How to respond to a direct ask of salary earned and expectations?

Question

What is the best way to fill out an application form for a role with an unspecified salary expectation where the following questions are mandatory to complete in a pre-interview form:

1. What is your current salary?
2. What salary level are you looking for with regard to this position?

I am wary of entering a specific figure as I know from Game Theory that the first person to mention an exact figure will typically lose, but am a little concerned that entering something vague such as ‘negotiable’, or even £0 will make me look flippant.

The role in question isn’t through a recruiter (who I would be happy to know my expectations and current salary), but rather direct with a company, and as the role in question has no salary expectation listed I am unsure of how to gauge this!

Answer 1

I'm not sure Game Theory applies here. You're all acting (effectively) simultaneously and there isn't a scenario that's negative for everybody.

I think you've got to look at it from the company's point of view. They're looking to save themselves time interviewing someone who is completely out of their budget. Previous salary is a good guide to how negotiable your expectations are likely to be.

My advice: Just be honest. You also don't want to waste your time with a company who's not even in the same ballpark as you. If you're worried about under-bidding and being stuck with less than they would have offered then aim a little high, but not much more than you think you'd be worth elsewhere.

They'll know they can turn around, at the start of the process, and say "Sorry but we're only willing to pay $X,000, are you willing to come down to that?" if they're interested enough.

Answer 2

Setup

You don't have a maximum salary that you want, but you have a minimum.

The company has both a minimum and a maximum. I argue that when a candiate's ask is too low this is a flag that something is wrong with them.

Analysis

So there are 3 possible scenarios with asymetric information; nobody knows the true scenario from the beginning of the negotiation:

1) Company Min <= Your Min <= Company Max

This means you can work here. Whoever names a number first is likely to form a ceiling or a floor, but both parties are aware of that fact. It's just a question of who goes first.

2) Your Min <= Company Min <= Company Max

Typically happens for underqualified candidates.

You can work here if you fool them. The only way for that to happen is if you get them to name their minimum (or maximum, and infer the minimum from it) and realize that your ask is too low. If you name your true Min first, you lose the 'game'.

3) Company Min <= Company Max <= Your Min

You can never work here. The best thing is for you to say "My expectation is X" and they will say "Sorry, we can't do that", but at this point the ball is in your court to accept a potential counter-offer.

CONCLUSION

There is a number of over-simplifications here but: in your original question you assume that you land in #1. I just want to illustrate that this may not be the case. And if it's not, you DO want to name the salary you want first but you want to lie about your actual expectation to make the number higher.

Ceteris paribus, from the company's perspective a confident candidate that asks for a very high rate right away (#3) will trigger a reaction of "Damn, probably good but we can't afford her." Like the people who negotiate cars down from artificially high prices, they will feel good in the tommy if they manage to get that candidate down to a lower rate and hire her.

I advise to name your expected salary first, but err on the side of being too expensive. They will never outright reject you if you are worth your beans. If they like you, they will counter-offer, but you will never end up being under-paid and sometimes you will be pleasantly surprised when your higher ask is met. The downside is that you will miss out on some lower-paid job opportunities - I think we can all live with that.

Answer 3

Very often, your current salary can be an irrelevant fact, but it can still serve as a baseline, for the company to make you an offer.

I had taken up a government job, which was paying way below market level. I had taken it up, because I was getting burnt out in the corporate sector. When I decided to come back, and start applying, I always answered is as follows:

Present Salary: It is X, but the number is irrelevant because of the following reasons:

1. It was a government job.
2. It was in a small town with a way lower cost of living.
3. Candidates with my level of experience normal earn about Y (which is a good deal, about 60% more than X).

No company had a problem with that, and no one offered me less than 20% more than Y

Answer 4

First, realize that Game Theory is a model for human behavior, and it assumes a certain set of conditions in order to make the situation an absolute.

I thought the top answer here was pretty relevant. It boils down to knowing your position and the market and making the request accordingly.

Keep in mind that when you are asked for a salary range as early as the application process, that you are a long way away from the actual negotiation process. At this point, the numbers are as much about making sure that you and the company are not wildly divergent in your expectations as it is about what you may negotiate in the future. After all, you haven't heard much about the job, nor have they heard much about your skills. The whole interview process is ahead of you and mostly they don't want to waste time only to find out that your expectations are literally double their budget.

I'd say, don't get cute. If you feel you are grossly underpaid, then go with a salary that you feel is fair and modest increase. Otherwise, state your current salary and a reasonable increase and assume you can adjust it later. But figure that the person who looks at this data is NOT your hiring manager, and mostly you want to give the right details to get back the basic, background threshold and into the real question of whether or not you and this job are good for each other.

Answer 5

Your current salary is, of course, confidential, and you only have to give that information at your own discretion. Still, I agree, it's difficult to fill in a form that asks it directly. I'd suggest you add a note saying you are willing to give a salary indication once they make contact personally.

When you are able to speak to them, either on the telephone, or face to face, it's perfectly reasonable to avoid discussing your present salary. Their "need to know" dictates only that you are prepared to indicate the salary you are looking for. You could say: "I'm looking for a position with a salary in the range between X and Y, although of course, we'd need to discuss the details of the package at a later stage."

