“They want to know my salary requirements, what should I say?” Ahh, how much pay to ask for!
This is a frantic text I sometimes get from clients and friends. I love getting this text.
Is it because I love stress and awkward situations? No! (Well I do kind of love awkward situations, but this isn’t a post about how I’m a weirdo.)
It’s because I love digging in and figuring out intricate problems with my friends and clients, and helping them EARN MONEY.
Also, when I’m not the one in the hot seat, it’s easier for me to pull back and look at the larger ecosystem my friend or client is operating in. That’s my biggest takeaway for you: This is a nuanced problem and there is no magic number.
But there are a few guidelines you can use to ensure you’re being more than fair to yourself and to your new employer. You can both feel happy and excited about the money being given and taken.
Did you hear me? You can both feel happy and excited about the money being given and taken.
That’s a real thing. It’s possible.
Companies and clients are often THRILLED to pay someone who does great work. And employees or contractors are often EQUALLY THRILLED to be getting paid good money, which, in turn, makes them work harder.
So let’s dive into the hardest question first.
Do I Need to Share My Current Salary with a Prospective Employer?
No. You do not. And for most of you, you really shouldn’t because this is how you can end up being underpaid in the long-run. If you’re on the high-earning end, it’s tricky for you too. You could price yourself right out of the market this way.
Potential employers ask this because it is an easy and accurate way to gauge whether they can afford you. There’s nothing inherently wrong with that. The problem is, what you currently make really has no bearing on what you will accept to do the job you are trying to move into. So if you don’t have a lot of context about the position and you give them your current number, you could be way undervaluing yourself, allowing them to get you for a bargain.
Or if you make a higher salary, there is a chance you could give them a number that isn’t in their budget, and they could reject you without even understanding if you’d be valuable enough for them to increase the pay.
Instead, your goal is to either get the planned salary range for the position out of them first, or to give them your “target pay range” for the position, and just sidestep discussing your current salary altogether, which is fine, because frankly, it’s not relevant.
At the very least, you want to put off talking numbers until you get to the interview stage and have more information about the position.
So how to do this? You do need to do it both delicately and directly. You want to be self-assured, without insulting them in any way. When a recruiter or HR person asks you for your current salary, you can do a few things:
- Do the research listed below first (before applying formally) and say “My target salary for a position of this level is in the range of X to Y.” This way you go straight to valuing the position at hand. You know what you need to make for this job, and if it doesn’t fit with their budget, you can at least feel good about parting ways before wasting everyone’s time.
- Say, “I’d rather not get too far into salary negotiation until I learn more about the position and whether I’d be of added value to the company.” Then follow right up with a pointed question like, “Can you tell me if I’d be managing a budget?”
- If they push, you can say, “Is there a set salary range for the position already planned, or are you looking for guidance on what the market rate looks like for someone like me?” If they say the latter, you can say, “I’m not sure my exact number with everything calculated in (alluding to a bonus structure…even if you don’t have one), but I’ll get back to you with it later today. This is such an important part of the discussion, I want to get it right.” Then do the research below and get them a target range you’d accept (like in example 1., instead of telling them your current salary).
What Should I Know Before a Salary Negotiation?
The right number will factor in a few things:
- What the market will bear (aka what the “going rate” is in the geographic location of the company or client)
- Where the company or client is, in the growth of their business (Are they a startup? Are they established?)
- How much experience you have/ how good of a fit you are
- What other perks come with the offer
Whether it’s a freelance rate or a full-time salary, all of these items should be considered ahead of time.
So why do I get so many frantic texts if people I work with do all this research ahead of time?
They want a gut-check.
Their brain sort of turns off for a second and they text almost reflexively. They get a pass for that. This is a big deal, especially when you consider how motivating money can be in your work life.
If you land on a number that excites you, it will energize your work, keep you engaged, and can start you on a path that leads to bigger and bigger success. If you land on a number you feel “stuck with,” you’ll probably feel stuck with that job too. Your performance will match your energy. This gets you on a downward spiral.
I’m not saying that money is everything, by any means, but it does (and should) have an impact on your attitude, whether you want it to or not.
Step 1: How to Do A Pay Rate Gut Check
That’s why the very first thing I suggest my friends and clients do is a “Gut Check.” Ask yourself:
- What number will make you excited to do this work, take on this job, and go way above and beyond your company or client’s expectations?
