Salary Negotiations Blog Series: Salary Positioning

Salary Negotiations Blog Series: Salary PositioningAlmost everyone I work with in my role as a Career Coach is unsure about how to handle the tricky topic of salary in a job interview. What do you say when an employer asks about your salary expectations? How do you negotiate the best deal? How do you begin to know what to ask for?

In my experience, very few people are able to successfully navigate the important matter of salary when speaking with a potential employer without doing some necessary homework first.

Through a three-part blog post series—this being the first—I am going to help make sure you negotiate yourself a salary that will pay you what you need… and then some. This process starts with determining what your preferred salary range is before you sit down with a potential employer.

Coming up with a salary range is a four-step process:

Warning: Nobody likes step one because most people don’t like seeing what they’re really spending money on! But it must be done. Let’s forge on.

Step 1. Pinpoint your must-have salary range. If you don’t already have a budget in place and you’re not sure exactly what you spend every month on your bills, you must do some homework. Go through at least three months’ worth of bank/account statements and add up all your bills. Insurance, groceries, utilities, gas, loan payments … add it all up ~ this is the number you must make to pay all your bills. You don’t need to share this number with anyone; you’re doing this exercise for your information only. Make sure you factor in your monthly, quarterly, and annual expenses. The number you come up with that you spend every year is the minimum amount of money you must make: this is your must-have salary range.

Step 2. Figure out what your lifestyle costs. The next step is to determine your want-to-have salary range. This is optional lifestyle stuff. How much money do you want to save? How much do you want to put into your 401k? How much would you like to spend on Christmas and birthday presents, on vacations, etc. How much does your lifestyle cost you? Add it up and find out.

Step 3. Determine your desired salary range. When you add your must-have salary range and your want-to-have salary range together, you have your desired salary range. This is the bottom number you should ever accept in salary negotiations. Preferably you never mention this number in your interview … something I’ll get to in my next post. The important thing is to never ever take a salary below your desired salary range because if you do, you’ll sacrifice something. You don’t want to sacrifice on long-term savings or on the things that bring you pleasure in life, for example. Do the homework ahead of time so you’re very clear on what you need, what you want, and your negotiation bottom line.

Step 4. Create negotiations space. You create negotiation space by adding 10-30% on top of your desired salary range ~ this is your negotiations salary range because it gives you some breathing room in a salary negotiation.

Two recommendations on where in that range you should be:

  • If you’re skilled at and comfortable with negotiations, which most people are not, and you have a strong achievement history and the right stuff for the job, it makes sense to go for the high end of 20-30%.
  • If you’re not as experienced, have a less-than-stellar achievement record, or lack one or more key qualifications for the job, be more conservative and aim for 10-15%. I wouldn’t go lower than that though, because if you do, you’re risking your desired salary range.

An old adage says that he or she who mentions money first in a negotiation loses. You’re engaging in salary positioning so you don’t have to reveal your negotiations position first.

In my next post, I’ll walk you through how to go about not mentioning what you want while making sure that you achieve it in your next salary negotiation. But before you do that, you must know what you need to earn and what you’re prepared to negotiate to get it.

You might also want to start now to think about what you want to negotiate in your next position. Check out this list of 32 items you can negotiate that I recently published.