When is the best time to negotiate a salary offer?
The interview process is going well — you’re confident that you’ve excelled on all fronts, and the job appears to be yours — but you know the big question is still coming: “What are your salary requirements?”
It’s a query that experienced job seekers, as well as those new to the workforce, struggle to answer the right way. So when should you negotiate on salary?
“The conversation should take place, ideally, after you’ve been offered the position because you have the most leverage,” says Charles Hon, PhD, an instructor in the MBA program at the University of Phoenix® Fairfield County Campus in Connecticut, and a former senior director at Pfizer Inc. “They’ve committed to say that they want you.”
But it’s not always that straightforward. The salary question may arise early in the interview process, which can catch you off guard. So, Hon says, arm yourself with several possible responses so you can deflect answering directly until you feel the time is right.
“There are two ways to do it,” adds Elaine McCarty, MA, a human resource manager and area chair of the human resource program at the University’s Milwaukee Campus. “You could be forthright and say, ‘I want to learn more about the company first,’ or turn the question around on the interviewer by saying, ‘I’d like to know how you value the position and what you feel the position is worth.’”
Some job seekers, desperate to land a position, may suggest a figure lower than they desire or believe they’re worth, hoping to negotiate a higher salary later. But both McCarty and Hon caution against employing that tactic. They point out that employers usually have a salary range in mind, and going low can leave a bad impression.
It’s important to show confidence in your abilities and that you have a lot to offer an employer.
“It’s the wrong strategy to take,” Hon says. “You’re telling the employer that you don’t think too much of yourself. You should know what you are worth.”
In fact, the opposite tack may be more effective. A salary study by University of Idaho Psychology Professor Todd Thorsteinson required candidates for an administrative assistant position to jokingly request a salary of $100,000 or $1 million. Those who asked for the big payday, the study found, were offered salaries averaging 9 percent higher than those who requested what would be considered an amount in line with the job.
The key in employing this approach, known as “anchoring,” Thorsteinson says, is for the job applicant to make the joking comment before receiving a job offer, “so [it] can serve as an anchor for the employer’s counteroffer. The anchor paints a picture of perceived value,” which can last with the employer even if new information comes to light.
Essentially, once the baseline is established in someone’s mind, Thorsteinson adds, that value is hard to change, even if it’s as wild as a $1 million salary.
One way to feel more comfortable in salary negotiations is to find out what others in similar positions earn. Websites such as Glassdoor and Monster often provide salary figures, and PayScale actually specializes in salary comparisons. Or, if you have contacts at the company you’re interested in, they may be able to tell you the going rate there.
“It can’t hurt to do research and see what other companies might be paying, but you can never quite be sure of the validity of the information,” McCarty says. “It’s hard to pinpoint the accuracy of salary websites,” but you should be able to at least find out a general pay range for the job.
Experienced professionals “will have a sense of what they want going in,” she notes. “Folks who are new to the market, who are just getting their degree, will have to do a bit more homework.”
Regardless of when the salary discussion arises, it’s important to show confidence in your abilities and that you have a lot to offer an employer.
“People forget that when employers ask the salary question early, it’s for the purpose of exclusion,” Hon says, especially during a screening interview by phone.
“You have to say, ‘I’ve done research on the company, and based on what I’ve read and understand, I’m sure the salary [you will offer] is fair for the job we’re discussing.’ If you throw that at them, what are they going to say? That it’s not?”