5

The price of rent in the area of a potential employer has increased dramatically without regard to the rest of the state and surrounding areas outside reasonable driving distance. In fact, it appears the trend will continue and I will be looking at an entirely different situation in as little as 1-2 years. Is it appropriate to mention this noticeable trend during salary negotiations, and how they dealt with this situation in order to continue competing for talent? Surely, they want to keep a happy employee that is focused on their work instead of rent.

*From my initial research, there has not been an increase in salaries for this area when compared to others outside.
**Assume that relocation to the area will be necessary, and commuting is not an option.

UPDATE:

In response to the answers bearing similarities to the answers in this question, I am not asking a company to accommodate my personal needs regardless of the market rate for the local area. I am well aware that my value is the basis for their salary offer. What I am asking about is referencing an anomalous situation which has been reported by local newspapers.

  • It's hard to imagine raising this subject without the interviewing manager automatically linking this to your compensation. Are you sure that's not why you want to bring the subject up? Frankly, even if it isn't I don't see what you'd learn, assuming they even bother answering. I think you can even assume that they won't have an answer. – Lilienthal Jan 20 '17 at 12:14
  • If I'm the employer I want to know why you're "worth" what you're asking for. If you look at it from that perspective, the answer "because rent is high" isn't really an answer at all. – UpAllNight Jan 20 '17 at 14:46
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Anything is on the table during salary negotiations, but talking rent in particular is too "in the weeds" far down in the details, and gives the other side something to debate you on. Instead, talk more generally that "I've done a cost of living analysis for the area, and comparing my current standard of living to what it's going to cost to live there... ".

Note that depending on your region, situations like you describe (high rent compared to the rest of the state) are "solvable" from the company's standpoint by you choosing a longer commute. Thus, saying "cost of living" is more general, and makes it sound like you're accounting for all options (increase in rent or increase in gas / headache from commute, etc).

  • What do you mean by "in the weeds"? I've read several meanings including "behind in schedule" and "ambiguous". Referencing rent should not be ambiguous, especially when supported by local sources. Do you mean "too high maintenance" or "pointless to discuss"? I can see it being construed as high maintenance / whiney, but it also seems like appropriate research for such a large decision. You're getting close to the green check mark... please update. – user58446 Jan 20 '17 at 3:50
  • Sorry for the vernacular... "in the weeds" in this context means "down in the details", or sometimes "overly detailed analysis". – Paul Jan 20 '17 at 5:38
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I wouldn't bring up any specific reason of why you want more money unless it relates to your ability to do the job in question. It is irrelevant. As Joe points out, you are not going to tie your salary to the cost of the rent/housing in the area. If it goes down, you are not going to voluntarily give up your salary increase. And I'm sure there are cheaper places in the area that you could get that would not warrant you needing a higher salary.

It does not matter why you want a higher salary during initial negotiations and the company is not going to see a specific reason to want more as better than another reason (unless it is related to your capacity to do the job better). It could be for a nicer apartment, you are planning on having a kid in a year, you have an expensive drug habit, it really doesn't matter. Just ask for it and say it is not feasible for you to take the job if it is lower than that amount.

  • It's quite relevant if they're asking you to move. I used this successfully to negotiate my offer when asked to move to a city with a much higher cost of living, by drawing up a little spreadsheet showing that their initial offer would leave me with less money in pocket than I was receiving in my previous job. – jpatokal Jan 15 '17 at 21:11
  • @jpatokal All you are saying is that you asked for more. Respectfully, I doubt if the company considered your reason for asking for more at all. If you showed them a spreadsheet regarding childcare costs, storage costs for your boat, whatever, it really doesn't matter. It comes down to you asking for more and they have to decide if you are worth it. – dfundako Jan 15 '17 at 21:25
  • @jpatokal The company I work for has an explicit policy of setting salaries by local market standards. I demonstrated that they were underpaying, and what they were offering as a raise compared to my previous salary wasn't. And sure, I might have gotten the same result just by stamping my foot and demanding more, but there's more to salary negotiations than just raw numbers. – jpatokal Jan 16 '17 at 5:23
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You can reference anything you want in your salary negotiations, whether they buy your references is another story. Yes, they want a happy employee who is focused on work rather than the rent. And if that happy employee turns out not to be you, they can probably live with it. Don't assume that there is a critical shortage of qualified Millenials who live within commuting distance in their parents' basement.

1

The theory says that a company is only interested in the value of your work, and that cost of living is irrelevant. However in reality that is simply not the case, as the willingness of companies to pay different salaries for the same job in different locations attests. The truth is that companies want you to work for them in a specific location, and have to pay the appropriate rate for that location.

