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Written by Paul DruryPaul Drury

How to discuss compensation expectations in an interview

13 min read
How to discuss compensation expectations in an interview
Artwork by:Antonina Kasyanikova
You should feel a frisson of excitement when it comes to a serious conversation about compensation with a potential future boss. There is a lot on the line for them, too. Here is how you manage the compensation expectations discussion like a pro.

It is a key question for any candidate, but bide your time and approach the compensation expectations question with caution. It is certainly worth waiting until you know more about what the job entails. Has the hiring manager warmed up to the thought of hiring you?

Every successful interview process turns into a negotiation at some point. It might seem strange when you find yourself in a back-and-forth salary negotiation for a job that you are keen on, but you only get one chance to get an increase in your starting salary. 

Moving jobs is a proven way to make a step change in your compensation. If the candidate market is tight, you might be surprised just how much of an uplift you can demand. Here are a few things that we will cover in this blog:

  • Why do hiring managers ask the compensation question?
  • When is the right time to ask about compensation?
  • How to prepare for the salary question
  • How to discuss comp in an interview
  • The impact of salary transparency

If you have done a great job of selling your skills, the hiring manager will be on the hook. Be ruthless but realistic – your future self will thank you.

Compensation expectations
Compensation expectations
Expert tip

Understand the job before you consider the potential salary. The compensation for any role will be directly linked to its demands. Study the job description when you do your job research and think carefully about what you think the company will offer for such a position. How important is the role to the company’s mission? What is the impact on the bottom line? 

Why do hiring managers ask the compensation question?

When the interview conversation turns to compensation, every candidate should analyze just how invested the hiring manager seems in their answers. Hiring managers often ask the question because they need to tick the formal “salary expectations” box, but if they are keen on a candidate, there are a few other motivations:

  • They want to understand that the package matches your expectations.
  • They may need internal sign-off in advance if you are at the top of the band.
  • There is a correlation between salary and achievement – highfliers are paid more.
  • They will be curious about whether you are confident in your worth.

A candidate who is hesitant or modest in answering this question will be viewed with suspicion. Know your worth and stick to your guns.

When is the right time to ask about comp?

There is a school of thought that suggests candidates should not bring up compensation in an interview. As long as you have a general understanding that the company pays salaries in line with the market, there is no reason to mention the topic before you know for sure that the hiring manager has a firm interest in you. 

If you sense that the potential salary might be on the low side, you might choose to bring it up to avoid wasting your time in a second interview. A candidate who brings up compensation may seem desperate. Play it cool. Give the hiring manager the impression that you are fielding various offers and that only their best shot will do. 

Also, only go hard on the compensation negotiations when the time is right. It may be that remuneration is only mentioned in passing to start with, in which case keep your persuasive power dry. You only get one chance you push for a budget-busting salary.

Preparing for the salary question

The best salary negotiation is one where both parties appreciate the value of the applicant to the employer. For a candidate, this means researching the nature of the role and understanding the compensation structure of similar positions.

Research the market

There are many online resources for benchmarking salaries, so make sure that you look at a cross-section rather than rely on isolated reports. Ensure that the sample size is significant, geographically relevant, and suitably industry-specific.

It is also well worth signing up for industry recruiter email lists. Recruiters have a vested interest in negotiating higher compensation for their candidates as that means that they earn more commission. Recruiter salary surveys often ensure that both applicant and employer are on the same page when it comes to comp negotiations.

Consider your financial situation

As you prepare for the salary chat, be honest about what salary would make you smile to see drop into your bank account every month. Work is a tough slog most of the time, so you owe it to yourself to push for the highest possible comp (whilst still being realistic).

Think about any additional costs that may be involved with certain roles (commuting or clothing for an office role, etc). If you are joining a company where employees socialize actively outside of work, you may wish to include that on your salary P&L sheet.

Adding desired salary on a job application

Some job applications will ask you to add a desired salary. If you are not sure whether the company can afford you, include a salary range to ensure that you do not waste your time, but otherwise try to avoid writing down a desired comp on your application. You will end up putting yourself in a salary box way too early in the process.

