How to approach compensation conversations during the interview process
Partner - IT & Digital Recruiting
The candidate whose primary objective in looking for another opportunity is to find a better compensation package often sets off alarms to a hiring authority; and it should. Yet compensation in any new job is important. Money is why most work and one certainly doesn’t want to leave money on the negotiation table. The question from an employer, “What will it take to bring you on board” or “How much are you looking for” can be answered in various ways. Answering the wrong way often brings an unwelcomed and immediate end to the interviewing process.
First, set realistic expectations yourself by understanding the factors that companies consider when determining salaries. They are:
- Current compensation (base, bonus, benefits, etc.)
- Target range (typically determined by a salary survey and/or the compensation of an existing team)
- How strong of a fit the candidate is for the role (compared to job requirements)
- How the candidate measures up compared to the existing team (when applicable)
- Other offers/opportunities. Everyone thinks they are underpaid, but if someone starts getting great offers from reputable companies, that can drastically change their market value.
The main issues we see with salary negotiations from the candidate-side are the lack of understanding these factors (and their associated unrealistic expectations) and a lack of transparency. For example, candidates sometimes choose not to disclose their current salary, and then expect a pay increase that isn't in-line with the market for their skill set. And a prolonged interview process wastes everyone's time if you ultimately discover that the salary expectations were way off all along.
This is easily avoidable. The best thing a candidate can do is to not side-step the salary questions early on, and to understand and clearly communicate their real market value based on other interest they have. We advise to state your current compensation when they ask but avoid specific negotiations too early in the process. Never "throw out a number" that you’d like to make, as you’re likely to sell yourself too high (before you've had a chance to prove your worth) or too low (because it’s really difficult to raise that number later in the interview process). A great way to answer is, "I'm currently making $100k, but am more focused on a great opportunity with a great organization." If you’re above the range, you can add a caveat that you are flexible for the right opportunity. A candidate who has other offers and who answers salary questions with something like, “I'm making $100k. I'm targeting $115k and I'm interviewing with Great Company A and Great Company B for salaries in that range." has a much better chance of getting their desired amount vs the candidate who won't answer a direct salary question and doesn't have interest from any other firms.
Nowadays, companies understand that talent is their most important asset, and good companies make good offers to good people – it’s as simple as that. And companies are typically put-off by indirect answers. Usually, when a candidate gets a low-ball offer it's because the candidate is lacking several key requirements of the job. Or the company likes to make bad offers. If it is the latter, you better dig a little deeper before joining them.
Remember that in most cases, the first offer is not the only offer a company can make. There are many factors companies take into consideration, and ways to negotiate. If the employer is restricted and cannot meet your “magic number” but you want to be part of their team, take the role of the problem-solver and ask to discuss creative solutions. If the role includes things you hadn't been exposed to previously, consider asking for an early review (after 3-6 months) with a salary bump connected to proven success (however they wish to define it) with the new responsibilities.
Above all, evaluate the entire opportunity and not just salary. It may seem elementary to hear, but the message is worth repeating; there is so much more to a new career opportunity than just money.