Salary Negotiations Shouldn't be a Mexican Standoff

Salary negotiations shouldn't be a process where you try to outsmart your interviewer to disclose their compensation budget before you tell them your expectations. Instead, do your due diligence and ask your recruiting consultant for assistance. We are here to help you prepare as well as negotiate for you.

In order to understand why you should use recruiters to negotiate a better compensation package (there is an important difference between a higher salary and a better compensation package. A compensation package is not only about salaries, it also covers bonuses, commissions, stock options, house allowances, paid leave, sick leave, flexible working time, remote working etc) we need to demystify two things:

How is compensation negotiated with your potential employer
How job seekers see the role of recruiters vs the actual role of a recruiter

How is Compensation Negotiated

First let’s attack the widely accepted opinion of how a compensation negotiation should be executed. Many of you have probably read articles or guidelines about how to negotiate salaries and many of those articles state something like:

"You should never reveal your desired number, but hear the other side's proposal first."
This negotiation tactic is recommended so that you don't rule yourself out with an expectation above budget or undersell yourself just to get a job. In reality, this only results in an awkward conversation where you are trying to wiggle your way out and elicit some numbers from your counterpart in an interview, but it will not help you get a better salary.

"Let's speak about the compensation towards the end of the interview once we determine if I am a good candidate for your company and if this company is a good working environment for me."
Compensation is one of the most important elements of every job search, thus it shouldn't be mentioned for the first time at the end of an interview process.
“Don't think about the salary but rather think about if that job is good for your career."
(This last one is only applicable if you are a new grad and looking for your first job, but yet again if you're an experienced professional you know that salary is an important determining factor for your career). For some employers a salary way below market standard is a yellow flag because it might indicate that the candidate is either a bad negotiator or not good at their job.

I’m sorry to say this, but all of the three recommendations above are crap for the following reasons.

They show you don’t know your own monetary value in the market
It reveals you didn't do proper market research and compared compensations of similar positions within other companies
You might waste a tremendous amount of time going through five, six or even more interviews just to get an offer that is too low to accept
Not knowing what kind of compensation you should expect has a negative impact on your negotiation position, because you don't have a reference point

The Solution

From my experience, the best approach to salary negotiations is to do your own due diligence and cross reference it by talking to recruiters. Research what your position’s market value is (there is an abundance of salary reports out there) and compare it to you.

Also speak to professionals like recruiters and ask them what the average salary for your experience is. Speaking to several recruiters will save you a lot of time and by cross referencing it with your own research it will help you get more accurate information.

Feel free to ask them what salary increase you should expect when changing jobs as well. Now that you know your market value and expected salary increase, it will be easier to come up with your desired salary.

Instead of doing the Spaghetti Western standoff with your potential employer ( by trying to trick them into telling you the budget first), you should come prepared to an interview and have a clear answer to the following three questions:

“What is my market value?”

“What do I want to get out of this opportunity?”

“What am I willing to compromise on?”

Again, a good recruiter should be able to help you with all of these questions.

Another thing that you should be aware of before going to an interview is that companies often have a predetermined budget. However, there are cases where they can increase it if a person they want to hire is worth it. Consequently one would ask "How is my value determined?".

Value Determining Factors

Your current compensation package (starting reference point)
Your presentation (the most subjective element)
Average salary market value for the same position (it can show ranges)
Your salary expectation (shows if you are realistic or not)
Your previous achievements (indicator of future success)
Supply & demand for your skill set (higher demand = higher compensation, it is simple as that!)

So when you are asked during an interview "What is your salary expectation?", you should mention your realistic salary expectation based on your previous research. That expectation should be a combination of above factors. Try to set their expectation from the beginning, not at the end. If you think your expectations might be beyond their budget, ask them directly and mention that you are willing to discuss further and see if there is a possibility to come to a mutually beneficial agreement.

The Role of the Recruiter

The next natural question that imposes itself is the role of the recruiter in this process. Well, it is our job to negotiate compensation packages, we can do that for you. Also we know market values, demand for your skills, our clients’ budgets, how realistic your expectation is, how realistic the budgets of our clients are, what is needed to succeed in an interview etc.

We can act as a buffer between you and your potential employer, ask sensitive questions that might be uncomfortable for you to ask. We can help you prepare for the interview as well as for salary negotiations, as we know what the interviewer might ask you. Simply, we are enabling you to be the best version of yourself in an interview process.

Finally, many of you might not know this but job seekers and recruiters are naturally aligned. Recruitment agencies generally receive a fee only upon successfully placing someone into the job, and that fee is most often based on the accepted salary. Our job is to negotiate a salary that you are happy with and that creates a win/win scenario with your future employer. That often involves some give and take on both sides. Being clear about your expectations and value throughout the process will help avoid a lose/lose showdown at the end.

This is one of the 4 reasons you should work with a recruiter to find your next job.

Here are the other three: