Talking Salary: Get Ready Guide

Sub Title: How to ask for the pay you think you deserve

Dennis Guzik

Quick Summary/Intro

One of the most frequent questions I receive is about how to discuss salary with an employer.  In this article I will provide some observations and tips that I hope will help you negotiate your way to fair compensation!

Setting the Scene
One of the most important aspects when discussing salary is that it is only one part of the larger total compensation discussion.  It may be the largest, in terms of dollars, but there are other concerns that could result in your accepting a lower salary, but with a larger total compensation.  For example, the four major parts of total compensation are: salary, health care coverage, retirement benefits, and paid time off.  It makes no sense (regarding compensation) to take a job that has a $1,000 higher salary, but with less health care coverage resulting in $2,000 out of pocket costs to you.  Conversely, if time off (e.g., for maternity care) is important to you, you need to consider how much less salary you’d accept to join a company with generous time off benefits.

But this article is about salary; in a future article I will further discuss total compensation.

There are two different cases that we need to discuss.  First is discussing salary when you are being offered a new job.  The second is discussing salary adjustments for a job you are already doing. 

The one point that they both have in common, and this is critical: It is up to you to get your act together.  You need to be able to say why you deserve the salary you want, and this should be in terms of what you will do for your employer, not what it will do for you!

Case 1: Discussing Salary for a New Job Offer

Your job search has produced a great opportunity, and you are interviewing for the job!  Then the dreaded question comes up:  What are your salary requirements?  From my experience, if the candidate hasn’t thought this through ahead of time, they tend to waffle, or babble something they think will make the interviewer put out a number first, because they have heard that is what they should want.  Frankly, it makes the job seeker look unprepared, which is not what you want.

So, the first thing you should do is a little research – before the interview!  For the job you are seeking, what are typical salaries?  You can find insights in places such as salary.com, or maybe from your school placement office.  But be aware that those numbers are typically higher than the true average.  That is because the people entering the salaries that form the data for their reporting are usually those that got a good salary and they are happy to report it.  Those who start at what they consider to be less than a good salary tends to not report it.  So, take that information as just one data point.  A second consideration is how strong your candidacy for the job is.  Be honest - Is your degree from a highly regarded school and your grade point average high?  Or, is your degree from a relatively unknown school, and your grades are somewhat below average?  Hiring managers take these things into consideration.  But the good news is that they matter only up until you get the job.  After that, its all about how well you perform.

So, now that you know what a typical range is for your position, you need to think about how you want to live.  This helps form your minimum.  In my opinion there are two primary considerations you need to include.  First, at what minimum salary will I come to work each day feeling under paid and unappreciated?  That can lead to poor performance, and a downward spiral for your career.  It’s OK to take a lower paying job if you think it will lead to bigger and better things in the future, but if these things don’t materialize you may need to move on.

Second, is that you have bills to pay. If you can’t pay your bills on that minimum salary then, if you take the job, you will probably quickly start looking for another that allows you to pay those bills.  And by bills, I do not mean things like a twice a year trip overseas or an expensive lifestyle.  You may have school loans that need to be paid, and everyone has to eat.  Where and how you reside can be a major factor.  You can live in a small space with a roommate to save money, but if the salary is so low you find you’ll have to live in an unsafe environment, then that job may not be worth it.

Let’s face it.  If you are starting out your career and do not have the benefit of having worked at the company as an intern where they know your potential, then you have little leverage in the salary discussion.  Most companies don’t have too much wiggle room for negotiation.  Companies need to consider what others in a similar position are currently being paid.  So, if they ask for a number (or range), let them know what it is.  If your number (or range), is not possible for them, let them tell you.  If that’s the case, and the salary offered is below your number AND other particulars of the position, such as career potential or aspects of total compensation, don’t over weigh the offered salary, it’s time to move on with your job search.

Case 2: Discussing Salary for Your Current Job

In this case you already have a job and an established salary history (however short that history may be).  But you want to have a discussion with your manager about upping that salary.  How you do that is what we will discuss.

When you took the position, did you ask how you will be evaluated (performance) and if there are standard periodic salary reviews?  Did you ask about how the performance evaluation impacts salary changes?  If you didn’t, then you need to have this discussion with your manager as soon as possible.  Expecting to get a good performance review or salary adjustment when you do not know how you will be evaluated is a recipe for disappointment.  If your company has not established a periodic salary review process and you feel you deserve a raise, then you should ask your manager for a meeting to discuss it. 

You need to prepare for this discussion with rationale for the raise, in terms of what you can do for the company.  Your manager needs time to prepare as well.  You manager may ask HR for data to compare your salary to others in a similar position and review your performance.  So do not “pop in” for these meetings; put them on the calendar allowing enough time for everyone to prepare.  The length of your employment is also a factor in asking for this meeting.  Typically, for new hires, it will be no sooner than after your first year of work.  In my opinion, if you’ve gone over two years of employment and have not had this discussion you should ask for it.

If the company does periodic salary reviews, then this is the best time to have that discussion.  You should prepare for this discussion by reviewing your accomplishments since you were hired.  It is up to you to provide the reason for the raise, not your manager’s.  As we discussed above, jobs are typically banded into levels, and where you fit within a level will be a large factor in what you will be paid.  If you can make the argument that you should be promoted to a higher level based on your performance, then that makes a strong justification of your salary increase.

Even if your company has scheduled periodic reviews, you can still discuss salary adjustments at other times.  These are out of cycle salary reviews.  You typically need a good reason for them, such as being assigned additional, long-term work.  Note that if you ask for one and it’s only a month or two until, or since, the scheduled periodic review, you most likely will be asked to wait.

Conclusion

Salary discussions can be intimidating and sensitive.  If you find those sorts of conversations difficult, I recommend you look for help in having those types of conversations as they will occur in other aspect of your career as well.  I’ve found that Crucial Conversations by Patterson, Grenny, McMillan and Switzler to be great resource for all type of sensitive discussions, and well worth the time it takes to read it.

You deserve compensation that corresponds to your performance and the contributions you make, or expect to make, to the company.  The company has to control costs, but also wants talented employees and a low turnover.  A win-win solution is possible with open communication.