- What will motivate you to be excellent?
Depending on your type of work, this might be an hourly rate, or it might be a salary.
I find that even if you are negotiating a salary or project-based fee, estimating the hours you’ll work and doing the math to find the “hourly rate” will make the numbers conceptually easier to digest.
Is $50 per hour exciting to you? Is $100?
Just think about it first, and keep that number aside. Don’t ask anyone but yourself for this first step. We’ll calibrate it later. Remember that if it’s freelance work, it probably doesn’t come with the perks of stability, health insurance, or a 401K match. If you’re freelance, you may want to bump your hourly rate up at least 15% over what you’d want to make full time, to cover that theoretical gap.
Step 2: How to Research a Salary
Below is a list of four basic salary research sites you can use to determine a range for the position or type of work in your area. Try all four and see if your Gut Check number falls within the ranges given. These aren’t set in stone, but they can give you a sense of whether you are close to the “going rate.”
For freelancers, you can type “freelance” before any of your searches on the above sites. For writers and editors, Contently also has a great freelancer rates database.
Step 3: Get a Pay Rate Reality Check – Ask Someone Who Knows
Don’t worry. I’m not suggesting you ask a perfect stranger what they make.
Instead, take all your research—every range you determined from the sites above—to someone who has the type of job you want, has a similar job, works in that field, or (best of all) hires people who do the job you want.
Show them what you found and say, “Does this look about right to you? Where in this range would someone like me fit?”
And let the conversation fly. It is always easier to have an open payscale conversation with someone if you have outside research to point to. This takes the emotion out of it. No one has to reveal anything overtly, but they can if they want. It’s a way of creating a safe conversational space. Now they might be able to say. “Hmm, the range you found on LinkedIn is more realistic than what Salary.com has.” It’s much easier this way.
Step 4: Determine a Salary Range or Pay Range
By now you know:
- Your Gut Check number.
- The range of salaries or pay rates for your type of work in your area.
- The opinion of an expert in the field.
This is enough information. For the perfectionists among us (I know there are a lot of you on this site!), I’m giving you permission to stop obsessing. Pick a range.
Rule of thumb on your range: The more money you make, the larger your range can be.
For salary-seekers, keep the range within a $5K spread if you make 5 figures, and a $15K spread if you make low 6 figures. If you make so much money that $15K is not a big deal to you, I suspect you don’t really need this post, but I’ll tell you to go with a $25K spread.
For per-hour folks, you can provide an hourly rate rage as well. It’s a little harder for me to give you a rule but a $25 per hour spread is acceptable for many situations, such as, “I charge anywhere from $50 to $75 per hour” and add something like “depending on the complexity of the project” to the end. This leaves it open to a deeper conversation, which is usually good. Just like with salaries, the more you charge on average, the larger your ranges can be.
The bottom of your range should not actually be the absolute least you would do this work for. You never want to hit that number. The bottom of the range should be what you want, realistically. It is very likely more than you make today.
The top of the range is what you’d do a little dance about.
The middle of the range is probably what you’ll be offered. The person on the other side of the table is likely assuming you will settle for something in the middle of the range, unless they sweeten the lowest number with a perk like a hiring bonus, an extra week off, or a work-from-home arrangement.
Keep a perk like that in your mind as a possible “make good” if this happens. For some of us, extra flexibility is worth a slightly lower pay rate.
Step 5: If They Come in Low, Ask For Wiggle Room
Someone recently asked me if the hiring manager at her new job would “hate her” if she asked for more than the initial offer, which was on the low end of her range. My answer: She’ll hate you if you don’t negotiate! Truthfully, it is expected.
If the company says they can’t budge on pay, have one other type of request in mind. Ideas include:
- A company-paid class or training.
- Flexibility of time or location.
- Additional paid time off.
- Travel reimbursement.
- Cell phone reimbursement.
- A salary reassessment in 6 months.
I know this is a lot but it is VERY IMPORTANT. It’s also the most efficient way to make money as an employee.
Think about it this way. If you spend:
- 1 hour researching on your own
- 45 minutes with an expert asking questions
- 15 minutes on the phone with your hiring manager asking if there’s any “wiggle room in the budget”
You could stand to make thousands more dollars, for less than two hours of work.
Good luck and please reach out to me if you don’t feel you have anyone to talk to about the acceptable ranges in your field! One prep session could make you thousands of dollars.