Mike

In general my firm gives a set raise each year, so it’s likely we’ll both get the same raise, and he’ll still be paid more than I will.

In January we have our salary / yearly reviews. How do I address the difference in salary?

Also, make sure you get as many offers as possible. The more alternatives and options you have, the stronger your negotiating position.

If you’re going small-private money shop, same rules apply. But, for different reasons – private money rewards results (If I were to guess, this drives MH’s observations)

If you’re shooting somewhere in the middle… it’s all on the hiring manager – you may find a sensible person, you may find a Sadist who can compete in a big shop and can’t produce enough for a small shop.

In the end, pay is a product of what YOU bring to the table. Get that out of equilibrium and you are a RIF-Magnet (RIF = Reduction in Force. The HR way of sending you packing, and making it not worth the time or money to sue about it).

Take it from someone who’s hired multiple people, and whose been able to successfully negotiate one’s salary higher by double digits many times. NEVER go first in telling them what you want.

Actually, one of the key points here is that the candidate’s situation is irrelevant to what the employer is willing to pay. This is exactly how many candidates sell themselves short. Just because you have a weak poker hand doesn’t mean you should always fold.

The other point being made here is that when an employer asks you what your salary requirements are, especially at the first interview, that is generally not a good faith “request for a salary discussion”. It is a request for you to show your hand, with no guarantee they will not change theirs under the table before reciprocating.

As for how a bit of coyness will be taken… it obviously depends on the employer, and depends on how well you pull it off. You don’t want to appear coy – you want to appear confident in your own timeline for the discussion. No one at my company would look askance at this. When a candidate handles this question artfully it raises my opinion of them. Sure, it could be risky with some employers. But being paid less than you could have been is a risk as well.

Of course, it’s also obvious that if employers abuse that power too much, as soon as the economy gets a little better their employees will all jump ship for something better – even in this economy, I have a friend who was recruited very actively for her current job, and then lowballed on the salary. As soon as she found out what other people in her office were making, she started pushing her boss about a raise and if she doesn’t get it, they’re going to lose an employee they worked very hard to get, just for a few thousand dollars a year.

I wonder if, if people really take this down economy to heart and get and stay out of debt, if the employer/employee power balance will even out a little – one of the joys of frugality for me has always been the freedom to leave my job if I want to.

There is a fundamental flaw in the discussion:

(1) People who are unemployed and lucky enough to get a job interview are not in the position to play coy with an interviewer. It is almost laughable to advise someone who has been struggling for 6 months to get a job interview, that they should repeatedly reject an interviewer’s request for salary discussion. The negatives of this practice certainly outweigh the positives.

(2) People who are currently employed, and are being recruited by another company, should have a strong idea of what they are worth. They have the ability to play coy with the interviewer because…at the end of the day…the interviewer is trying to pull me away from my current employer. So the onus is on them to make ME an offer that I can’t refuse.

Just my thoughts…

As an interviewer and hiring decision-maker I agree with Nickel completely. Why? Because most job-seekers are not prepared to have this conversation at all, let alone to have it on someone else’s terms. I know this because I use the question myself all the time.

I ask the question with these exact words: “What are your salary requirements?” There are no quibble-words in there like “range” or “ballpark”. There’s nothing to push them to the high end like “looking for” or “want”. This questions puts most candidates on their heels. Most answer it hesitantly, but end up giving me a number that represents an acceptable, moderate salary to them, rather than an extravagant one or a big step up. If we decide they are worth more, great. There’s nothing stopping us from going higher. But this is where the hiring company prefers to start the discussion every single time.

My advice to candidates:

- If you aren’t prepared to set your salary range then and there, or your feel you would be at a disadvantage, don’t be afraid to avoid the question. Avoiding it is better than handling it badly. To create the illusion that you are fully prepared to respond, start nodding as the interviewer finishes the question. Then immediately dictate that you won’t be answering it right now, and turn it back on them for good measure: “I’ll need to consider total compensation, so let’s make sure I leave today with all the benefits information.” [scribble a note to yourself] “What do you pay your current top performers?” [poise your hand to write] Whatever they say, just write it down and nod. Then immediately move to one of the questions that you’ve prepared ahead of time – the topic doesn’t really matter, but this closes the subject for the time being.

- Realize there is no “one fair salary”. You aren’t screwing them over if you talk them up, and they aren’t screwing you over if they talk you down. The two of you are coming to an agreement – don’t agree to something you aren’t happy with, and don’t expect them to, either.

- Have other options. Nothing creates confidence in bargaining like having alternatives. You can’t always manage it, but you can certainly try hard. Whatever your other options are, even ones that don’t involve employment, make sure you have run the numbers and thoroughly considered them. You don’t want to make your decisions under any more or any less pressure than is reasonable.

- Realize that not all employers are willing or able to negotiate much. Try to go in knowing the territory. You aren’t going to talk a government employer out of more money than the job category they listed.

1. If what I can pay doesn’t meet the requirements of the candidate, it’s better to know that early, saving us both a lot of time.

