Why do job applications ask for desired salary? What are the consequences of giving a number too low or too high?

Question

This is similar to this question: How can I determine a reasonable salary to ask for?, but I think it's asking different questions.

I'm still in college and applying to jobs, so I'm a little thrown off when job applications ask for desired salary, because I'm not sure what to put. I use Glassdoor to get an estimate for postings at companies that are on the site, but I worry about putting the wrong thing down. If the question isn't required by the form, I avoid answering it.

So, my question is, why do companies ask this instead of just including the salary range in the posting, as some places do? If I put a desired salary that's much lower than they were expecting, will they underbid me? If I put a desired salary that's too high, will they not consider me because of that?

Are applicants ever rejected just because of the desired salary they entered?

Any insight is much appreciated.

Answer 1

As you identified, there are lots of questions on here already about what number to put when an employer asks, or even whether or not you should fill that field in at all.

Your question seems different, since you seem focused on understanding why employers ask this. It's hard to answer this broadly because different employers will have different motivations for what seems like similar behaviors to a candidate. So, we can provide potential explanations but it may not play out that way at a particular employer.

You asked several related questions:

why do companies ask this instead of just including the salary range in the posting, as some places do?

Let's turn this around a bit and instead, answer: "Why do some employers actually post a salary range?"

There are a few reasons:

• They may be required to. For instance, some government jobs, or jobs where pay structures are managed via unions or some other external body, are required to state salary in job postings (or, do so indirectly by including a reference a pay grade or other standard).
• They may want to get a jump start on filtering out candidates who aren't going to work, based on fixed salary ranges. If an employer has an internal salary management policy that strictly limits salaries for open positions (i.e. "Software Developer 1" fits in a band of 73,568 to 92,334) then there's really no point in trying to hide that, is there?

The second bullet leads to your other questions:

If I put a desired salary that's much lower than they were expecting, will they underbid me?

Maybe. Shortsighted employers, i.e. those who are treating candidates as a one-dimensional resource they can attempt to buy at will for the lowest possible price, will probably do so. Other times, if your salary requirement is significantly too low, an employer may take it as a sign that you're ignorant, unskilled, or otherwise unsuitable for the job - I've watched hiring managers dismiss candidates who underbid themselves simply because, "well, if that's all they think they're worth, they must not be very good."

You also asked about the other end of the range,

If I put a desired salary that's too high, will they not consider me because of that?

Again, the answer is "maybe." If an employer has strict requirements on salary ranges, and you're way outside it, it's probably in both parties' best interests that they do not consider you for the position, isn't it?

So. All that said, to directly answer your original question of why employers ask you to state a desired salary, there are really a few possible reasons:

• It helps them understand your own perception of your value as an employee.
• It helps them understand if your self-worth fits in with what they have budgeted for the position, or what they're allowed to offer for the position.
• It gives both parties a starting place in terms of negotiating a salary to include as part of a compensation package in a potential job offer.

Answer 2

Employers will want to get a 'good deal' out of hiring someone; stating a fixed salary on the job advertisement reduces the chance of that happening for them.

If two equally skilled and likeable candidates are being considered for a role, they will likely want to go for the one that is prepared to work for less money. Giving an expected salary that's very low may make you a more appealing candidate, but it doesn't serve the candidate much good. Yes, it runs the risk that you may be 'underbid', but it will be up to you to decide if the role is really worth working for less.

On the opposite side of that, if you give an expected salary that the employer thinks is too high, they may give you a chance to justify that extra pay. Do you have any additional skills that might prove useful? Something above and beyond the role you are applying for? Have you a year or a decade's worth of field experience? This gives your employer a chance to learn something about you and your usefulness that they might have overlooked. IMOE this is especially common in interviews where the role itself isn't clearly defined. The employer doesn't exactly know what they're looking for, but if a candidate has lots of additional skills, they could be worth the higher investment.

So long as the candidate does their homework - comparing the role against similar ones in other companies / industries - and doesn't propose an outrageous salary, they are unlikely to be automatically rejected. Having been on both sides of the interview desk, if a candidate suggests a higher-than-normal expected salary, it gives the candidate a chance to explain why they are worth it.

Answer 3

If you give a salary that is too low: Either the company concludes from your salary that you cannot be qualified for the job, or will quickly leave for a better paying job, and not hire you. Or they do hire you, and pay less than you deserve. In any case bidding too low is always bad for you.

If you give a salary that is too high: Either they decide it is more than they want to pay, and try to negotiate you down. Or they decide it is a lot more than they want to pay and don’t even try to negotiate, so you don’t get the job. Or they are completely bamboozled and pay what you ask for. So you can and should ask for more than you are willing to accept, but not too much more.