Salary Range Negotiation

[Spanky]

Most articles say that you should always negotiate for the high end of the salary range.

What is the drawback of accepting an offer at the high end of the salary range? One of the the problem is that it will be hard to get a raise unless you can get a promotion. Can you think of others?

P.S. It's very hard for the employer to change the grade level for the position unless it is reposted. They are very reluctant to repose the position because of the amount of paperwork and time involved.

 

[MasterBlaster]

Who cares about small future raises, getting paid at the high end of the scale is a good problem to have !

The only issue that I can see is when downsizing occurs sometime in the distant future. If your head is sticking out the furthest then you just may get it chopped off.

 

[FinanceDude]

Who cares about small future raises, getting paid at the high end of the scale is a good problem to have !

The only issue that I can see is when downsizing occurs sometime in the distant future. If your head is sticking out the furthest then you just may get it chopped off.

Well, there is that expectation...........however, IMO, it has been the folks at the lower end of the pay spectrum that are let go first..........

 

[Spanky]

Well, there is that expectation...........however, IMO, it has been the folks at the lower end of the pay spectrum that are let go first..........

The correlation may not exist. It has to do with how you are valued in relation to others and how well you have managed upwards.

 

[mickeyd]

it will be hard to get a raise unless you can get a promotion

This is a good thing as far as I'm concerned.

When I was slaving away at salary jobs I always tried to get hired as close to the top as possible. The hiring manager always understood that I did not plan on staying at that job grade too long and I was looking to prove that I had much more potential than the job I was being hired for. This strategy worked fairly well as I never had a job where I was not promoted into a higher position.

 

[soupcxan]

How do you handle prospective employers that are pushy about wanting to know your current salary? I try to put them off or change the subject but they are aggressive...and it seems to be a common theme, they bring it up early in the conversation, way before an offer is on the table. I understand that they don't want to waste time if I have unrealistic salary expectations, but it seems premature. Example:

HR: So what's your current compensation?
Me: It's near the market rate for someone with my level of experience (2 years).
HR: So what would your expected compensation be?
Me: It would depend on the role and the responsibilities of the particular position. I'm really more interested in finding the right employer and right job rather than purely considering compensation.
HR: Well, most people I've interviewed from your particular employer have been in the range of $X-$Y (which is $10k lower than where I'm at). Is that accurate?
Me: No, that's not. I'm really at $Z. (I finally caved in).

How do I keep this from happening? I feel like it's rude to flatly tell them "I'd rather not discuss compensation at this point" but maybe that's what I need to be doing? I don't want to look uncooperative, particularly since these interviews are in multiple rounds and I don't want to get dinged early on.

 

[Martha]

Tough one soup. When I used to interview people I had two reasons to ask about their current salary. One was to find out what salaries were marketplace. Another was to make sure they didn't have unreasonable expectations. It didn't effect the amount I would offer for the job.

I assume your current employer doesn't have an agreement with you that prohibits you from revealing the amount of your compensation. . .

 

[Craig]

soup, you hit it right. Spanky ... sounds like you're either in a government or mega-corp situation.

IMHO, one should always negotiate for the highest comp possible ... you won't often have a better opportunity after they hire you.

The first one to name a number in compensation discussions usually loses. Business owners and CEO's do not tell vendors what they're willing to pay, or what they are paying now for a current good or service ... it is considered very foolish.

Same with comp. But your ability to hold out will depend upon your situation. [Another good reason for FI] If you're desperate for that job, then you may need to cave in before they do ... but if you do, try to at least make the number as high as reasonably possible ... include everything in your number. Salary, bonus, any 401k match, etc.

This is something employers do because we can get away with it, and it reduces our costs. And, managing our costs ... especially the very large cost of compensation ... is an important part of managing a business.

As much as possible, I think candidates are best off to keep their current comp close to their vest, and to seek more variable compensation plans. I much prefer a low salary, but a large bonus potential based upon output and performance. Some jobs lend themselves to this, many don't. When they keep asking about current compensation, just say you consider that confidential, and you are only seeking market comp for the job at hand, and recognition for your actual performance on the job.

A big problem when we're hired below market is that it is so tough to recover. If going comp is $75K, but we're hired in at $50K because our former employer was a tightwad ... then we need a 50% raise just to get back to market. Pretty tough to accomplish. Frankly, I've see people lie about their comp in such a situation, with success. Not suggesting anyone lie, but ... sometimes fire must be fought with fire ...

Best of luck.

 

[Spanky]

When they keep asking about current compensation, just say you consider that confidential, and you are only seeking market comp for the job at hand, and recognition for your actual performance on the job.

