Negotiating Salary? Be Transparent & Know Your Needs

You’ve been told that you are going to get the job offer.  You think to yourself, “I should be after the three weeks and the 15 interviews I have gone through.” But before the offer can be delivered the recruiter says that she just wants to get a few pieces of information so that they can make you a job offer that you can accept on the spot when the hiring manager calls tomorrow.

“That sounds great,” you say.  “Almost there”, you think, “Just don’t let me blow this now.”

The recruiter asks, “How much was your salary at your last job and what are you expecting in this position?”

You freeze.  “Oh no, what do I say now?”  Your heart pounds so loud that you think they must be able to hear it on the other end of the phone. All of a sudden your conscience says to you loud and clear, “Tell it like it was, and tell the truth!”  But that other little guy on the other shoulder whispers in a voice that is only your own, “Inflate it by ten thousand dollars, they are only going to negotiate you down to where you were before anyway.”

The pause seems like an eternity, until the recruiter says, “Are you still there?”

This is the moment of truth and you will be forever judged by the recruiter by what you do at this moment.  Your choices are to tell the truth and take the chance that you are underselling yourself. Or to inflate, not tell the truth and if found out in a reference check, either don’t get the job after all, or have the recruiter always remember that you didn’t tell it like it was.

Here’s what you need to know: you need to tell the truth. So many people don’t that the recruiter comes with the assumption that you are inflating the truth anyway.  How many times have I been told, “Well, I make XXX dollars a year, but I am up for an increase next month where I am expecting an increase of X%, which is the highest that we give at my level.”  I am consistently amazed at my timing to recruit people who are all one month away from their next pay increase.

I am advocating today, here and now, that the truth and nothing but the truth, will win out every time.

Secondly, I am advocating that transparent, needs-based salary negotiations are the way to go. Needs-based salary is another way of saying the monetary amount you need to make ends meet – if you end up taking a job that pays less than what you need, you will have a bigger problem coming soon. One thing we all can agree on is that we have baseline needs to satisfy the bottom of Maslow’s hierarchy. Plus, you don’t really know what the company can afford as you don’t know if the job posting salary was a target, the top of the range or the bottom of the range.  (You can better be informed of course today more than ever by looking at the thousands of salary reports on Glassdoor.com).  But since there is still a bit of guessing going on, it’s best to lead with: “Here is what I need and why.”

I once had a person who I was trying to hire who desperately wanted the job, but the fact of the matter was that the salary we could afford to offer was going to be ludicrous given that he and his wife would need to move their five kids from Texas to California and keep any semblance of their current lifestyle. He wanted the job so badly that he was considering buying a 2-bedroom home to start.  I don’t have kids but even I knew that 5 kids and two adults in two bedrooms were just not going to work.  After evaluating his needs together, we both came to the conclusion that this wasn’t a good move for him. However, on the other hand, there have been many a situation where I have moved the salary up to accommodate real needs that are unique and personal that I never would have known had the person not been open and honest about their situation.

Bottom line is that there is always a bottom line and in this time of uncertainty, changing rules and shifting expectations, opening up “your books” and telling it like it is creates more of an opportunity for dialogue and finding more common ground than not.

Try it. What do you really have to lose?

Guest Blogger Rusty Rueff is on several corporate and philanthropic Boards, and is a recognized career and workplace expert, consultant and writer, as well as start-up company advisor and investor. Rusty most recently completed the successful 16-month leadership role as Coordinating National Co-Chair for Technology for Obama (T4O) for the reelection of President Obama. He currently serves on the corporate Boards of Glassdoor, HireVue.com, Rethink Books and runcoach. Rusty was the CEO of SNOCAP from 2005 through the successful sale of the company to imeem, Inc. in April 2008. Prior, he led Human Resources departments at both Electronic Arts (EA) and PepsiCo companies. Rusty is also the co-author of “Talent Force: A New Manifesto for the Human Side of Business”, (Prentice-Hall. 2006). In addition, he is the Chairman of The GRAMMY Foundation, and President of the Board of Trustees of the American Conservatory Theater. He holds a master's in counseling, and a bachelor's in radio and television from Purdue University.

  • Richard

    Good piece and good advice!
    The tack that I take is to give my actual (or previous) salary honestly and, depending on my situation (still employed or not), tell the recruiter that “this is what I have now”. Negotiations about my projected value to the company can then be done in earnest and decide whether they can match or want to up it.

    Has worked for me for over 20 years and about 6 (senior) positions.

  • lizryan

    Why do we need to answer the question at all? It's an inappropriate question. Do we applicants get to ask the interviewer “What were you paying the last person in the job?” When someone asks “What were you earning in your last job?” can't we say “I'm focusing on jobs in the $75K range.”? What we earned before is none of their business imho. Transparency cuts two ways. If corporations are going to show you the internal pay scales and actual salaries, then the equilibrium shifts. Until then, all they need is your target salary.

  • rustyrueff

    Liz Ryan’s POV is a good one….but it is important that we understand who is the buyer and who is the seller right now. While the question from the recruiter may be inappropriate, in today’s market, I would not suggest that the question be skirted or not answered. Unfortunately, Talent is not in the power-seat right now and there must be different strategies for different times. In this time, I would suggest that the question be answered in the most transparent and forthright way to alleviate any questions in the mind of the hiring authority. Not answering the question, or not being ready to answer the question, can create the chance that the hiring manager or recruiter thinks something is being hidden. In this market, leaving something up to chance is not a good idea.

  • lizryan

    Rusty my brother, I couldn't disagree with you more. The job-seeker is no more the seller than the employer is. It's just that attitude (“I have to kowtow, because I have no juice”) that has given so many HR folks and hiring managers the distorted, World Revolves Around Me view they have. Good salespeople don't answer every insulting question a buyer may ask them. Talent IS in the power seat right now — it's BODIES that are not in the power seat. I can't see how you would counsel job-seekers to be transparent while accepting the “fact” that hiring managers and HR people can keep their info to themselves.

  • http://LeanStartups.com Apolinaras Sinkevicius

    Rusty,
    This is one of the most one-sided BS articles I have read so far on Glassdoor. Liz is absolutely right – transparency IS a two-way street. Your “logic” reeks more than a bathroom at a chily cook-off! Your example of gentleman from Texas is a perfect case why companies get sued. Sorry to burst your bubble there, but unless you are recruiting for ditch-diggers, good talent is hard to come by.
    And whatever happened to what VALUE does the candidate bring to the company? It is none of your business if a candidate has one kid, none, or 7 wives 100 kids and a harem to support or how a previous organization may have valued their contributions. If you think it is fair to poke your nose into such matters, next time you ask such questions present your last 3 years worth of tax returns to even up the fairness there. Enough using the BS excuse of the economy.

  • jimmychuck

    Rusty,

    Does this advice also apply to people who are at the point in their careers where their next logical step is to breakthrough to the executive level? Should I “be honest” and tell recruiters my “needs-based” salary requirements based on what's required to make ends meet? Is that how CxO's salaries are negotiated? If not, what advice can you give on how to set your salary requirements at the executive level.

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