By Laura Schneider
When you are interviewing for a new job, it is common practice for the company to ask you about your salary history. I typically want to know what the candidate’s base salary is, if they receive any bonus, the average bonus amount, and any additional compensation or perks, such as 401k matching, stock grants or stock options, paid time off and how much they are required to pay towards their medical premiums. If you are expecting any further compensation, such as a sign on bonus, relocation assistance or green-card sponsorship as part of your decision to switch jobs, then that is something the company should know about up front.
I am always impressed when candidates discuss compensation with me in a calm and forthright way. When a candidate tells me they are “open and sure that the offer you make will be sufficient” or when they tell me they are looking for “the market range” – it indicates that they are not comfortable discussing compensation.
The fears that candidates bring to compensation discussions are usually a result of feeling that they may price themselves too low, and therefore miss out on receiving a big increase over their current compensation, or they are afraid of pricing themselves too high and then having the company turn around and say “we can’t afford you”.
So, what is the best way to answer questions about compensation?
First of all, I would recommend that you do your homework. Do some salary research to find out detailed information about what the market is paying for your skills and background. You may want to check out Glass Door to see if any specific compensation information is available for the company you are interviewing with.
Secondly, very importantly, be honest. Above all else, don’t make up the numbers. Give an accurate portrayal of your current compensation. If you are worried about you pay being too low compared to the market, say so. “I am currently making $xyz but feel this is low compared to others with my background. Going forward I will be looking for annual compensation in the $abc range”. If you are worried that your compensation is on the high side, you can let the employer know that the opportunity is as important to you as compensation. Saying “I currently make $$$ but am flexible on my compensation requirements, depending on the position and the opportunity for career growth” tells the employer that you are not “stuck” on making a particular amount.
Why don’t employers just tell us what the range is for the position? This is a question I get quite often. The answer really depends on the company. For many of the companies I have recruited for, the position is opened at a particular level, but there is a huge amount of flexibility depending on what candidate we end up finding, as well as how that candidate compares to other team members. We may open a position up with an expected base salary of, say, $100,000, and then find that our best candidate only has 3 years of experience and, compared to others in the team, should really only be making $80,000. There is also some psychology behind not giving a range out to candidates. If I tell you the range we expect to pay is $60,000 to $90,000, you are probably going to think you will be a $90,000 candidate, when the reality may be that we see you as a $65,000 candidate (again, compared to others on the team). Then you may feel insulted or disappointed because your expectations were not set appropriately.
What about salary requirements or salary history letters? Some companies may still ask that you write out your salary history, or put your salary requirements in writing. Again, I caution to be honest in your answers. It is very easy to verify past compensation and falsifying information can be grounds for rescinding an offer or terminating your employment (if hired).