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One of the most uncomfortable parts of switching jobs is salary negotiations. In our society, talking about money often makes people uncomfortable. That’s magnified in the employment process because parties on both sides of the desk-candidates and companies-try to maximize their negotiating leverage.
Since this is our Candidate Newsletter, let’s focus on those things that candidates should know about salary discussions in the hiring process. Let’s start with the basics.
Sometimes the first questions the candidate gets, either from a recruiter or a company, is "What kind of money are you looking for?" Candidates hate that question and they should. I never ask it because it’s meaningless. Often it’s asked by Joe or Jane HR in a phone interview before you’ve even seen the facility or heard any details on the job. How do you know what kind of salary you want if you don’t know the job, don’t know your manager, don’t know the benefits, etc? Plus, no one wants to ask for too little money and no one wants to price themselves out of range either. It’s a scary question. Here is the best advice I can give you.
DON’T start quoting some salary survey or your college placement office. All those figures are too broad to have any value and most are inflated because of the higher salaries in North Jersey/California, etc. Plus, most of the data in them comes from people reporting their own salaries in on-line surveys. The data is suspect.
DON’T start saying that you need a certain figure because your wife wants to quit work and you have to make up her salary. That has no relevance to the process. It may be true but it’s not the company’s issue. After all, if your wife was going back to work would you then accept a pay cut? Salaries are determined over time in a competitive marketplace. The salary a company will pay is based upon their existing salaries and the state of the market for your services. If you are selling your house and you need to get $200,000 to afford your next house but your neighbor just sold his house for $100,000, you won’t get the $200,000 you need because the market won’t support it. It doesn’t matter how badly you need it.
DON’T say that you need at least 10% more because you were told never to change jobs for less than 10%. When I first heard that statement it made a little sense. That was 1980 when the inflation rate was 8%. Now, with inflation at 1% and most raises at 3%, the "10% rule" has no meaning. Some people will have to work 3 years in their current job to reach that 10% increase. That doesn’t mean you can’t get 10%, it just means you shouldn’t treat it as a threshold.
OK, how do you answer the question then? What should you say when a company asks early in the interview process about your salary goals?
Be honest. Say to the person asking the question that you don’t have a specific answer. That it depends on the job, benefits and future of the company so it needs to be evaluated as a package. If you are pressed to go further, here is what you should do. Let’s assume you are making $60,000 and Joe HR wants a firm figure or range from you about your expectations. Tell him that you’ve spoken to a few recruiters and a few other companies about jobs in the $62,000 to $68,000 range and that seems reasonable but that you are open. Remember, it’s a market and that answer uses the market to avoid pinning yourself down. But beware; if the recruiter or HR person on the other side of the phone gets too focused on your salary needs that early in the process, it’s not a good sign. It reminds me of a contract recruiter who worked for a consulting firm. He would badger people to get a dollar commitment in the first phone screen. If they made an offer after the physical interview and the person hesitated or said no, he would get upset because, after all, "that’s what they asked for". In reality, that was what he tricked them into saying.
The other issue people face is specific to where we are now in the economic cycle. Some of you haven’t had raises in 3 years and some have taken paycheck maintenance jobs that were below your salaries in the year 2000. When a company asks you what your current salary is, how do you answer? Here is my advice.
DON’T refuse to give your current salary. I have had candidates refuse to tell me their current salary and that usually means it’s low. They are afraid that if they were making $68,000 in 2000 before being laid-off and had to settle for $50,000 in a "paycheck maintenance" job, the company will then base any offer on their current salary and not consider their earlier, higher salary. I understand the concern but a stubborn refusal to answer a salary question won’t help anyone and will often abort the process.
DON’T lie about your current salary and inflate it. Of course, lies are bad so you shouldn’t tell them. But you also need to know that many companies confirm your past salaries with your past employers after you have started your new job. If they find out you fibbed in your application they can and will fire you.
What should you do? You are making $50,000 in a lousy job that you had to take to pay your mortgage. You were at $68,000 4 years ago and the market is heating up again. How do you properly explain your salary to a company so they understand your situation?