Charles,

That's a good response. I was not able to do that and gave out my current salary. When being asked about expectations, I told them that I would expect something similar to what I was making. I did ask for the range. They said that range was within my expectation even though I did not explicitly specify a number. I think they simply offer 5% above your current salary.

Spanky

 

[Craig]

That 5% bump is what most folks do, at best. Frankly, I've seen a case recently where one CEO candidate was selected over another, partly because the CEO not selected was so sophisticated that he drove a hard bargain, and the investors decided to take the cheaper, more ignorant guy. Not wise, IMHO, but that was their choice. Unfortunately, many employers get too cheap on comp, being more concerned about what they are paying, instead of being concerned about what they are getting.

Your goal (assuming you've done a great job of determining that employer is the best place for you) is to get your foot in the door at the very best comp possible. It is a dance. I've seen people go in too cheap, and that usually does not end well for either party. But don't worry about getting hired at too high a comp ... that is not an issue.

As a matter of fact, consider this ... when you are able to significantly increase your comp and / or title at one job, it helps leapfrog you at the next job ... you get the benefit of the myopic "let's pay her / him 5% more than they're making now ..." by having them start at a higher number.

Best of luck.

 

[bow-tie]

I look at it this way... if they have the audacity to ask my salary, I have the audacity to make up a number to give to them.

 

[Spanky]

I look at it this way... if they have the audacity to ask my salary, I have the audacity to make up a number to give to them.

That's probably what a lots of people do as expected by HR asking the question. That's part of reason that they only offer an increase of 5% or less.

 

[Brat]

Don't cross the street for only a 5% bump.

 

[Sisyphus]

As someone on the other side of the table (trying to fill a few positions right now), I can tell you that I appreciate some honest insight on salary. I have virtually no salary range to play with... I essentially have "X" to offer to someone who's qualified. If both the candidate and I are honest about our expectations, it really helps. If you expect $10,000 more than I can afford, there is no need to continue the interview process. Hiding your expectations doesn't help anyone. Not saying you may not be worth that amount, but if I don't have the budget for it, why try to keep the salary discussion off the table?

When someone asks your current salary, they are usually trying to find out what it will cost to get you in the door. If you already know what it will take, give that number (or a range that includes it). For me, it doesn't matter if you're making $50k per year if it'll take $75k to get you to take the job. .. I don't have the budget and just matching your current salary won't satisfy your needs! Make sense?

The advice I've given family is to answer with a range of what you expect after explaining that benefits, culture, opportunity, etc. also come into play and salary is just one aspect of it. If they push you for your exact current salary either make something up or explain that your current employer won't allow you to disclose it. (And decide for yourself why they're really asking if you already told them what it'll take to get you in the door.)

Hope this helps.

 

[lets-retire]

Having only worked in the private sector when I was a teen all I can rely on is what the DW tells me. She said when asked the question about salary she takes the perfect work year and figures what her pay would be. A lot of her compensation is in bonuses so she figures out what her maximum workload is, without taking time off, and figures her pay based on that.

 

[youbet]

As someone on the other side of the table (trying to fill a few positions right now), I can tell you that I appreciate some honest insight on salary.

Agreed! During the late 80's and the 90's, I did a lot of interviewing and hiring of professional and management people for the tech Megacorp I was working for, both fresh-outs and experienced. I was more likely to act favorably regarding a candidate who was willing to discuss current compensation and expectations early on. It wasn't a stopper. But, if we had a dozen or so candidates for a position and we were trimming the list down to three or four final candidates, a borderline candidate where we had little understanding of his/her salary history and expectations was likely to be cut.

 

[Brat]

The employer will eventually learn your current base comp so the candidate can say my current pay is $X but I also receive incentive/bonuses as well as fringe benefits. If I meet your needs I expect compensation in line with the responsibilities and demands of the position. Do you have any concerns?

 

[Arc]

Get it while you can!

 

[dunc0029]

It's funny - I am actually trying to get back to a megacorp I left just months ago, thanks to my current employer leaving much to be desired. Ironically, this will be my best chance to actually get a decent raise.

My point is - usually at megacorps, you're stuck with peanuts for raises. I've always been a top performer and never seen a correlated raise, except for my very first year with a pretty cool manager. Otherwise, my only decent raises have been taking new jobs. So, lock in that salary while you can and don't worry about a lesser opportunity for future raises. You'll more than make up for it with that extra money in your pocket, earning interest!

 

[Spanky]

It's funny - I am actually trying to get back to a megacorp I left just months ago, thanks to my current employer leaving much to be desired. Ironically, this will be my best chance to actually get a decent raise.

Good luck - there are a lots of jobs in the twin cities. Which mega-corps are you thinking about?