What Salary Should You Ask For? Tips for Evaluating Your Worth
It’s a subject that’s at the top of your mind when you’re applying for a new job, and yet it’s probably also one you’re not looking forward to being asked about during the interview process: your salary expectations.
Requesting the “right” amount of money is one of the things that will affect whether you receive an offer, and it will also play a big role in whether you feel satisfied with the job. So, it’s important to name a number feasible for you and your prospective employer.
We’ll explain how to determine what salary to ask for and share some tips for a smooth and successful money conversation.
Why it’s important to know your worth
While money isn’t the only thing determining employee satisfaction, it is a leading factor for most candidates. A job that’s challenging and sometimes stressful–as is the case with many positions–will feel a whole lot more tolerable if you feel you’re being fairly compensated.
Money also plays into your overall well-being, both in and outside of work. If you can easily cover your monthly bills and have a little (or a lot) left over, you’ll feel less anxiety than if you’re nervously counting every penny until your next paycheck.
Knowing your worth also determines your earnings, not just for one position but for the entirety of your career. If you learn to negotiate early on, you’ll be in a much better position to secure increasingly higher salaries as you advance in job title and responsibility level.
Thus, it’s crucial to walk into a money conversation armed with the knowledge you need to land the salary you deserve. These talks usually unfold in one of two ways.
Scenario 1: The company makes an offer first
In the best-case scenario, the company will explicitly tell you how much the job pays or offer a salary range.
In the past, this wasn’t the norm, but it’s becoming more common as workers call for pay equity and salary transparency. This is a great thing because it creates a level playing field from the start and allows candidates to opt into or out of the hiring process based on whether the salary aligns with their needs.
If the company makes an offer first, it’s up to you to decide whether to accept it immediately or ask for more. Bear in mind that an employer’s first offer is rarely their best one (public sector jobs are an exception to this rule), so it’s often worth it to at least try to negotiate.
Scenario 2: You’re asked what salary you want
The second scenario, and the more likely one, is that you’ll be asked a question like ‘What are your salary expectations?’ during the interview process. Ideally, you want to get the company to name a number first–we’ll talk more about the reasons for this a little later on–so you’ll need to be skillful in answering this question.
Your first option is to try to sidestep the topic, delaying the conversation until a later point. Here’s an example:
“I’m very interested in the position and feel confident in my qualifications, but I’d like a chance to [talk with the hiring manager/finish the interview process/learn more about your benefits] before naming a salary.”
You can also turn the question back on the interviewer, like so:
“Based on my research, I feel confident we’ll likely be on the same page with salary, but I was hoping to hear from you first. Do you have a range in mind for the position?”
If you’re lucky, the interviewer will acquiesce and move on to a different subject or give you a salary range. If they push you further, though, you’ll need to be prepared to name your price. Here are some tips to help you decide what that price should be.
Steps to determine your salary expectations
1. Research the market
The best way to optimize your salary request is to research the market rate for similar positions.
Our salary database and sites like Payscale, Glassdoor, and Salary.com are a good starting point to gather information. You can also post a thread on a forum like Reddit asking people with your desired job title to share their salary information.
Your research should take into consideration:
- Job title. Research the exact title, as well as alternate titles and adjacent roles
- Experience level. Salary ranges will be very different for an entry-level candidate versus someone with ten years of experience
- Location. A city with a higher cost of living is going to have salaries, on average, than a rural low-cost-of-living area
- Industry. Pay attention to what’s going on in your field, like job growth and innovation, which can impact salaries
Based on your research, you should develop a high-end and low-end number that can help you zero in on a reasonable range for this particular position.
2. Determine your needs
Next, figure out how much money you actually need to live each month. If you already have a monthly budget, this part is easy.
If you don’t have a budget, list every bill you pay regularly. This should include your mortgage/rent, utilities, groceries, gas/transportation, childcare, insurance, savings, and discretionary spending like dining and entertainment. Add these items up, and you’ll know roughly how much you need to make at a minimum, after taxes, each month (a tool like this paycheck calculator can help you determine how taxes will affect your take-home pay).
Don’t neglect this step, especially if you’re new to the workforce! A salary can seem like a huge number when it’s presented as an annual amount, but you might come to find out that your actual bi-weekly paycheck isn’t nearly as impressive. The last thing you want is to accept a position and find out later that you can’t cover your rent.
3. Consider other forms of compensation
Salary may be the most significant component of a compensation package, but it’s not the only one. Other benefits like insurance coverage, retirement contributions, commuter benefits, and paid time off also affect how much cash is left in your monthly bank account.
For example, let’s say your prospective employer is pretty average regarding its salaries. However, if you find out that the company also offers a 401(k) employer match of up to 6%–which means the company will match whatever you put into your retirement account up to 6% of your salary–this is a great offer. It’s essentially free money that will accelerate your retirement savings and could offset a lower base salary.
Be sure to find out about these additional forms of compensation and factor them into your salary requirements.
4. Prepare talking points
Your salary conversation will go more smoothly if you plan what you want to say in advance. In addition to naming a number, be prepared to explain your reasons for arriving at that amount. Here’s an example:
“Based on my understanding of the job requirements and the results I’ve achieved for my previous employers, I’m looking for a salary between X and Y.”
Additional tips for salary negotiations
Try not to be first to name a price
Even if you’ve done your homework and feel confident, you’re asking for a reasonable salary; naming a number before the employer does removes much of your bargaining power. For example, let’s say the company has a range of $75,000 to $85,000 in its budget, but you come in with an initial ask of $70,000. It will be very hard to justify asking for even the minimum of $75,000 because you’ve already stated that $70,000 is acceptable to you.
If the hiring manager presses you to state your salary requirements, the best thing you can do is to give a range that surrounds the actual number you want. This allows you to negotiate to the upper end of the range if you receive an offer.
Negotiate within reason
Some people advocate for negotiating salary no matter what, but this isn’t always in your best interest. You don’t want to appear greedy, and if the company’s initial offer is already very impressive, you could hurt your chances if you come back asking for even more.
If you do decide to negotiate, suggesting a salary that’s between 5 and 10% higher than their initial offer is usually reasonable. 5% more is a good ask if you’re uncertain, while 10% is reasonable if you’re confident your qualifications put you at the top of the pack of applicants.
Leverage all the available information
In addition to your market research, use the other information and context clues you’ve picked up during the interview process to inform your salary request. For example, did they tell you you were their top choice? If so, this could give you more leverage versus if you know there are two other finalists still in the running.
The same goes for negative indicators like if the company is experiencing a sales slump or the market has recently taken a downturn. If this is the case, you should lower your expectations accordingly.
We’re here to help you land the salary you deserve and expand your lifetime earnings. Use our salary database to find average salaries for hundreds of positions and view our guide to negotiating your salary for additional tips to negotiate pay like a pro.
