You have two main objectives before you begin negotiating:
- Understand why you are a valuable candidate for this job
- Determine the minimum salary you require to do this job
You’ve probably heard that the key to negotiating is being willing to walk away. Your minimum salary requirement is how you pre-decide when you’re willing to walk away from this salary negotiation. This is also the single most important number you’ll use when negotiating your salary, and it’s your minimum metric for measuring success.
Here are several things you should consider as you determine the absolute minimum salary you’ll accept to do this job:
- Your current salary
- Your market value for this job
- The amount you think you can get
- What people in your target job at your target company are currently making
- How badly do they need you? (0—10)
- How badly do you need this job? (0—10)
- When is your next merit increase at your current job?
- When is your next bonus at your current job?
The nice thing about this list is that there’s value in just thinking about each item. I recommend that you write down your responses, but if you’re not up for that, you should at least take a little time to think about each item. Something may occur to you that will help you find some little bit of leverage you may have otherwise missed.
Let’s take each of these items one by one to understand its significance and how it helps you determine your minimum acceptable salary.
Your current salary
Chances are your goal is to increase your salary by taking a new job, so this is your starting point. Plus, it’s what you’ll ultimately measure your results against when your negotiation is finished.
As I mentioned in The Dreaded Salary Question, you should not share this with the company! This number is for your eyes only!
Your market value for this job
Estimating the market range and your market value for the job you’re pursuing is very important. This is your first step in determining the minimum salary you’ll accept for this job. Before you can set that minimum salary threshold, you need to understand what your skillset and experience are worth in your particular industry and for this particular job.
This is important for all salary negotiations, including raises, so I wrote an entire chapter on the topic of estimating your market value. If you have not already, I recommend estimating your market value before you continue.
The amount you think you can get
This is a ballpark number that you’ll keep private. It’s one metric for measuring your success in this negotiation. It represents what you think you’ll get without using what you learn here. Think of it like this: This ballpark figure is what you’d answer if someone surprised you right after you sent your first application to the company by asking, “If they offered this job to you right now, what do you think they’d pay you?”
My goal is to help you exceed this number.
What people in your target job at your target company are currently making
This step is similar to some of the steps for estimating your market value, but it’s slightly different. Rather than trying to learn about salaries in your own company or elsewhere in the industry, you’re specifically focused on people doing your target job at your target company.
There are a couple ways you could find this out. If you know a manager at this company, they may be able to give you a sense of what your target job pays there.
If you know someone doing your target job at this company, talk to them and see if they can give you a sense what the job pays. You may not want to come right out and ask what they’re making, but you can ask a hypothetical question like, “If someone were hired at your company today to do a job similar to yours, what sort of salary do you think they would make?”
It also helps if you can get a sense of how well the person does the job, and how long they’ve been doing it so that you know how you stack up against them. Then you can get a sense of how your salary might compare to theirs if you were to do the same job they do.
CAUTION: If you are able to find this information, you will not explicitly mention it during your negotiation! Pretend you have top-secret intel on the company, and that you’re using that intel to your advantage.
How badly do they need you? (0—10)
During your interviews, you may have gotten a sense of how badly they need you or someone else to fill this particular role. This is extremely subjective, but it helps to have a good idea of how badly they need you.
0 means they don’t need you at all. Maybe they’re interviewing you as a favor to someone who works at the company, and the job wasn’t even open.
10 means they’re desperate to fill the position as soon as possible and you’re the perfect candidate. Maybe they called and said, “Are you available? Frank just left without giving notice and we have to get someone as soon as possible. You’re perfect for this role, so we called you first.”
Here are some things you can consider to get a sense of how badly they need you: Did they call you, or did you call them? Have they mentioned anything about someone else recently leaving this job? Have they been trying to fill the job for a while? Are they filling one position in this job, or are they filling several positions in this job?
If you find that this number is close to 10, you’ll want to tactfully emphasize this during your negotiation.
How badly do you need this job? (0—10)
This one is less subjective.
0 means you could take it or leave it. Maybe you are interviewing as a favor to someone.
10 means you’re unemployed, your savings is depleted, and you need a job immediately or you won’t make the rent this month. Or maybe you just really, really want this particular job.
If your number is close to 0, you’ll want to tactfully emphasize this during your negotiation.
When is your next merit increase at your current job?
This one is pretty straightforward. The point matters to you because you’ll want to account for it when considering the minimum salary you need to entice you to take this job. If you’re due for a 3% merit raise next month, your minimum acceptable salary might be slightly higher when you account for your pending raise.
When is your next bonus at your current job?
Many companies give semi-annual or even quarterly bonuses, so this is a separate issue from your next merit increase. You may want to account for this when determining your minimum acceptable salary, and it could also come in handy in the final stages of your negotiation when you consider non-salary benefits. For example, you may use your upcoming bonus as justification for requesting a signing bonus:
“I’m due for a bonus next month, and my on-target bonus this quarter is $2,000. It’s really going to sting to miss out on that. Can we talk about a signing bonus to help offset that loss?”
A few more things to consider before setting your minimum acceptable salary
In addition to all the things we discussed above, there are a few more things you might consider when deciding the minimum salary you will accept to do this job:
- How do you feel about your target company? The better you feel about the company, its culture, your potential coworkers, etc., the more this might push your minimum acceptable salary to a lower number.
- How do you feel about your target job? The more excited you are for this particular job and the opportunities it affords you personally and professionally, the more this might push your minimum acceptable salary to a lower number.
- Are there perks that make this particular opportunity more attractive? For example, maybe it would reduce your commute by 30 minutes a day, or you would get to work with technology that you’re more comfortable with. The more appealing the perks, the more this might push your minimum salary to a lower number.
Picking a number: The absolute minimum salary you will accept before walking away from the opportunity
It is important that you determine your minimum acceptable salary now, when you are objective and clear-headed, as opposed to waiting until you’re in the midst of a negotiation when things can get fuzzy. Deciding now may keep you from making a spur-of-the-moment decision (accepting less pay than you require) if you get involved in a stressful negotiation. More importantly, making this decision in advance gives you some leverage in your negotiation—if the recruiter or hiring manager senses that you’re serious about walking away, they will be more careful to make you an offer in your acceptable range (even if they don’t know exactly what that is).
This is an extremely subjective personal decision. You’re really trying to answer the following question: “What is the minimum salary I need to leave my current situation and take this job?” You’re hoping to make more than this number, but you would be happy making this salary, and you will not accept the job for a base salary less than this number.
Now is the time to decide: What is the minimum salary you will accept to do this job?
Think about this long and hard because it really matters. When you set this number, you should stick to it unless you discover significant new information that forces you to change it.
Got your number? Then you’re ready to negotiate your new salary.