From an employee's point of view, if two companies are offering the same salary for the same work in two locations, but in one location the cost of living is higher, more people will take the low cost of living location (all else being equal). Companies know this, and realize they have to pay higher salaries to attract employees. This also results in salary differentials between locations.

So yes, it is absolutely worth mentioning high rents as a factor in salary negotiations, since it would be a factor in your decision to work for this company or not. Allow the company to understand that the same offer in a lower rent area would be more attractive to you than their offer in a high rent area. It may not be a huge factor, but mentioning it is not going to harm you.

Cost of living as a whole is probably a stronger argument, but rent is certainly a big factor in cost of living.

  • Of course salaries greatly differ depending on the region. To mention an extreme examle, San Francisco isn't Bangladesh, even if comparing exactly the same work. We all know that, they know that. I still believe it's nothing to mention in negotiations but simply something you have to decide on your own before you tell them what you want to earn. In your negotiations you're not competing with Bangladesh but only with other applicants for the same job offer. They all face the same conditions. Bring up what distinguishes you, everything else is irrelevant. – tln Jan 15 '17 at 21:39
  • I tried to make my question as clear as possible but I feared it might be misread as the same as this one. However, this is not the case. I am NOT referring to moving to a knowingly or reasonably high priced area just like San Francisco and expecting them to bend backwards for me. (continued...) – user58446 Jan 15 '17 at 22:48
  • ...Well, it is a bit like San Francisco in terms of its no secret its gonna be more expensive than normal, but imagine if rent in San Francisco all of a sudden exploded over the last several years for unexplained or hard-to-quanitfy reasons... an anomaly. There are several references to the phenomenon in local newspapers which I could reference... if appropriate (like the questions asks). – user58446 Jan 15 '17 at 22:49
  • I believe it doesn't matter what's in the newspaper. They will hire the applicant with the best value for money. Consider all possible scenarios you can think of and always wonder what makes the most sense for them, and you'll probably see the same. Economy is a lot about making good bets. This is a case where you have to make a bet too, it's none of their concern, they have their bets to make. One final question: Would there be any problem negotiating your salary again if your anomaly really happens? Is it going to be a contract with fixed conditions over a long period of time? – tln Jan 16 '17 at 20:55
  • Thanks for your input. It appears that regardless of what appears to be a "special situation", bringing this up may leave a bad impression. I'm still not sure why someone who is looking to move to a new area, who is doing proper research as they should, wouldn't mention this if there is a dispute with the numbers that the rent situation is throwing off; this seems to be the attitude of the other answers. I also realize that the company will continue to receive the same revenue from non-local clients assuming their clients are not entirely local. BTW: Thanks for understanding the question. – user58446 Jan 17 '17 at 2:40
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The only justification for your salary that your company is genuinely interested in is the value of your work. Nothing else matters and often leaves a bad and shallow impression when brought up nonetheless in negotiations. I advise against that.

If you want to work there, it's your responsibility to negotiate a package that makes sense to you, including your work contract, the rent you pay, the distance from your workplace, etc. Same is for the company: If they are there, it's their responsibility to be able to operate which includes to offer salaries that enough applicants want to accept with respect to the living conditions in the area. There's just no sense in any party complaining about anything from that field to justify their expectations in the contract.

The deal is "work for money and money for work", and that's what counts.

This being said, if they really want you, I see a possibility that you can suggest an agreement which links your salary to the average rent in the area with a certain factor. For instance your salary could be changed by 0.2% for each 1% change in the average rent, up and down, whatever happens. If they don't want you super much, such suggestion will weaken your position though because you'll be seen as complicated and difficult to handle.

In that case it's probably better to guess how long you'll want to work there (let's say 3 years), make an educated guess how much more the rents will increase in that period, and add that to the salary you demand. Either they say yes or no. Simple as that. If you finally want to work longer than 3 years there, you can negotiate again, but once again: The only justification for an increase in your salary will be your work, not the rents.

  • If a company moves to a high rent location, and its business doesn't allow paying employees decent wages that compensate for the high cost in that area, then the company is having a problem. – gnasher729 Jan 16 '17 at 20:27
  • Indeed. I'm having trouble too see why you added this comment under my answer though. – tln Jan 16 '17 at 20:38
  • If a company isn't taking relative cost of living into account when making an offer, it's not doing its own due diligence in hiring. A dev in Oklahoma City making 75k is not doing less work than one living in SF making 120k. – A. McDaniel Jan 20 '17 at 8:03

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