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I am looking for entry level jobs in software development. I am not very experienced in handling salary negotiations during an interview. I have thought of a simple strategy -

  1. Estimate your market value (eg. $10/hour)
  2. Estimate your need (eg. $12/hr instead of $10/hr due to commute etc.)
  3. Quote far more than needed rate. (eg. $15/hr )
  4. Interviewer will hopefully come down to desired rate (eg. 12 or 13)

My question is what are the consequences of asking far more than what you are worth ? I know it will make me look greedy, but I have to negotiate. Could this be a strong reason for a HR to reject me ?

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    +1 for asking for using this site as a sounding board before you gout and execute your plan. – Vietnhi Phuvan Jun 22 '14 at 17:28
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    Note that if you "need" 20% over the market value for the positions you are applying for, you could have a problem. What is it that you offer that is worth 20% more than the market value of the position? – PurpleVermont Jun 22 '14 at 17:42
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    That is not being greedy. Greed is wanting something you haven't earned. If you intend to earn it, then you are just negotiating. – Wesley Long Jun 22 '14 at 23:01
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    @WesleyLong - Perhaps unrealistic would be a better word. – sid smith Jun 22 '14 at 23:16
  • @PurpleVermont - "The market value" of the position may need + 20 % too. – Nicolas Barbulesco Jul 23 '14 at 12:45
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Absolutely this could be a strong reason for HR to reject you.

You say you're looking for an entry level job, so presumably you have not had much opportunity to prove yourself. As such, there is no reason for an interviewer to believe you are worth much more than market value.

When you go in and ask for 50% over market value, without any compelling evidence that you are worth that much, HR is going to most likely drop your resume in the trash. There will be plenty of people going in and stating a salary requirement much closer to the market value. Unless you have impressed them well above and beyond other candidates, there is no reason for them even to try to negotiate with you, if they feel they are unlikely to come to a mutual agreement due to the distance between your stated salary needs and their budget and assessment of the job's value.

I think your main problem is that even the minimum amount you are willing to accept is already well above the market value for the type of position you are applying for. The company doesn't really care that you "need" more for commuting expenses. From their point of view, what are you bringing them that is worth more than market value? Presumably in the current market, they have candidates willing to take the job for market value or even a little less. Why would you be worth paying more? Be sure they know what is so great about what you offer before you name any numbers.

That said, it's always best not to be the first one to state a number, if you can avoid it. See Does the first person to mention a number in a salary negotiation lose? for example.

  • Yes, that makes sense. I was thinking from the perspective of the HR/Company as well. If a person asks for too much, then maybe he will try to ask for more once he has found a critical role in the job or he could even leave the company too soon if he gets a better offer. Does this make sense ? – sid smith Jun 22 '14 at 17:26
  • I was advised to ask for a "big amount" so that they will come down to my rate. But, I know that the big amount is quite far from what value I bring. I want to quote a slightly higher amount, but not too high like the amounts which were suggested to me. – sid smith Jun 22 '14 at 17:28
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    Yes, if you have to name a number, it's good to name a number that is more than what you are willing to accept. BUT... if that number is WAY out of line with what the job is worth, they will probably think you are unrealistic about your value. If you name a number too far out of range, they will think that there's no point negotiating because you are starting out too far apart. – PurpleVermont Jun 22 '14 at 17:41
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I think your use of the phrase "far more" (and the example of 50% over market rate) is what people are reacting to in their answers.

Your "market value" is simply what an employer is willing to pay when you're stacked up against the competition.

Entry-level positions usually do have SOME room for negotiation, of course, and that varies according to qualities of the individual candidates, the choice the employer actually has, and their own policies. All of these things together can cause the amount of negotiation room to vary wildly from zero to quite a lot.

I do think that asking for a salary that is far beyond what you're willing to accept is risky, even for experienced candidates. You might not get the offer but you'll learn a hard lesson for next time.

