Salary negotiations: a guide for interviewees
Interviewing for a new job is always exciting. It’s a great opportunity to reflect on your skills and experience, learn all about a new company or industry, and connect with your interviewers on a human level.
But there’s one uncomfortable step that’s difficult to approach with confidence: the salary negotiation.
A simple Google search for ‘salary negotiation tips’ comes up with 156 million results. So if you don’t know how to address the salary topic, you’re not alone.
Salary negotiations have far-reaching implications for your career trajectory. Luckily, negotiation is a learned skill that you can improve upon over time. And these conversations become more natural with practice.
This article provides the essential dos and don’ts of negotiating your salary.
Why is it important to negotiate your salary?
In a perfect world, people doing the same job with the same experience and qualifications would be paid exactly the same. But we don’t live in a perfect world. Human biases and systemic inequalities mean that similar roles don’t guarantee identical compensation.
Salaries are not equitable across the board. Two similar candidates applying for the same job may receive two different salary offers. And the only real difference could be negotiation.
Here are some quick statistics that demonstrate the consequences, good and bad, of salary negotiations:
People who don’t negotiate their salary at all could lose out on $1.5 million in earnings over the span of their career
Globally, women earn 20% less than men on average, partly due to lack of negotiating
Women are still not paid equally to men for the same job, even when controlling for factors such as education and experience
This gap is even larger for people of color, especially women of color
Despite the bad news out there, there are some optimistic indicators that pay gaps are closing and salary transparency will be the new norm going forward:
Some US states now require companies to put salary ranges in job announcements
Europe will follow suit, although not until 2024
If you’re looking for more information regarding salaries in finance, be sure to check out our 2023 CFO Salary Benchmark and our CFO Yeah! podcast episode with Jana Ludwig-Martyushev on women’s financial independence:
Before negotiations begin: determine your market value
Ample preparation is the key to entering salary negotiations with confidence.
Before negotiations even begin, start with research to help you determine your own market value. This gives you a realistic estimate of how high the salary could be.
Several factors play a role here: career starters earn less than employees with many years’ worth of experience. Qualifications, certifications, and specializations also tilt the scales.
There are also factors such as the size of the company, its location and industry, and the number of employees.
Salary grids, where companies lay out the range of salaries, organized by level and experience, can provide an indication of market value. Compare your earnings with the average salary in your own industry and other industries.
If you have a relocation package that includes professional cross-country moving solutions, that may impact your negotiation power. However, the amount of money you can ask for depends on whether your placement is permanent or temporary.
Tip: when relocating to a new city or country, there are some helpful tools like Numbeo that help you compare the costs of living between various locations. You can compare elements such as rent, consumer prices, groceries, restaurants, and more.
Also keep in mind the different tax systems between different countries. Sometimes the package might seem lower than what you have now, but low income taxes might lead to a higher net salary in the end.
All of these factors should be taken into account when prepping for your negotiations.
Best practices for salary negotiations
So you’ve prepared, done your research, and you can speak confidently about your market value. It’s time to dive into the dos and don’ts of salary negotiation:
Get a feel for the company culture before discussing money
Opinions differ when it comes to discussing salary in the first interview. In fact, most traditional advice about interviews and salary negotiations has gone out the window.
Conventional wisdom would dictate that you shouldn’t ask about salary right away. However, if your first conversation is with a recruiter, they sometimes want to know quickly whether your salary expectations and their budget match up.
At Spendesk, we value transparency and are happy to discuss salary at the first step. Try to get a feel for the company culture during your research and see if they’re more traditional; if so, know that salary probably won’t be discussed right away, and asking about the salary in the first conversation may be perceived negatively.
Basically, be prepared for both scenarios. Don’t make salary the main focus of your conversations, but know that a recruiter could ask you up front about your expectations. If it’s a traditional company, avoid asking about salary and let the interviewer bring it up first.
Don’t sell yourself short
Don’t use your current salary as a starting point.
Maybe you were underpaid at your last job, or this new role will be a big jump in responsibility or seniority. Or perhaps you’ll be relocating to another city where the salaries (and cost of living) are much higher.
All these reasons mean that your current salary has little to do with the salary you’ll earn at the new job. Ask for compensation that fits the role, location, industry, and your unique qualifications.
Don’t sell yourself below value, or start off with a lowball offer. Once you give a number that’s too low, it’s extremely difficult to go higher.
Again, preparation and research is critical. Regardless of what you’re currently earning, ask for what you think your work is worth and what you deserve.
Be confident in your worth
This part is, admittedly, easier said than done. Being prepared is a crucial component here. If you come to the negotiating table prepped and ready with facts, figures, and concrete examples of success in your previous roles, then you will automatically feel more confident.
Present yourself with authority. You know your skills and experience better than anyone. Speak slowly and clearly, don’t rush, and highlight the moments in your career you’re most proud of and the skills that make you a good fit for this role.
Talk about your qualifications, your accomplishments, your plans, and how the company would benefit from having you. Demonstrate how the company needs you, rather than how you need them.
Don’t rush to accept
If you receive an offer, don’t just accept it immediately. Take some time to think it over and read through the offer properly. If you have questions, reach out for clarification.
Usually, companies give you enough time to make an informed decision. If a company pressures you to decide right away, this can be a small red flag. The right ones will want you to reflect on the offer and are willing to wait for the right candidate.
Remember: joining a new company is a two-way street. Just as much as the company is deciding to hire you, you are also making the decision to bring your skills and qualifications to them. Make sure it’s the right fit for you before accepting the offer.
Ask relevant questions
During your interview, listen carefully, try to read between the lines, and ask relevant questions.
Here are some great questions to ask in your interviews:
How is success measured in this role/what are the KPIs by which my performance will be measured?
Who will I be working with the most?
What are the growth opportunities/what is the growth trajectory within the role?
Who will I be reporting to?
Answers to these questions will help you decide if this role is right for you and provide insight into the company structure and culture. They will also help manage expectations about the role.
Have faith in yourself
Salary negotiation is a scary step in the hiring process, even for seasoned veterans. It can be uncomfortable and confusing, and also difficult to advocate for yourself.
Because money is such a sensitive topic, many candidates are afraid to ask for more money for fear of looking greedy or out of touch. Don’t fall prey to these negative thoughts.
Recruiters and hiring managers expect candidates to negotiate and to ask for a fair salary. Make sure that you come to the negotiating table prepared and with faith in your skills and expertise. Good luck!