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Question: How do you respond to the question of salary in an interview? This is one question I have heard this and that about, and I am eager to have clarification on it!

Answer: Salary discussions are very consequential, and the results have the potential to affect one's livelihood for years to come. Whether the difference in a salary offer is a few hundred dollars or a few thousand dollars, it compounds over time and grows in size the longer one stays with an organization. Therefore, negotiating your best offer is especially important -- and the foundation of good negotiations is good information.

To obtain accurate information, job applicants should plan ahead. An earlier post offered candid advice and a 'how-to' guide for gathering useful information about potential salary offers. The article is aptly titled, "Start Your Salary Negotiating Process Before You Start Your Job Search." Do not allow yourself to be caught off guard in the future when the topic of compensation arises in an interview or a meeting with a hiring manager. To start, researching municipal or state laws may inform you of specific requirements or prohibitions regarding what employer can and cannot ask candidates. I'll discuss the topic of pay transparency further in an upcoming post. Beyond the legal aspects, knowing the prevailing wages offered in the market and how your skills stack up against others will position you for negotiation success.

The post, "How Can I Estimate the Pay for a Position When It Is Not Listed?," is a concise treatise on the subject. It will give you a full appreciation for the salary variables that typically come into play, as well as how they are determined at most organizations in the private and public sectors. So, when asked about your salary history or salary expectations, you will be equipped with accurate information to answer intelligently and, more importantly, accurately.

A general rule of thumb for such negotiations is not to offer a specific number, as one's goal is most often to maximize the salary offer. It would be self-defeating to say that your salary expectation is $72,000 when the organization was expecting to offer you $79,000. With this information, the hiring manager might offer you $75,000, which would be to your delight. However, the $4,000 difference, compounded over an extended period, is quite significant, especially when considering its impact on merit increases and how it serves as a multiplier in benefits such as life insurance rates, retirement contributions, and leave payouts.

Indicating that you are most interested in the position and the organization, and that the salary is not your primary motivation, is a smart answer. However, avoiding the subject is not always possible; thus, if pressed, one might be tacitly compelled to state how much one is willing to take for a plum assignment. In this case, offering a range is a better idea than a single number. While my human resources colleagues may not want me to reveal trade secrets, I would suggest your range start at your target salary goal. If the hiring manager cannot pay what you expect, they will likely say so immediately, given that they put you on the spot. If there is room for negotiation within the range you provided, you will be well-positioned. In either case, knowing the market and your target number before the conversation is the best advice.

It would be imprudent to provide advice on salary discussions without noting that there are two other equally important variables to consider -- benefits and perquisites. While perquisites are not usually financial in nature, the value of benefits is an essential part of one's total compensation. When determining one's target compensation, it would be equally wise to research the organization's benefits, if available, to assess how their policies and offerings enhance or diminish the salary offer. For example, an organization might offer a 5% versus a 10% retirement match, there may be a $150 difference in the cost of healthcare premiums, and one organization may offer a generous tuition reimbursement program, while the other does not. If information about benefits is not available, the opportune time to discuss them is during a salary conversation. In some organizations, certain benefits and perquisites can be adjusted to 'sweeten the pot,' such as offering you a one-time allotment of additional vacation leave at the time of hire, a starting bonus, or even a more favorable parking arrangement.

Before accepting a job interview, it's essential to start your salary negotiations by researching to gather as much information as possible about the average market salary for positions like the ones for which you are applying. In addition to providing accurate information for salary discussions, it will also give you confidence in your negotiating position. Both articles referenced above remind the reader that knowing where they should naturally be placed within the range, given their skills and experience, is another key factor to consider. A professional with five years of experience cannot typically command the same salary as one with 15 years of experience. In all cases, entering the discussion with as much information and forethought as possible helps ensure a fruitful conversation.

Listen to the accompanying podcast episode below, where Chris Lee discusses this topic in greater depth.

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