Let’s Talk Money: Handle Salary Conversations Like a Pro

show me the moneyWhether you’re in an interview, or you want to approach your boss about a raise, the money topic can be prickly to maneuver. Just how should you answer that dreaded question, “What’s your salary expectations?”  Here’s a 4-step process that allows you to handle the money conversation with confidence and ease.

Step 1: Do your research.  Before the interview or conversation, identify salary ranges for similar positions in similar industries. Search websites like: www.salary.com, www.payscale.com and www.glassdoor.com.   This gives you a place to start from.

Step 2: Identify your range.  Identify a range that you can site for your salary expectations.  Start by identifying your “walk away rate” – the minimum that you would be willing to accept and feel comfortable earning for the first 2 years of the job.  At the top end of your range, identify a number that is your “ideal rate.”  This is the figure that you’d love to make!

Tip: Your range can be quite broad. It’s not unusual for someone making 6 figures to indicate a salary expectation somewhere between $120,000 to $160,000/yr.  Alternatively, if someone is used to making $45,000, her salary range expectations may be tighter, say from $40,000 to $55,000/yr.

Step 3:  Get clear on your negotiating chips.  A conversation about compensation isn’t just about money.  There are often several other factors that you’ll need to consider to have a clear picture of what’s right for you.  Employers often call these things perks; I like to call them negotiating chips.

Negotiating chips that can offset a lower salary might be:

  • A shorter commute length or work-from-home options
  • A paid parking spot
  • A paid gym membership
  • Some precious experience in a new career area
  • The opportunity to transition from a contract worker to a permanent employee
  • A work culture that’s a better fit

Determine what’s important to you. For example, you may be open to accepting a lower salary if the job offers a much shorter commute – or the opportunity to work from home on a regular basis.  Ask yourself, how much is that worth to me in real dollars?

What about taking a role in a new career area?  Should you take a pay cut to gain valuable experience? Yes and no.  While I’ve always prioritized the right experience over the right paycheck, you still need to earn enough income to live on.  That’s where your “walk away rate” comes in.  Beyond that level, it’s up to you to determine how valuable the learning and experience will be.

Bottom line: look beyond the money.  Assign a dollar value to the elements of the job that you prize.  Only then can you be confident that the total compensation picture is right for you.

A word about bonuses. You’ll notice that I didn’t add ‘the opportunity for bonuses’ in the list of negotiating chips. There’s a reason for that.  Unless you’re vying for a sales position – where you’re likely to be paid a base salary plus a regular sales commission – you should exclude bonuses from your compensation considerations.  Why?  Because, unlike a paid parking spot or daily commute, they are inconsistent.  Market forces and shifting job expectations can wipe out bonuses in a blink.  When considering compensation, keep bonuses where they should be: a happy surprise.  [For more info on different types of bonuses visit http://www.salary.com/types-of-bonuses/]

Step 4: Explain your range.  There will inevitably be a need to qualify or explain your salary range to the employer.  You can use language such as,

“Every job is different.  It comes with a different set of requirements, location, salary, benefits, and opportunity. Candidly, money is not my only concern here. There are other elements of the job that are important to me, and I may be willing to accept a salary at the lower end of this range if those elements are part of the total compensation package. Nevertheless, at a broad level, I’m willing to consider something within this range.”  

This response signals to them that for the right opportunity – you’re willing to negotiate within this range and it prevents you from backing yourself into a corner.

While money conversations often cause people stress and anxiety, they don’t have to. With a little preparation and carefully chosen language, you can make the right impression, and get the perfect blend of salary and perks that work for you.

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