How to come up with a suitable salary expectation
Doing your research correctly so you neither ask too much nor not enough
Determining what salary to ask for is difficult. You ask for too much, and you are shown the door. If your demand is too low, you'll be underpaid for a long time.
Let's see how you can find the right amount to ask for.
Do your research
This is important. Often, you don't even have a good idea of which amount of money is actually fair to ask for. You need to do research to find out what others in similar positions earn. This usually gives you a basic idea of what range you can aim for. You can start with salary calculators like PayScale or Salary but only use them as a rough indicator. Their results are based on the voluntary input of data by people like you. If someone provides a fake salary, it affects the outcome negatively.
If you have the chance, ask people in your network whether they can provide you with a rough range of their current salary. If you don't know anyone of your skill level, ask more experienced people in your network whether they have an idea or what they would ask for. Make sure those people know your local market. Developers in India, for example, are sadly paid far less than developers in the US. And this does not only have something to do with their cost of living. They are usually really underpaid, not only relatively.
If the country you apply for a job in has a legal obligation to publish salary information about immigrants being hired, this is a great chance to get unfiltered and unaltered data. Those are the salaries companies really pay their staff. You nearly can't get any better data.
Some companies have started to list salary ranges on their job ads. This is also unfiltered and unaltered data. You can use it as well, but it's still scarce. Chances are high you won't find too much. It's still worth putting the time in to find a few numbers.
Come up with your own salary range
You should have some data by now, and you should be well aware of your monthly expenses, as well as your current salary. Try to find a number you would be comfortable with as your goal. This is the amount you want to earn in the future. The better the quality of your data, the better you can estimate whether your expectations are realistic. If you are currently very underpaid, you might be able to make a 70+% jump. If you already earn high, you could end up with only a few percent more.
It is pretty difficult to decide whether a number you come up with is really realistic. Double-check your data and if you need reaffirmation, reach out to your network and ask for help there. People who know your local market should give you an idea of how realistic your number is. And if you don't know any, try to cold-email or InMail recruiters on LinkedIn. Ask them for this favor, and promise to stay connected for the future. After this, create a salary range for you. The low should at least be your current salary plus a few percent. Your target salary should be somewhere near the middle. The high should be a still realistic, but unlikely to hit, number.
Don't forget to ask yourself how much of your salary you are willing to sacrifice for certain benefits. More vacation days, paid sick days, a huge education budget, and paid time for it could be worth accepting a lower offer than what you expected.
You should also be prepared to lower your expectations on the fly. Although many companies try to list as many benefits as possible in their job ads to attract more candidates, sometimes you only first learn about some of them in the interview. Many interviewers will try to sell you the benefits their company offers as a reason why what you ask for is too much. If you know how much you are willing to sacrifice, you already have a good position. You will need to come up with your own reasons why certain benefits are not worth sacrificing salary. A gym membership, e.g., in my personal opinion, doesn't justify taking a pay cut. I prefer to do my sports outside. If it's forced on me, fine, but don't charge me for it.
Why a salary range
Sales negotiations usually go like this:
- Party 1 asks for a certain amount
- Party 2 wants to pay less and makes a counter-offer
- Party 1 won't agree and lower their initial offer
- Party 2 will now up their offer a little
This process goes on until both parties meet at a price they are comfortable with or until one party decides they don't want to negotiate further because they can't hit a number they feel good with.
In case of a range, you give the company room to negotiate. It's a statement from your side:
- This is the lowest I am willing to accept
- This high is what I'd love to get
- But I am willing to accept something in-between
- Now make me an offer that fits in this range
Psychologically, offering only your low-end expectation seems rude. This is why you will usually be offered at least a little more. The better your overall performance, the more you usually get. The high-end of your range is often just a number, though. One you won't hit often. The company wants to avoid paying you this amount. They want to save at least some money. Everything below this is a win for them, at least psychologically.
State your expected range
Make sure to state your expected salary range as early as possible. In most cases, recruiters will either ask for your current salary (don't answer, state your range!) or ask how much you expect. Use this situation to give them your expectation. If no recruiter asked you what you expect, make sure to drop it in the first interview as soon as possible. If your interviewer doesn't ask this question, try to steer the conversation toward it. You can save yourself and the other party a lot of time this way.
"Excuse me. We haven't talked about salary yet, but I think both of us must find out whether we align here as early as possible. Could you state your budget?"
And if they don't come up with an answer, feel free to state your own range instead:
"I can understand if you are not willing to give your budget away yet, but I'd like to state that I look for something in the range of X and Y. Do we align here?"
After this, everything else is up to how well the interview goes, how well you are perceived overall, and how much the company is willing to pay you in the end. The negotiation itself is worth an article on its own. It's a complex process.
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