Jul 28, 2006

Negotiating your salary

So the interview went off really well. You think you might get the job. The hiring manager seemed to like you. Then the HR guy calls you back and asks "So what's your salary expectation?"

Most people don't know how to react.

Should you say a 20% jump on your current salary? Will it sound too greedy?

So here is the inside dope:

  • A good salary negotiation done well ensures that you are within the salary band for the level.
  • If overdone or not done at all, you end up being an outlier or a lowlier from the band.
  • Both extremes cause discomfort.
  • If an outlier, the subsequent salary increases can be quite minimal and lead to frustration
  • If a lowlier, then you might take a couple of salary cycles to reach the comparable level to your peers, again leading to frustration.

So what should you do?

  • Try to find out if the company you are joining is a aggressive salary leader, or brings up the rear of the market.
  • Remember, less branded companies or businesses starting off operations who need to hunt for great talent end up being predatory in salaries. They are significantly higher than market medians. If you are interviewing with such companies, don't be shy.
  • Check what the company communicates in their cost to company. Are benefits included? How does that compare with your current salary? In short, compare apples to apples.
  • Find out how the variable component if any, gets paid out? What is defined as average performance? How does company performance impact the variable component? Has the company been doing well vis-a-vis the market? How much did high performers get?
  • Is there any premium for specific skills that you bring in?
  • What is the reward differential that top peformers get compared to the rest?
  • Do they offer stocks? Is that added in the cost to company? What is the lock-in period?

Some questions won't be answered by your recruiter. So get to know people who already work there!

All the best !