Salary Negotiation - Know Your Market Value When Accepting a Position
There are few things worse than starting a job only to learn that your peers are making $10,000 to $15,000 more than you are. What happened? Assuming your education and professional experience are equal to your peers, then we have to backup to the interview phase. During the interview, did you adequately convey your value to the company? Did you convey your expertise and help the hiring team see how you were going to make a significant difference? If not, then maybe you are being offered a lower salary while the jury is still out on your performance. Many companies anticipate you will negotiate their offer and start with a salary at the low end of the salary range. Some companies think they are extending a fair offer without verifying current market rates. The bottom line is that once you accept a position for less than market, it is an uphill battle to get back on track.
The resume and the interview is where you should begin laying the groundwork for your value. These are two venues to highlight your expertise and how your accomplishments have pushed the company forward. As an example, your $200,000 quarterly sales of peanut better netted the company $165,000 annually and helped propel your region from #6 in the marketplace to #3. Crystal clear, quantifiable career stories provide concrete example of expected future behaviors.
Doing a good job highlighting your value in the resume and in the job interview is critical. You should also have first hand knowledge of your market value. Many job seekers rely only on their personal salary history. However, your past salary may not be reliable because:
Before you go into an interview you will want to carefully review the job description, both to help frame the interview and to understand the market value for the position. One helpful website to verify if your salary expectations are in line is http://www.Salary.com
A recent key word search for "Business Analyst" in zip code 75201 (Dallas, Texas) pulled up 25 varieties of business analysts on the first page. Narrowing the search to "Financial Analyst" provided four grades. A quick review of each job description provided a desired match at level III. The salary ranges are shown in a bell-curve format. The bell-curve diagram divides the base salary range into quadrants, from low to high. At the 25% mark the base salary for Financial Analyst III is $63,400 and at the 75% mark the salary is $78,600, with a median base salary of $71,000.
An average bonus for this position, as well as the value of expected benefits are also available for review. Additionally, you can find the most common educational levels for the position. For the Financial Analyst III position, 38% of employees have a bachelor's degree and 60% have a MBA.
Industry trade journals and professional organizations often provide updated salary information with built-in variables. Attending a local networking meeting in your field of expertise may also provide compensation insight, but be careful - don't use this as your only source, because fuzzy math can creep into the calculation.
Having solid evidence of your expected salary range can be a powerful negotiation tool. You know have relevant and useful information to:
Requesting too high a salary for the position can be a turn off for the hiring company and accepting too low an offer can put you back in the job market prematurely. Your research will go a long way to assure you are entering a win-win situation with your new employer.
Answering the Salary Question
Salary issues can easily become a tug-of-war between the potential employee and the hiring company. In order to create a more neutral environment, I recommend removing the "I" and "My" from your responses to salary questions. Instead of using the word "salary," I encourage the use of the term "value." Now, instead of talking in terms of "salary," you can answer the Salary Question in terms of "value."
As an example, say that Margaret is interviewing Mary:
Margaret asks: "Mary, as you think about your next career move, what are your salary requirements?"
Mary responds: Currently, Royal Financial Partners values the Financial Specialist position with a base of $80,000 and provides an annual performance bonus," or "Salary research indicates a tenured CPA with similar experience is valued at a base between $85,000 and $95,000."
Re-framing the Salary Question in terms of Value reduces the tension associated with answering the Salary Question. At no point in her answer did Mary use the words "I, Me, My," or "Salary." The conversation is not about Mary (the skilled candidate) and Margaret (the hiring manager), but about the value companies place on certain competencies and Mary's perceived value in the marketplace. Notice how Mary uses research, not her past salary to drive the offer.
After answering the Salary Question, it is then Mary's obligation to ask Margaret not about salary, but about value. Mary asks, "Margaret, would you please share how the company values this position?"
Margaret may reveal the Financial Specialist position is in line with Mary's salary research, and has a base of between $83,000 and $93,000, a spread of $10,000. Mary will be proactive and ask, "Margaret, would it be correct to assume then, that the midpoint for the position is $88,000?" Margaret nodes in agreement.
Mary now knows that $88,000 is the midpoint, the minimum salary she should accept. By providing a straightforward answer and asking follow-up questions, Mary has done double duty Ð she has provided Margaret relevant compensation information and has set minimum expectations for the job offer.
Often, job seekers do a great job during the interview process, but quickly sink when it comes to salary-related questions. The goal is not to allow the salary questions become a tug of war. A defensive approach will compromise the rapport you have built in the interview. The Salary Question should be an equal exchange of information, based on your research.
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