Most people feel a little nervous discussing money,
myself admittedly included.
When we're asked, what are your salary expectations,
it can feel like a trap that's going
to force us into asking too much, too soon, or too little,
too late.
We compiled the advice from career coaches here at Indeed,
and I'm here to share the three most common mistakes
that people make when negotiating their salaries
and three strategies for how to avoid them.
We will also explain what an employer expects during salary
negotiations and provide real-world examples
along the way.
Be sure to stick around to the end
for an example of a strong response
to give a hiring manager when they ask you, what
are your salary expectations?
So first let's quickly understand salary negotiations
from an employer's point of view,
because it's key to understanding
how these mistakes and miscommunications often occur.
Hiring is a time-consuming process for everyone.
Most employers will ask about salary expectations
on the first phone call, because if there's
an insurmountable gap between what they think the job is
worth and what you as an employee want to be paid,
it's just going to waste everybody's time.
Pro tip-- if a company is small or a startup,
they may actually be using the "what are your salary
expectations?" question as a way to do a general market survey
for figuring out how much they should actually
be paying someone for the role.
With established companies, it's very likely
that they've already had HR do market research to figure out
what they believe that role is worth
and how much they're willing to pay for it.
It's a myth that a hiring manager
has full autonomy in how much they can pay someone.
Typically, they do have some wiggle room, more than
what their initial offer is, but particularly
in uncertain economies, it's really not
as much as you would imagine.
Another myth is that employers will typically
choose the cheapest candidate or the person who
provides the lowest salary ask for the role.
Well, obviously everyone would love to conserve resources.
The saying goes, "You get what you pay for,"
and that's definitely true in a lot of cases for hiring, all
that to say, as a job seeker, it's
wise to understand that there is a cap on what
an employer can offer you.
But low-balling your salary doesn't necessarily
guarantee you a competitive edge to getting hired.
Instead, do market research on what
people with your qualifications and years of experience
are typically paid, and then assess
what you believe a fair but attractive offer would
typically be.
If you'd like to learn more about salaries across locations
for that market research, I highly
recommend checking out Indeed's Salary Calculator right there.
So that we understand the factors
that an employer typically is considering
during salary negotiations, let's
talk about the common mistakes job seekers
make when discussing compensation.
Salary negotiation mistake number one--
being the first to disclose a specific dollar amount.
In the past, recruiters were trained
to get their candidates to reveal their salary
expectations first.
Now, recent legal changes have limited how far they can really
go in pushing you to answer that question,
but the same generally holds true today,
that they're going to want you to reveal your number first.
You, of course, want to be obliging in the interview
process, but in this particular instance,
go ahead and flip that question back to the interviewer.
Companies are already at an advantage here
in this interview process, because they
have their own historical salary data
and they know how much they're willing to pay for the role.
So let's take a look at a real-world example here.
Let's say an employer is doing initial phone
screening with you, and you're asked,
what are you looking for for pay?
Now, you can go ahead and just respond with something
as simple as, it's so early in the process
that I'm still learning what the role and responsibilities are,
so my expectations are flexible at the moment,
plus there's many other considerations
that I make when it comes to joining
a new company beyond pay.
But flip then the question to them
and say, "What have you budgeted for the role?"
Another common way that employer will try and get at this answer
from you is to ask about your salary range,
so they're trying to basically see how flexible you are
and then levels of expectations as needed
based on how big that gap is between what you want
and what they desire.
As a candidate, however, you can certainly
ask, well, "What is the salary range for this position?"
Or, "What are comparable salaries for people
already in this role?"
This leads us right into our second rule,
but before I hop into it, I would
like to just quickly say if you've watched this far
and it's been helpful, please give us a like
and subscribe down below and hit the Notification bell.
All right, mistake number two-- waiting until the final step
to discuss compensation.
Sometimes salary isn't brought up
until an offer is on the table.
This typically happens from a broken hiring process
caused by an assumption by the employer
that you'll just take any salary or other issues
that you aren't aware of.
Regardless, while you don't want to be
the first to reveal a dollar amount,
you definitely don't want to be in this situation either.
Actually, it's in everybody's best interest
to discuss salary before a final offer,
because it's a lot of time and resources on both parts.
Not only does this maximize the efficiency of the process,
but it also avoids an anticipation cost on your end.
If you're spending a lot of energy and resources
and have excitement building up preparing for this final offer
only to find that it's completely impossible for you
to make it work, that's a worst case scenario for sure.
