Wednesday June 10, 2009
Pricing Yourself in a Down Market
My friend Jane had two job interviews last week, and she called to tell me about them. "They were both second interviews," she said, "and I was champing at the bit to talk about the salary level with both employers to make sure I wasn't wasting my time."
"So, did you get to talk about salary?" I asked. "We did, in both cases," said Jane. "The first employer named a figure that was a little low, but I know how tough the job market is, so I named a slightly higher figure, and we left it at that. If I get an offer for that job, at least I know I'll be able to live on the salary, and the job itself sounds really fun."
"What about the other job?" I wanted to know. "Here's what happened in that case," said Jane. "They told me that they wouldn't discuss salary until they'd settled on the final candidate. Then, the HR manager asked me, 'What is the lowest salary you would accept?'"
"How did you react to that?" I inquired. "I gave her the same number I'd given the other company, a little less than I was earning before, but not drastically less," said Jane. "I thought the question itself was insulting. I'm not going to lowball myself just because the job market is crowded. Employers still have problems that need solving, and I've solved these types of problems before. I don't see any reason to cut my salary level in half."
Keep Your Counsel
Job-seekers need to be ready for startling interview questions like "What is the lowest salary level you would accept?" in this rocky job market. When you're asked a question like that, do you need to share a rock-bottom figure? I don't recommend that you do. Negotiation is negotiation, whether you're selling a house or buying a car or applying for a job opportunity. Rule No. 1 in any negotiation is to keep your counsel and share only the information appropriate for the stage of negotiation you're in.
The company rep who asks you, "What is the lowest salary you'd accept?" hasn't made you an offer yet. It is prudent and appropriate at this stage to mention a conservative yet reasonable salary figure. If employers want to lowball you, that's their business — you can respond as you see fit. No need to do it to yourself!
The summer of 2009 is not the moment in time when most job-seekers will command, or demand, the highest comp levels of their careers. Unless you're in a white-hot function in a booming industry (and I'm struggling to think of one), the more practical approach is to settle on a salary target that's comparable to, and not more than, what other people with your skills and experience are earning. You can gather this information using Web sites like Payscale.com, Glassdoor.com, and Salary.com.
You can get more salary data by checking with local search consultants and salary surveys published by industry-specific and function-specific trade magazines. One headhunter I know told me that starting offers for her candidates are running about 10% lower than comparable offers this time last year. Another search person quoted me a 15% figure. These cuts are significant, but they're not catastrophic. Adopting a "cheapest talent on the market" pricing strategy isn't necessary, and it isn't wise.
Desperation Is Not Appealing
If you've been earning, for instance, around $75,000 for several years, I wouldn't cut your salary requirement by more than 20%. Doing so won't help you get a job and could even hurt you. As in the dating arena and many other realms, desperation is not appealing. Employers are less likely to go with the cheapest candidate than to hire someone they're confident can do the job and who's also within their target comp range. Businesses know what it's likely to cost them to get their most thorny and expensive business problems solved. They've budgeted for that. If they haven't, you can bet they also haven't banked on spending the time and internal resources that it will take to achieve the goals they're shooting for. In a case like that, you might accept the under-resourced job and wish you'd stayed in the job market a bit longer. As far too many anxious job-seekers have learned, there are worse things than being unemployed. And having a thankless, hopeless, Superman-couldn't-do-this-job-job is one of them.
Expect employers to negotiate hard with you, and expect them to withhold perks you might have taken for granted in past jobs. But don't expect, and don't build into your job-search plans, rock-bottom salary levels. There are employers making offers like that, and there have always been those bottom-drawer employers. They haven't just arrived on the scene and they're not going anywhere soon. You won't budge an employer like that from its take-it-or-leave-it hiring philosophy, but you can move on to other opportunities with employers who'll value your talent and experience enough to pay the (slightly depressed) market rate. Aren't you worth the extra time it'll take to find those people?
Liz Ryan is an expert on the new-millennium workplace and a former Fortune 500 HR executive.