Discussing your salary history can be the most uncomfortable moment in a negotiation. But what do you really have to say? Follow these steps to be honest without being vulnerable.
By Kevin Fogarty
Few professional conversations are more awkward than those about how much money you make.
For job seekers, though, salary and compensation history isn't just an uncomfortable topic to avoid with a relative. It's often a make-or-break moment in a long-sought job interview.
You probably don’t want to answer the question about your salary history at all, and most employment lawyers and job-interview experts say your best bet is to dodge the question and focus on your potential value to the company, not your current paycheck.
There is no legal protection to prohibit a recruiter or hiring manager from asking the question or pressing you to provide an answer. So prepare an answer that you can support but also maintains your control of the situation.
There is a significant risk of either pricing yourself out of a job or lowballing a potential offer, according to David A. Earle, lead researcher at Staffing.org, an analyst company that measures recruiting trends.
"If you really need the job, you're at a disadvantage; if you end up taking an offer that's too low, you're going to find out about it around the water cooler," Earle said. "If you're an in-demand candidate, it's a different psychological situation. Then there's nothing wrong with walking in and saying 'I make $170,000 where I am and would need at least $190,000 to even think about leaving."
Hiring managers are under enormous pressure to keep salaries down, said Ed McGlynn, managing director of Financial Recruiters LLC and a former senior vice president at Lehman Brothers. But if they press too hard, it might be a sign the candidate should remove the opportunity from serious consideration. "If I got that question in an interview, I'd think, 'This guy's trying to get me for the lowest price he can get,' and I'd have to wonder if I wanted to work for him," McGlynn said.
Whether the question is asked at all and what part it plays in the negotiation depend largely on leverage — something few professionals have in the job market right now, according to Stephen E. Seckler, president of Seckler Legal Consulting in Newton, Mass., a consultancy that advises law firms on how to manage their businesses more effectively.
"It's very difficult to not answer that question if it's asked straight out," Seckler said. "It's not usually to your advantage to answer, but saying you don't feel like answering sends the signal that you're not a cooperative person. They're screening you partly to see if (you're) someone they want to work with, and that could create a problematic impression."
Most negotiation experts say the first person to speak a number or make an offer is at a disadvantage because they give the other party a target to shoot down – in this case telling a job candidate the number is far too high for the position or budget, whether it is or not.
Victoria Pynchon a veteran litigator-turned professional negotiator as a mediator at ADR Services, emphasizes the importance of preparation. Do your homework, and be able to back up your negotiating position with evidence from Salary.com, professional association surveys and other sources that provide hard, competitive numbers.
Dodge and deflect
Refusing to answer when asked point-blank or lying about how much you were paid in order to push up the amount of any possible offer is the absolute worst option for a job seeker, McGlynn, Earle and Seckler agreed.
"Part of the company's due diligence on you is going to be checking references, and there's a good chance they're going to find out either then or later what your real salary was," Seckler said. "You're basically starting out by giving the company a reason to fire you if they ever want to, even if there wasn’t cause for it then."
The best way to deal with the question is to deflect it, McGlynn said. If you can't, break your whole compensation package down to show where the value lies. Your salary might have been X, but your bonus was Y for specific accomplishments you can name, he said.
Being honest doesn't mean being vulnerable, Seckler said.
"It's very important to know where you stand, and there's far too much information available online about salaries and compensation to not know how you compared," Searle agreed. "If you made $142,000 and you know damn well that this position rarely pays less than $130,000 – and you're willing to take that – then if they come back with an offer of $120,000, you know that's outside your playing field and they're just trying to screw you."
The bottom line
To prepare and execute a salary negotiation, follow these steps:
- Research competitive salary information for your position, industry and region.
- Calculate the total value of your last compensation package, including base, bonus, commission and any other extras. Be prepared to be specific and exhaustive.
- If you’re asked for salary history, ask what the company is prepared to offer.
- Don’t lie. Expect that the company can and will check every number.
- Explain why you’re worth what you’re asking based on your research of the market, not your previous salary.
Kevin Fogarty is a general assignment reporter for TheLadders.