2. I’m not that concerned about possibly paying the right candidate more than they were expecting. I know what I expect to benefit from this position (and at this cost to me), and with the right candidate, that’s usually likely to be far greater than any potential increment I could have saved exploiting their lower expectations. (This might not hold in a large organization.)

3. It’s really not in my interest to underpay someone. If I insisted that a person settle for a lower than market salary, based on their past salary history, I’d likely be unable to hold on to that person for very long.

4. In my experience, salaries are sometimes discussed among staff in an organization. By ensuring they are consistent (within certain roles), I don’t risk the instability (and potential sense of mistreatment) of a person discovering that they are relatively underpaid.

So my approach is to discuss salary early, to speak first, and pretty much avoid a negotiation altogether. It’s worked very well so far. But, again, if someone came into an interview, and strongly insisted on deferring the topic of salary, thereby hijacking my process, they likely wouldn’t be hired.

“Well, salary is only one consideration. I typically evaluate opportunities based on the overall package, including benefits, opportunities for advancement, etc. Thus, I really can’t provide a specific answer.”

To me — as someone who actually does hire people — this is a very defensible (and sensible) response to a potentially awkward question.

How many times must I write, “in my experience”, to make it clear I’m not making general assertions, but rather communicating my experience?

Anyway, if you attempt to take over control of my interview process, insisting that certain things are discussed when you want to discuss them, and not when I want to discuss them, you’ll be shown the door, and then you can go home and blog about how “obtuse” it all was.

I don’t think one has to work too hard to see how an interviewer, faced with such a situation, might have concerns about the individual’s general willingness to do what he’s asked.

If not, thank you for clearly stating your opinion.

Per your request concerning “deceit”: to “hijack” means to engage in stealing or seizing.

1. The article author’s recommendation to essentially hijack the employer’s hiring process, and

2. The employee’s desire to maximize his earnings.

If the employer wants to discuss salary early in the process, and you refuse to do so as a negotiation tactic, I think 9 times out of 10 you’re ultimately going to lose out, in terms of getting the job, much less getting the salary you’re after. (You certainly would with me.)

Regarding the second, you are right; there’s nothing at all wrong with someone seeking to maximize their economic self-interests.

I think, however, there are some subtle but important differences between a salary negotiation during a hiring process, and the purchase of something like a house. In a hiring process, you and the employer are mutually considering a potentially long-term relationship.

Consider the following (and these are just honest, personal observations):

1) I’ve been operating businesses for close to 12 years, and have seen a strong correlation between those who strongly seek to squeeze the most out of salary negotiations (and would apply diversion tactics like those recommended in this article), with those who tend to be unproductive, generally unsatisfied, and (relatively) transient job-hoppers (always seeking to move to the next, better opportunity.)

2) Also in my experience, the individuals I really want to hire (i.e. the talented, productive ones) are usually far more interested in the work they are performing and improving themselves professionally, than maximizing their compensation. That doesn’t mean they necessarily end up financially exploited; On the contrary, the competitive demand for such individuals tends to naturally drive upwards the salaries they are offered.

Given my past experience, during a hiring process with me, anyone following the advise of this article would, simply from these past experiences, be very unlikely to get the job.

Your response may be: “I’m looking for something around $XX,XXX to $XXX,XXX, depending on your total compensation package.”

Of course this assumes you know the range going into an inteview (which may be difficult with some jobs).

What a pompous, arrogant comment. Have you forgotten all of the reasons why it is good to work for someone else?

It’s not always lollipops and leprechans working for yourself. My employer provides awesome health insurance, life insurance, disability, 2:1 403(b) match, huge spending account allowances, dental, and a host of other financial perks. What perks do you get?

You should be aware that there is nothing wrong with an interviewee being cognizant of and prepared for the all-too-common “salary bottom hiring” situation. It’s not about “hi-jacking your process”… it is about individuals knowing their worth in the market and intelligently negotiating to realize that worth – which is the point of this article.

Isn’t this just kinda like buying a house. Your house is worth whatever someone is willing to pay for it. Same with my worth to you as an employee. I’m worth as much as you are going to pay me, so why wouldn’t I try and squeeze as much as you can afford out of the deal.

I may decide that salary needs to be discussed at point X in the process for any number of reasons, and would consider the risk that anyone who repeatedly insists on hijacking my hiring process might just decide to later hijack other processes I’ve developed for my business.

You are advising people to try to identify and reach the top of the employer’s “range”. I believe that’s the wrong approach, and carries a high probability of starting a relationship on the wrong foot (if it starts at all). In my experience, people who are more concerned with the relative, than the absolute, have a tendency to be generally unsatisfied.

The right approach would be to come to the interview having done your homework, and having determined your worth in the market, deciding if you’re content with that worth, and then making a well-supported case for it.

You may not end up at the “top of the range”, but you’ll likely end up at a level you’re happy with, and which you consider fair and equitable. And, I would expect, you’ll begin a far healthier relationship with your new employer.

Hehe. I can just imagine how that would have gone over in any of the positions I’ve ever interviewed for (all either financial advising related or accounting related).

The silence bit is a sales tactic that’s been used for ages–because it works. Only catch: It doesn’t work as well on people who also have a lot of sales/negotiation experience.

Great summary of suggestions.