If this is a required field, err on the ambitious side. Better that than having the hiring manager rejoice about just how “cheap” you are. If you put an elevated expectation, they will be curious about why you value yourself so highly.

How to talk about compensation in an interview

Talking about money in an interview will be awkward, no matter how you approach it. If the hiring manager likes you, they won’t feel comfortable defining you by a number. If you follow these suggestions the conversation will be as painless as possible for all concerned.

Give a range rather than a specific number

When the salary question is first raised, you should be aware that there are likely to be other candidates in the mix. Employers will want to get a ballpark estimation at this point, so give a salary range that is acceptable to you. Do not rule yourself out at this point if possible – if they like you, you can always talk them up toward the top of the range later. Pitch a salary range that will make them wince (at the top end) but keep them interested.

Don’t be the one to bring up the topic - unless you have to

Ideally, applicants should wait until the employer brings up the compensation question. Unless there is a process for another role that is coming to a conclusion and you need to make swift decisions, let the interview process run its course. If you seem keen to find out about the compensation package it can make you seem somewhat desperate. The remuneration discussion will only start in earnest when you are nearing the offer stage.

Consider the broader compensation package

Don’t forget that compensation is about more than the basic salary. See how flexible they might be with the bonus structure and probe the possibility of flexible working. What is important to you in life right now? In this current financial environment, don’t forget to ask about the frequency of future pay raises and whether they will track inflation. Do some research into the reputation of the employer in terms of how they pay their people.

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Everyone experiences anxiety before and during an interview. That is entirely normal. The outcome simply matters too much. Having said that, if you are prone to excessive levels of anxiety at critical moments, this blog may suggest some ways to lessen the impact.

Probe what they think you are worth

You should enter every negotiation with your eyes wide open. Before you put your cards on the table in terms of salary, give the employer an opportunity to fall in love with you that bit more. When you are the “preferred candidate” you will have so much more negotiating power. If they have already balked at your high demands earlier in the process, it will be psychologically a little bit more difficult to change their mind.

Remember it’s ok to avoid the question

“I would like to be paid what you believe I am worth.” That is a common line that many candidates use to swerve the question if it comes up early in the process. Employers might be fishing to establish a negotiation position, but don’t feel drawn into a discussion if you are not ready. In reality, you don’t have to come to a final decision on compensation until the offer stage. Use your judgment, but don’t be deliberately evasive.

The psychology of a salary negotiation

Whether it is in person or over email, any salary negotiation can seem somewhat demeaning. How can the employer possibly not be ready to pay you what you think you are worth? Surely you should walk away with your dignity intact?

The reality of compensation arrangements is that hiring managers’ hands are often tied. If you do not fit into existing salary bandings, then there is often nothing that they can do. If they really like you, however, they will often move heaven and earth to offer you the salary that you deserve. 

If there is potential movement, bear in mind the following psychological considerations:

  • The hiring manager is on your side – don’t be confrontational.
  • Give them compelling reasons to support any internal salary wrangling.
  • Don’t push them into negotiating on your behalf – let them decide they want you.
  • Don’t lose sight of the fact that you are so much more than a number.
  • If your positions are too far apart to begin with, you will likely never meet.

The impact of salary transparency

Various national and local governments are introducing legislation that requires companies to be transparent about salary structures. This initiative has made a significant impact on the gender pay gap, but many employers are still adopting opaque tactics such as advertising ridiculously wide pay brackets and choosing not to disclose bonus structures.

While it remains the case that the salary for any given role will hover within a band dictated by the candidate market and employer priorities, there will always be exceptions. Do not let yourself be put off by the low end of a salary range. This does always not mean that the scope of the role is limited. It may just be that the employer is open to interviewing a broader range of candidates.

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Key takeaways

View the compensation expectations discussion as your reward for a successful interview process. You may be mentally exhausted, but don’t sell yourself short. You are about to set the salary bar for every month of the foreseeable future. Negotiate hard. If they are not prepared to pay you what you think you are worth, don’t hesitate to walk away.

  • View the hiring manager as a partner in the discussion – not a rival.
  • Do your research and have an idea of what would be acceptable for you.
  • Wait until you understand the role and have impressed the employer.
  • Realize that you have the opportunity to negotiate right up to signing the contract.
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