This past weekend on my Blog Talk Radio Show, I discussed How to calculate your asking salary even before you have your first interview. The salary question is often an uncomfortable subject (among many) during the interview. We often breeze over this subject by throwing out a best guess number. The goal of this post and this past weekend’s show is to help job seekers avoid asking for the wrong salary – too much and the offer could be lost, too little and you’re back in the job search in six months (or kicking yourself with the first paycheck). In case you missed the show, listen here, “How to calculate asking salary”
Step 1 – Prepare a household budget
In Episode 7 I covered how to prepare budget – to give an idea of how much you need to make to cover the bills
Step 2 – Create a job search plan
A good job search starts with a plan so you identify the job you want. You should target jobs to help you move ahead in your career. Once you know what job you want, now you can formulate a target salary. Go to www.salary.com to see the average salary range for the position you want to land.
Step 3 – Calculate your asking salary
Ex. Project Manager I (Charlotte, NC)
- Budget Salary = $55K
- Add 10K to your budgeted salary = 65k is your target salary
Note: adding 10K leaves room for negotiation
- Position range: $50k – $88k (www.salary.com)
- $65 – $75 Asking Range. After negotiation you could end up at 70K
Think like a hiring manager: 65 -75k is reasonable because you are 3-4 merit increases away from being at the top of the salary range. Thus, you are in range for the position. When negotiating, keep in mind that managers want to reward you for performing well while in the position. If you come in at the top of the salary range, there is nowhere for them to go when it comes time for merit increases or bonuses.
The goal here is not to get rich on your employer or even come in at top salary; the goal is to achieve the budget for your lifestyle and well within the employer’s budget creating a win-win for both of you. -Holly Bunn
Key tip: When formulating a target salary, focus on the salary of the position you want not a % of your current/last salary to increase.
Step 3a – Calculate your asking Hourly Salary
Ex. Project Manager I (Charlotte, NC)
- Budget $22/ hour
- Add $5/hour to budget rate = $27/hour target rate
- Position range $25 – $42 (www.salary.com)
- $27 – $35 Asking range. After negotiation you could end up at $32/hour
Additional Calculations to Consider
Now that you have your base salary, be sure you consider other expenses and adjust your asking salary to reflect the impact to your household budget.
- Location/Commute (moving state to state or telecommute to office)
- Benefits (premiums can significantly increase from job to job)
- Childcare (longer commute, you may require extra childcare, etc.)
- Expenses (many companies are BYOC – Bring your own credit card for expenses. Keep that in mind if you are asked to travel)
Key Tip: Think about these things before the interview not when you get to the interview. Ask your recruiter for a copy of benefits costs (medical, dental deductions, etc), expense reimbursement policy. When you start your job it’s too late to find out if these policies have a negative impact to your budget.
Note: Everyone’s financial situation is different. It’s always a good idea to consult your tax advisor or accountant when calculating your asking salary and developing a budget.
When to Talk Salary
During the offer stage.
Rule of thumb: don’t bring up until your interviewer asks. And always give a range, not a hard and fast number.
When NOT to talk salary
- During the first phone interview – you need more information about the job. Telling a recruiter that you need more time is not a fake out. It’s the truth. You will know more once you talk to your hiring manager about your responsibilities. It is then you have a better picture of the type of salary you are worth. Try not to lock yourself into a salary during the first interview.
- When asked, “What is your current salary?” – try not to answer this question without a job offer – verifying your current salary is a part of a background check.
How to answer: First, try to respectfully deflect by asking for the budget or salary range for the position. Second, express that your current salary does not reflect the intended position. It’s a different position and different salary so not really that relevant. Finally, if demanded, give a range for the salary you are looking for based on the information you have right now with a reserved right to change that amount after the interview process is over.
Key Tip – Always provide a salary range, but have a bottom line number in your head. Only provide a range to an employer if you have prepared as described in this post so you don’t end up with the wrong salary for your lifestyle and budget.
How to fix it if you’ve accepted the offer
- A reasonable time frame to revise an accepted offer is within 24 -48 hours after you accept the offer. 2 weeks out or the day before you start your first day is not reasonable.
- Craft an email with bullet points (3 max) and links (if applicable) to market research, etc. to back your request about the new salary. Do not call to revise your salary. Send it in writing.
Revising an accepted offer is scary and may seem unbelievable. However, a well crafted, well researched, reasonable revision often works. More importantly, the goal is not to be in this situation at all where you have to revise an offer. Do your research before the position and only answer the salary question at the offer stage when you have enough information to present a well planned, well thought salary for yourself.
Top resources for Calculating salary
- www.salary.com to research US salary ranges for jobs
- www.Glassdoor.com (for outside the US) go to Salaries
- www.payscale.com to evaluate a job offer. It’s really nice!
- CNN Cost of Living Calculator
Top Resources for Calculating a Budget
Note: Track expenses for a month or minimum 2 week period.
- A notebook
- Excel Spreadsheet templates for budgets (New/personal budget template)
- Charles Schwab Money Wise Monthly Budget Planner
Top Budget/Bill Pay Apps for mobile:
Ending Thought: The key to landing the right salary for your lifestyle and budget is research and preparation. The goal of this post and my BlogTalkRadio Show was to show you how NOT to be in a position where you’ve asked for the wrong salary. How not to be in a position where you may have to go back and fix it or kick yourself 1 month, even 6 months later when it’s too late. With the proper preparation and research, you can and will land the perfect salary for the job you seek, creating a win-win for both your potential employer and you.
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Career Talk with Holly Bunn Online Radio Show, Saturdays at 12:30pm ET. Click to learn more: http://bit.ly/msresumehelpradio
Holly Bunn is a resume writer, career coach, and motivational speaker with more than 15 years of experience in Human Resources, recruiting, and technology. Her clients have secured interviews with Fortune 100 companies. She is sought after as a subject matter expert on LinkedIn and has delivered workshops and speeches to hundreds of job seekers. For more information on career coaching or resume help, contact Holly at (305) 791-6965 or firstname.lastname@example.org.