The Interview Edge

Salary History – Why Do They Ask?

There are two parts to this answer. Let’s begin with the hiring company:

The prospective employer wants to know what you’re currently earning so they can get a feel for what kind of salary you may be expecting. Can they afford to hire you? Should they even talk to you?

Of course, once they know your current salary, that information can work against you.

If you’re earning more than the range or you're at the high end of the range, they’re likely to remove you from consideration…even though you may be willing to take a cut in pay. Conversely, if your salary is low compared to the range, that can also kill your chances as they may assume you’re under-qualified.

What Will the Recession Do To Your Compensation?

Surprisingly, not much (at least for now) – as long as you can hang onto your job.

According to a study released last week by New York-based consulting firm Mercer LLC, the majority of companies they surveyed indicated their budgeted salary projections for 2009 are unchanged. The 190 mid-size to large firms expected in aggregate to boost salaries by an average of 3.6% next year.

That report mirrors other studies showing projected increases of 3.5% and 3.4% (Hewitt Associates Inc. and Wyatt Worldwide, Inc. respectively).

While the numbers are down from last spring, it’s only slightly – by tenths of a percentage point.

Negotiating Compensation - Know Your Market Value

You’ve successfully navigated your way through the interviewing process and received a formal job offer. Congratulations!

Unfortunately, though, this is the point where far too many candidates make mistakes that cost them the job in the end. Too often, people are unrealistic about their market value or unclear about what the market will bear.

(Note: you should get into the habit of doing some basic homework regarding market rate before even beginning the interviewing process)

The key to successful negotiation is to be informed and to know what you’re worth. Not what you’d like to earn…but what the market is actually paying for similar positions in your part of the country.

Before you enter into this discussion, you need to know the following:

-What’s the market rate for the position in question: low end, midpoint, and high end?
-Where does your current compensation fall in relation to the market rate?
-Does the company urgently need to fill the position?
-How long has the job been vacant?
-How specialized or rare are your skills?
-What is the company’s staffing budget?
-Assessment of the hiring company (i.e. profitability, where it is in the business cycle)

With this information in hand, you will have established the foundation necessary to begin the conversation and make this a win-win negotiation for you and your new employer.