First, you need to analyze your history. Which is out of whack, the current $50,000 or the prior $68,000? Don’t personalize this but there were people in some industries in 1998-2000 making very high salaries because companies in some industries were on hiring frenzies. If you worked in some areas of telecom or IT, your industry may not yet be at the level it was when you were at $68,000 so it’s going to be hard to get an unusually large "catch up" bump from $50,000. Does that mean you can’t make more than $50,000? No. It means that you might go from $50,000 to $56,000 and catch up at a pace along with the general economy. If the $68,000 is a representative salary from 2000 and the $50,000 is a representative salary from year 2002, the 2004 figure should be in between, just like the economy. Sometimes you can’t catch up all at once. Sorry.
Of course, you want to catch up as quickly as you can. Being straightforward is the best approach. When you are asked your past salary, let them know what it is and what it was in your prior job. Give them your history. That should help put it into context.
Sometimes, candidates are concerned about the perception of a quick job change. For example, imagine someone laid off in 2002 who had to accept a bad salary in 2003. Can they now look for a position in 2004 after only a year or is that too soon? My advice is to not worry about that. Most employers and managers are a pretty sophisticated group and they can sympathize with someone who had to move down a step to provide for their family. Don’t be a martyr and feel you need to be underemployed for 2 or 3 years to prevent be called a job hopper. If your prior background shows job stability, good companies will understand your situation. Of course, if your prior job history shows 6 jobs in 6 years you may have to wait awhile.
Lastly, the best advice I can give you is the simplest and sometimes people forget it. The best way to advance your salary is to do well on the interview. Be good at what you do and present yourself well. If you can do that, the salary will take care of itself.
In our next email we will address a stickier question - Salary Negotiations ~ Part 2/The Offer Process. After all, thankfully people are getting offers again. Thanks for your time. Jeff
Part 2: The Offer Process
In our last candidate newsletter we talked about salary expectations and about how salary issues are handled in the interview and pre-interview stage. Now it’s time to discuss what happens when someone actually wants to extend you an offer. A happy event but one, from a candidate perspective, that can be fraught with danger.
Generally, there are three possible viewpoints that a candidate can have in relation to getting an offer. One, they love the job and know that they want it. Two, they like the job but want to see what else is out there. Three, they hate the job and wouldn’t take it if they were starving. Salary negotiations in Scenario 1 tend to take care of themselves since everyone feels good about each other. The only reason to have salary negotiations in Scenario 3 is to jerk the company around to get an offer that you will end up refusing anyway. I wouldn’t advise anyone to do that because it eventually becomes obvious to the company and creates bad feelings. Wasting people’s time, for either ego gratification or potential counter offer purposes, is not a good idea. Your intentions become obvious and, amazingly enough for a region of 4,000,000 people, word gets out and you can get bitten in years to come.
It’s Scenario 2 that is most dangerous for candidates. How do you get an offer and keep your options open? What happens when a company wants a yes/no answer and you want to say-maybe?
Let’s look at this from the company side. Companies have a right to ask for a yes/no decision. Sometimes, candidates get shocked when they receive an offer and a company wants to know if they are going to accept. From the company perspective, throughout the interview process the candidate should be evaluating the opportunity and by the end of the process should be able to make a decision. If the candidate hasn’t gotten enough data (benefits, bonuses, etc) they should be prepared with a list of questions that, when answered, should allow them to say yes/no. In most circumstances, it is perfectly acceptable for the candidate to take a day or two to give their answer after speaking with their family, etc. It gets sticky when the candidate needs two weeks to give an answer because of other interviews. This is where a potential employer gets concerned. Often the company will have a backup candidate - someone who will get an offer if the first person turns it down. The longer the company gives the first person to make a decision the more chance the backup candidate will take something else, leaving them with nothing in the event the first person does turn them down. Companies need to balance their interest between a No.1 candidate who isn’t ready to make a commitment and a No.2 who may be eager to join them. Sometimes that eagerness can turn a No.2 into a No.1 pretty quickly, especially if the original No.1 handles this part of the process poorly. It may sound unfair for a company to give a candidate a few days to decide when the company may have taken weeks/months to make a decision themselves. You know what - it is unfair but it’s the company making the offer and they can set the terms. It’s their money. I am not saying it’s right. It’s just the way it is.
Often this can be shocking to the person who is making their first job change. The employment process for an experienced person is not like the process you may have seen as a fresh grad. Fresh grads collect offers over an employment season and sometimes take months to accept an offer. The process for an experienced person is much more cut and dry. Don’t let that catch you off guard. I once had a fellow get an offer in November and he did not expect to give the company a decision until March. The employer disagreed with his timetable. When he called in March to see if the offer could be reinstated, he got a very cold response. The company had filled the job months earlier.
Here is your situation. You are get an offer from a company you like (Company A) but you have a second interview in two weeks with another firm you like (Company B) and a first interview in a week at a third company (Company C). How do you keep your options open?
Let’s look at this step-by-step. If there were no other potential suitors for your services would you take Company A’s offer? If not, there is nothing to discuss because you don’t want the job. However, if you decide you would take the offer unless Company B or C are better opportunities, how do you get an keep a formal offer from A on the table yet still balance a continuing interview process with other firms?
To correctly answer that you need information from B and C. I have given the same advice to dozens of people over the last few years. You don’t want to jeopardize a good offer in your pocket for potentials that may lead nowhere. It is perfectly appropriate for you to contact B and tell them your situation and ask how many people are being brought back for second interviews and how long it will take B to make a decision after that. The answers and may tell you a lot. For example, B may say that you are one of five people being brought back and there is a third interview necessary after that. Bad odds and not worth jeopardizing your offer from A. Instead, Company B’s rep may say that you are the only one being brought back and that they will try and move the second interview up a week to help you. Good answer and one that shows a sensitivity to your situation. Generally, if they act like they don’t care it may not be a good place to work anyway.
Company C is tougher because you haven’t interviewed yet and you probably don’t have a good contact at the company to call. However, the same premise applies. Be straightforward with the recruiter or manager. There is nothing wrong with calling them to say, "I have just received an offer that interests me yet what I know of your firm interests me too. Can I get some info about your position and interviewing process that will help me decide if I want to risk the current offer or not?" Once again, a company that won’t answer or says they can’t speed up a month long process is telling you something. Also, if the recruiter seems more interested in finding out about your offer from A than in helping you get info about Company C - run as fast as you can. Keep in mind, you may find that Company C may be something you really want BUT you have to let Company A’s offer evaporate to pursue Company C and accept the risk that entails. Sometimes you can’t have everything.
Of course, we all know you can accept Company A’s offer and continue interviewing elsewhere. It’s not illegal and sometimes the process puts you in the corner. As a recruiter, I accept and understand that. You need to look out for yourself and your family. You may have the best intentions in accepting Company A’s job and Company B calls 2 weeks later with an offer/opportunity that blows you away. The best advice I can give is to try and handle the situation honestly. Are you possibly putting Company A in a bad spot? Sure. Is Company A going to go out of business? No. Stuff happens but proper planning and information gathering on your part can minimize the possibility of your being in a situation where you are going to have to disappoint someone. Part of your deliberation process should include that a potential bad rep you will get by walking out on Company A. Like we said earlier, it’s a surprisingly small world. Do what’s best for you but make sure Company C is much better for you than Company A before burning your bridges.
Whatever you do, don’t play companies off against each other. People aren’t fools and it becomes obvious. I’ve seen situations where both companies pulled their offers and the candidate was left with nothing. I’ve seen situations where a candidate went to work at one of the two competing companies but put the firm through so much angst that they ended up with a bull’s-eye on their back. It’s great to be wanted and an ego boost to be sought after, but it can also become addictive. Get through the employment process and get to work. Don’t forget that you always have to deliver in the end.
Thanks for your time. Jeff
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