How to Negotiate Money in an Interview

This is one of the most hotly debated topics in the world of interviewing. There are a several successful strategies out there, and a lot of nonsense. It can be hard to tell the difference, particularly for someone that doesn’t do a ton of interviews!

I have a rather controversial approach towards the money stuff, so I will give a brief outline of the most-suggested strategies and share my own thoughts. Just about all of the answers on this page are going to be fine to say in an interview, so don’t freak out if you disagree with my strategy. There is more than one way to skin a cat. That being said, just about all interview professionals will agree with the three Salary Negotiation Golden Rules:

1. The first one to give a number, usually loses.
2. If you give the employer a range, they will come in at the bottom of the range.
3. Don’t talk too much!

Common Strategies

If you were to google this question and read through the first few pages of results, you will see answers like:

• At this stage in the interview process I am still getting to know the job, and as a result I am not in a position to share a number yet. If you don’t mind me asking, what is your budget for the role?

There is nothing wrong with this answer, but I have not seen this be super successful in real-world interviewing applications. Giving an answer like this is admitting that there is a conflict between your best interest and your employers best interest and can come off as a bit aggressive if you aren’t careful. Of course, that is the point here – a lot of folks do feel as though they are in conflict with their employer, and for good reason! Employers have an incentive to pay their employees as little as they can get away with. Many, many people have gotten hosed by crappy employers and have a very adversarial view of the job market. They have every right to feel that way. If this describes you, that is completely normal and natural and these answers will work fine for you.

My personal view is that by answering in a way that makes it clear you are expecting your future boss to underpay you sets the expectation that you are not on the same side and can actually raise the tension in a way not to your advantage. I have had many candidates try using answers like this against my advice and end up losing out to candidates that took a softer approach. But, like I said above, your mileage may vary. Sometimes, employers like hiring someone that speaks plainly and knows their worth!

Another common approach is the following:

• I have done some research on pay for similar roles in the area, and have found $X-Y thousand per year is the going rate. I would like to be somewhere in that area.

I have seen this answer be successful in the past, but again I am not a big fan. I don’t believe in those average-salary websites that tell you how much someone should be earning in a given market – lots of those numbers are taken via a survey. Here are some of the problems I’ve found:

• Almost everyone exaggerates their compensation. Employers exaggerate what they typically offer, and employees exaggerate what they earn.
• Sometimes employers or employees will include bonus numbers in their comp reporting, sometimes they won’t. They do more often when the salary or hourly pay is on the low side to make it seem like they pay better, which inflates the numbers!
• Sometimes people include overtime in their comp reporting and sometimes they don’t.
• Sometimes people that are paid by the hour will not know exactly what their hourly rate translates to on a yearly basis and will just hazard a guess that sounds right.

I have had clients tell me they did a market analysis and come back to me with a number that is either super generous or way, way low. If you have bad data, and you give an answer like this, you might be dramatically undervaluing yourself or you might end up pricing yourself out.

If you were to point a gun at my head and tell me I had to choose one of those sites to use for market analysis, I guess I would use Glassdoor. But even Glassdoor is a poor substitute for actually talking to people working in the market. My best advice is to reach out to people in your industry and ask what they would expect someone with your level of experience to earn. You might be surprised to see how freely people will share this information!

The one time I do normally suggest people ask this particular variation is if the candidate is underpaid and knows that they are underpaid. I say this because if you know you are underpaid, you usually have a better idea of what an appropriate number is, and the advantage of an answer like this is that you don’t give the company an opportunity to pay you less. If they happen to know your current comp, so what – you aren’t asking for more money because you are greedy, you are asking for market value. How can they possibly fault you for that?

So, these are the most recommended answers. I am not a real big fan of either approach, but you can do much worse than either one. I typically recommend one of the following:

• I am targeting $X.
• I am currently at $X

You can see why these are a bit more controversial. A lot of people argue that these are the worst answers you can give, because they are direct and leave little room for the company to make a judgment based on your actual worth as opposed to what the last company was paying you. This is a fair critique, and for folks that are googling the answer to this question in the parking lot before their interview, I would agree that this probably isn’t the answer you want to give. You need to be prepared to give an answer like this.

I prefer this for the following reasons:

• I like direct answers that are short and don’t require you to memorize any flowery language. It is very hard to stutter your way through 5 or six words, no matter how nervous you are! Also, many people make the mistake of talking too much during questions like this.
• It is what I would like to hear in an interview for someone on my team. I like interviewing people that are direct. I want them to be frank with me like I am frank with them.

Now, obviously there is a big difference between the two options above. For these to work, you need to know a few things. First, how does your comp match up with the market? Are you at the low end of the market? If so, take the targeting approach. Are you at the high end? If so, take the “I currently make X” approach. Letting your future employer know that you are currently at the high end of the market makes it clear that to your current employer, you are more valuable than the average professional in your field. But letting them know you are undervalued lets them know the opposite.

Does this leave a little money on the table? Maybe. But you don’t get any money if you don’t get the job, and answering the question my way can save you from making a mistake. Rather than trying to squeeze every penny you can out of your future employer, spend some time setting some expectations about your career goals. The money will come. If they can’t meet your salary expectations, this isn’t the job for you right now. The right job will pay you what you are worth!

Final Thoughts

I understand that a lot of folks will disagree with the approach advocated above but in my daily practice this is just what has worked best for me. I will admit that a large majority of my candidates are left-brain types (engineers, machinists, welders, etc) and while they are friendly, intelligent and hardworking people, they tend not to have a natural instinct for sales or negotiation. I try to keep things as simple and straightforward as possible with these folks and this has influenced my approach. If you have the ‘gift of gab’ you might find this strategy is a bit too limiting for your tastes – that’s okay! As long as you follow the golden rules listed at the top of the page you can’t go too far wrong.

Always remember – if you made it to the face-to-face interview, you are qualified for the job! Don’t be afraid to ask for what you are worth!