Answer 6

1. Find out what the job typically pays for the location you are interviewing. Years Experience. Skill Level, etc... Tools like Salary.Com or GlassDoor can help.
2. A smaller company with fun smart people might pay the average salary where a larger corporate might pay over the average.
3. If asked outright you could just say "Typically salaries are between X and Y, and I'm looking for fair compensation."

Answer 7

I'm assuming your biggest concern being too low. Unless this is a giant step up the corporate ladder, you may not be in a position to ask for much more than you're making now. That really depends on your current circumstances, location, etc.

If you ask for a salary lower than what they planned on offering (most companies have a fairly tight salary range for most positions before they even post), here are some possible outcomes:

1. They keep lower their offer to your level. You've left money on the table you never knew was there.
2. They maintain their higher offer in hopes it will make you want the position even more.
3. If your request is not a competitive rate, they may think less of you because you either don't know how to value yourself, do a little research or are just afraid to ask. I doubt this happens often and if it does, you wouldn't want to work there anyway.

Look into the company. Many will post a general list of their benefits. If those are competitive and it's an established company, their salaries are probably above average.

Most of all, you need to decide what you want out of a salary and go from there. If you discover the job has excessive requirements like: being on call, travel, weekends, over-time, you can always ask for more.

Answer 8

Who will care if you don't get an interview? If you'd be sad and they wouldn't, then that's the reason you lose the negotiation. Not because you mentioned a number first, but because you need them more than they need you.

If your relationship to the company was symmetrical, then when they say "how much are you currently paid?", you could ask questions like, "how much did you pay the guy I'm replacing in this role?" or "how much on average do you hire people for at this level in the organisation?"

They won't tell you those things. You don't have to tell them your current salary, but they might not interview you if you don't. So you just have to decide what's most likely to get you a job you want. If you think the prospective employer will, with tiresome predictability, make you an offer that's a tiny bit over your current salary and not worth moving for, then you know you're going to turn them down eventually so get it over with now and let them not interview you. Apply instead to employers who don't demand this information.

Ultimately if they stick to their guns, you either have to agree to their terms or give up. And if you stick to your guns, they either have to agree to your terms or give up.

What you put in those boxes will anchor their offer. But it's not certain whether that's a win for you or a loss. The big fear is that because your current salary is low, mentioning it anchors them low. And your current salary is fairly likely to be low or low-ish: you are after all looking for a new job.

Suppose you say you currently make $40k, you tell them this and you tell them you expect $80k. You secretly know your real bottom-dollar: that you will not (for whatever reason) move for less than $60k. Then either they offer you $60-80k or else they don't get you. Let's say they anchor on the $40k, offer you $50k, and demand to know why you love your current job so much. Maybe you end up walking away from a bad offer, but you haven't "lost". It might have been better all around if they hadn't forced you to reveal the $40k, because then you could both have agreed $60k, but that wasn't possible by their choice.

The second fear is that your expected salary is too low. Let's say they'd be willing to pay $100k and you say you expect $80k, you're very unlikely to get more than $80k out of them. It's actually absurd of them to treat your expectations, before you know more about the job, as an offer, but some will anyway.

The final fear is that your expected salary is too high and they figure you're not worth interviewing, and not even worth telling that they'd love to interview you if your expectations were lower.

To avoid those problems the ideal number to say for your expected salary, is right about the maximum they're willing to pay for the role or a little higher. So if you know the market fairly well there's no loss in saying a number first, because the number you say is the right number. The danger is saying the wrong number. So you can either play their game, make it past interview to the real negotiation, and ask for a salary you're happy with. Or you can call them out, refuse to answer, and see whether they're bluffing. It's just a matter of how much you need them.

Finally, if you consider it a game-theoretical fact that whoever mentions a number first in any negotiation is the loser, then consider whether used car salesmen therefore "always lose" because there's a price displayed on every car on the lot. And if used car salesmen always lose at negotiation, does that mean used car buyers always win at negotiation? So why do car salesmen keep doing it? You're not selling used cars, but you are selling something, so any argument that claims you shouldn't say a number first is pure baloney unless it specifically and convincingly explains what the significant difference is between you and a used car salesman. If the difference is about knowing the market value, then what that says is playing games with boxes on forms is only the second most valuable thing you can do. The most valuable is to find out your market value and demand it.

Answer 9

It seems like you have three options....

1. List actual salary
2. List adjusted salary including the value of benefits
3. Fill in zero or leave blank (if possible with a note explaining you'd prefer to discuss salary in person, care not to diclose, etc)

There are pros and cons to each option, the point is to find a way to be somehow truthful while presenting yourself in the best light, and balancing the downsides to which choice you make.

Answer 10

Just to add something here - never mention your salary. Instead, mention your total compensation.

Let's assume your salary is £30,000.

Your employer also gives you

• 15% on target bonus (£4,500)
• 10% pension (another £3,000)
• Healthcare (worth £1,500)
• Discount gym membership (call it £600)
• Travel loan (saves you £100)
• etc etc.

All of a sudden, your total compensation is worth £40,000!

With your new job, the salary may be higher, but they don't offer health insurance or gym membership - in that case, is it still worth taking the job?

Mention to the recruiter the total package - and explain that you'd want X% more. That could be via salary, bonus, company car, etc.

Answer 11

When asked for my salary requirements, I typically answer something to this effect:

My expectations really depend on the overall compensation package. Can you tell me about the benefits and salary range? I am sure we can work something out.

That generally answers the question without actually answering the question while also putting the onus back on the recruiter to show you their hand.