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Tuesday, November 2, 2010
Salary Negotiations: Playing Poker with Your Financial Future
But what if an employer directly asks you to tell them how much money you made in your previous positions?
Um… excuse me?
Chances are you’ve had this happen before. This request is an all-too-often ploy used by many employers to try to force job seekers’ hands into showing their salary ‘cards’ and effectively sweeping any negotiation power out of the candidate’s hand. Many unemployed people are so desperate that they cave in right away for fear that they might not get the job if they don’t ‘play nice’ in the employer’s cat and mouse game of salary negotiation.
Have you experienced this at some point in your career? Then you know the drill. You are in the hot seat for an interview, things are getting towards a definite ‘close’ and it is clear that a deal is now in the works.
Then the employer drops their bomb in an interview by casually asking, “So, what are your salary needs?” or “What are you earning currently?” or, in the application process, they require you to state your salary history or requirements in your cover letter.
So, it all comes down to this moment. Time to deal the cards and start playing strategically… what you do now completely impacts your financial earnings over the course of your entire career.
So what is a job applicant to do? What are your options?
Here are five approaches you can take when it comes down to handling the thorny issue of salary negotiation. There isn’t any ‘perfect’ way to negotiate because each situation is subjective to the company culture and the person interviewing you / making the hiring decision. But being educated about your options and also having a good ‘read’ on the internal company environment can help provide you with the necessary business intelligence on the best way to approach this discussion.
1) Give them what they want. Know when the chips are down and the employer is fixated on a specific answer to the salary question. If the job opportunity truly hinges on whether you give them an answer to this question, then you have to make the decision whether to divulge your salary to give them what they want or not. The obvious downside to providing that specific number is that now you have absolutely no negotiating room whatsoever. The company knows exactly what they can ‘get’ you for, salary-wise, and it will be very difficult to go upwards at this point. Let’s face it: most employers aren’t going to pay you a higher amount out of the sheer goodness of their hearts. Their strategy is to hire the best asset to the company for the best price possible.
2) Provide a range. Do your research on what is a reasonable expectation for salary for the type of position for which you are applying. Then make your move by providing a similar range, with your current salary level somewhere inside that bracket. Depending on what you are willing to accept (even if it is below your most recent earning level) , make sure the upper number isn’t in outer orbit… otherwise you can quickly get tossed out because of a too-high salary requirement.
5) Avoid the issue. This is a tactic some people take because A) They don’t really know how to handle it or B) They assume that by avoiding it, the employer won't not notice that the applicant didn’t address the question. All of which can completely and utterly backfire. Salary numbers are absolutely going to be a hot button for an employer, and they’ll be specifically scanning for that reference mentioning your salary history in the cover letter.
The most successful tricks to negotiating your salary is being flexible, willing to negotiate on other options including benefits, having a good knowledge of what jobs of this type typically pay, and being centered on what your value is without being overconfident.
In the long run, if you take a positive, collaborative approach in negotiating your salary, chances are that the employer will respond positively, and you’ll be happier because you kept your cards close to your chest while keeping up your poker face. It could mean a substantial long-term gain in overall career earnings if you are smart and savvy about how you negotiate your next salary.