So it's advisable to go ahead and disclose prior.
Now, if you've had a phone screen and one or two
interviews already and you don't get the sense that the salary
conversation is coming up any time soon,
it's advisable to go ahead and bring up money.
You can say, "I'm really excited about this opportunity.
What salary have you allocated for the right person?"
Or you can say, "The job posting wasn't
really specific about the hourly rate, what is that?"
There's one critical consideration to make here,
which is be careful about who you raise this topic with.
If it's the HR person that you're interviewing with,
a potential manager, or a higher level executive, that's fine.
Go ahead and ask them about the salary range.
However, if there's someone within the organization that
would be at your level or lower that you're speaking to,
it's not advisable to ask them.
Mistake number three is focusing only on salary.
This sounds counterintuitive.
We all work for pay.
If you aren't getting paid, you are volunteering.
But, focusing on the take-home salary and income specifically
can actually obscure other important factors
that are necessary to consider when
making such a large decision.
So the first factor here is to really understand
what you are worth and what is standard,
not only in terms of salary, but the full picture.
What are typical compensation packages?
To get an understanding of this, I would absolutely, of course,
recommend checking out Indeed's Salary Calculator
for a sense of just salary, but you can also
speak with people in comparable positions
for what their standard compensation
package has been throughout their career experience.
And finally, you can even reach out
to recruiters who are unaffiliated with those
interviewing you to try and get a sense of what's standard
in terms of a typical offer overall for this type of role.
So the next step here is to have an honest conversation
with yourself and what you value most in getting out
of this opportunity.
So I have a few considerations and questions
to ask yourself written down here.
What pay would make me feel valued in the long term?
How does this job get me to where
I want to go developmentally?
Is the scope of this job reasonable
for the expected rate, or would I quickly feel resentful
if I wasn't given a raise?
And then finally, what is my walk-away number?
Like I said, giving a salary range,
you'd like to generally avoid in a first conversation.
It's definitely valuable to create one for yourself.
What is the bottom number you would expect before this just
isn't worth your time?
So a drastic, obvious example would
be if you know that the compensation for your role
and experience is typically six figures,
you would probably walk away if you were offered 75K.
So once you've assessed your market value
and you've determined what's most important to you
to get out of this opportunity, then
examine the full compensation package.
So this, of course, is really important
when it comes to take-home salary,
but the point of this tip is basically,
don't focus only on that.
Consider all the other pieces of the puzzle.
If it's benefits, if it's organizational development,
all those things are really critical to consider.
So read that contract line by line.
What is the health care coverage like?
What are the retirement benefits?
Do you get equity in the company?
What is the value of PTO?
Two weeks off is a full paycheck, for example,
if that's compensated.
There are also other benefits to a job,
like a flexible work schedule or a shorter performance review
cycle that might make you eligible for a raise sooner.
All of these things not only pose
as benefits to you or things to consider when taking the job,
but they are just as much on the table for negotiation
as take-home income is.
So for example, if they can't raise their cap on the salary
in order to get you to sign, maybe they'd
be more receptive to giving you another week of PTO
or a shorter review cycle so that you
can prove your value more quickly
and potentially be eligible for a raise sooner.
And of course, if you're considering multiple job
offers, play them wisely against each other
rather than just taking the first one
that clearly might seem like it pays a bit more money.
Of course, if there's a big gap, that's
notable and something that would necessitate some more
evaluation.
But if the difference is 5K or $2,000 less a year
than you'd be making one place versus the other,
it's really worthwhile to consider career development
factors, the full range of benefits,
because between opportunities for a bonus or quicker
promotion, that difference is really going to even out pretty
quickly.
So to quickly recap, here are three common mistakes
to avoid when negotiating your salary.
One, don't be the first to reveal a number.
Instead, flip that question right back to the interviewer.
Two, don't wait till the final offer to discuss compensation.
Instead, know that it's OK to bring up money.
And three, don't focus only on your base pay.
This applies to both negotiation and when making
your final offer decision.
Instead, know that there's a lot of other factors
that may be more important to you.
If you found this video helpful, please let us
know by liking down below and subscribing to our channel
right here.
For more interviewing tips, I highly
recommend checking out this playlist,
and you can also check out this video
for formulating a great elevator pitch.
Thank you so much for watching.
Best of luck negotiating, and I'll see you next time.