Discussing Compensation in the Interview Process

I hear the question very often: “What do I say when they ask me about money?” The answer is pretty simple, assuming that you have some general understanding that your expectations are at least “in the ballpark” of what they can pay (your recruiter or the job posting should guide you there). The money question is usually split into two parts:

1. ” What are you currently earning or what has been your recent salary history?” That is very straigthforward and should be answered candidly. Most employment applications will ask for that information, and many companies will ask for a copy of your pay stub or W2 / 1099 to verify the data before they extend an offer.

And then the follow-up, tricky question:
2. “What are your salary expectations?” Unless you think that you may be wasting your time and theirs, don’t reply with a number (either verbally or on the application). If your number is too high it may screen you out of the process, and if it is too low then you’re likely to leave money on the table. Simply talk about fairness – something like: “From what I’ve learned about your company, I’m sure that if I were fortunate enough to receive an offer that it would be fair and reasonable, based on my background and experience.” Then work with your recruiter to broker an offer that will be a win-win for both sides.

In that way you can achieve your goals as well as those of your future employer, without burning up political capital with them before you even start! Your recruiter is usually incented to get you the best deal possible, within market value, so be candid with him or her and in the end you’ll be assured that the process was fair and equitable.

Remember that regardless of how well you interview or how badly the hiring manager may want you on the team, the employer is bound by the constraints of “internal equity.” They can’t bring someone new into the organization who has a similar profile and amount of industry experience as current employees and pay the new person at a higher rate. So the employer has to find a balance between incenting the candidate to take the job and not blowing their own internal equity. Hopefully they are communicating to the candidate about this challenge they face – if not they’re likely to build resentment among candidates who frequently don’t know about how the process works.

If candidate’s are made aware of the internal equity challenge and persist in pushing for an offer that is beyond what the company can provide things generally don’t work out. The offer is extended and ultimately rejected, which is OK for the candidate but a waste of time for the employer. There are other, more hopeful situations where the candidate’s expectations are within the range of internal equity constraints and they want to ensure that they maximize the offer. That is normal and expected and a win-win can almost always be found by open, transparent communication. However, I’ve seen a few situations where a protracted “negotiating” process creates so much frustration for the employer that the offer is rescinded. This is where a recruiter can really help both sides in fostering communication and making sure that a fair, reasonable offer is accepted.

There’s no magic to it – both sides need to be clear about what they need and why they need it. As always I welcome your comments and questions.


Posted on November 25, 2013, in Uncategorized and tagged , , , , . Bookmark the permalink. Leave a comment.

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