managing people, this will bring on additional responsibilities, especially if I implement some of the improvements we previously discussed.
Given all these factors and my experience, I believe that $75,000 to $85,000 — which is close to the market rate — is a fair ask. Is this something we can make work?”
Beth’s script is solid for three main reasons:
- She gave a salary range, which says she’s open to negotiating.
- She backed up her numbers by making a case for how she’ll not only meet the job requirements but also add additional value to the company.
- At the end of her answer, she asked whether her range is within the company’s budget, which will give her an idea of where the conversation is headed (even if the answer she gets is a simple: “We’ll get back to you.”)
If the offer is below your ideal salary or hits your walk-away rate, there are other things you can negotiate to make the position worthwhile, such as:
- Flexible work hours
- Additional vacation time
- Tuition or professional development reimbursement
- Signing bonuses
- Higher commission rates and bonuses
- Equity and profit-sharing agreements
Lastly, don’t be afraid to say no! If you sell yourself too short, you might end up unhappy, struggling to pay your bills, and possibly looking for another job a few months into your new one.