There is a lot of advice here and elsewhere on how to handle the salary negotiation. In general all this is easier if they just give you a number that you can use as a starting point or accept or reject.

Sometimes, however, you find yourself in a situation where you have to give a number first. To handle that situation, you need to do some homework beforehand to find out what are the ranges for that job in that company (or others like it). It is best to indicate your expectation but leave a door open to flexibility (eg "I understand that the typical wage for this entry-level position is somewhere between 10 and 13, does this match what you had in mind?" )

The salary expectation question definitely will come at the end of the process if you've had successful interviews and they want to make you an offer. In that case, give a range of salary that you're willing consider. They may come back to you with something towards the lower end of that. If so, you USUALLY can ask for something more-- after all, they're extending the offer to you so they chose you. That can be worth a few percent at least, but don't go overboard with back-and-forth. One bounce is what I always do, some people get away with a lot more haggling, but there's more risk that they'll drop you.

If you're dealing with recruiters or HR departments, they will sometimes try to put the salary expectation question upfront. This is not the final negotiation, of course, but it can be used to screen out candidates who have salary expectations that don't overlap with what is budgeted for the position. When you answer this you definitely want to leave the door open as wide as possible for further negotiation. YMMV, but I always give a lower bound and indicate a strong desire to find out more about the specific position.

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To be able to negotiate, you have to be in a strong bargaining position. Do you have experience that makes you stand out from other applicants? Skills? Evidence of outstanding ability that would make you a compelling hire? If the answer is "no", then you have no leverage and the only bargaining you'll do is bargaining with yourself.

To negotiate effectively, you have to put yourself in the other parties' shoes. And why should the other party see in you than a kid with an over-inflated view of themselves? What's so compelling about your candidacy that would motivate the other party to get to the negotiating table rather than just end the whole charade by making an offer to one of your peers? How are you going to convey your willingness to negotiate to the other party when they don't care whether or not you are willing to negotiate?

You did not analyze your relative bargaining positions. You did not analyze your relative strengths and weaknesses. You did not analyze the motivations of each party and how their motivations might either drive them to negotiate,or not to bother negotiating. You did not prepare. Negotiations are a lot more than mere haggling, so you don't understand the negotiating process itself either. The notion of haggling implies a process of give and take- What is it that you can give in your position - I mean, really give? There is a reason why those who argue for a raise make damn sure that their arguments are lined up before they ask. Because they know that the failure to prepare means at best that they don't get a raise and at worst, that their jobs are in jeopardy. You're going to be slaughtered.

Now, you know why excellent negotiators are worth their weight in gold.

  • I was advised to ask for a "big amount" so that they will come down to my rate. But, I know that the big amount is quite far from what value I bring. I want to quote a slightly higher amount, but not too high like the amounts which were suggested to me. – sid smith Jun 22 '14 at 17:29
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    "bartering" is not the word you want there -- it means trading items or skills for other items or skills without the exchange of money. Perhaps you mean "bargaining" or "haggling"? – PurpleVermont Jun 22 '14 at 17:45
  • As I said, negotiations are about a lot more than mere bartering. Bartering involves give and take, you have little to nothing to give that they want. If there are throngs of other applicants, then your bargaining position is even weaker, isn't it? I shouldn't have to repeat myself. Good negotiators may pretend on occasion to be deaf but in fact, they have outstanding listening skills. – Vietnhi Phuvan Jun 22 '14 at 17:45
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    @VietnhiPhuvan "You keep using that word. I do not think it means what you think it means." en.wikipedia.org/wiki/Barter vs. en.wikipedia.org/wiki/Bargaining – PurpleVermont Jun 22 '14 at 17:52
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    @PurpleVermont I just checked the Mirriam-Webster online dictionary. You're right about the definition of 'barter' and I am wrong. As your guest, I am entitled to a good helping of crow :) I'll edit "bertering" to "haggling", as per your feedback. – Vietnhi Phuvan Jun 22 '14 at 17:53

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