Monday, February 24, 2014
When you interview for a new job or are simply considering the possibility, the inevitable question of money will be a part of the conversation. Have you considered this? Most people will reply, “of course” -- but have you, really? How did you calculate that magic number, the figure in your head that you seek? How flexible or inflexible are you; is your expectation realistic? How badly you need a job is one factor and we can talk about variables all day long. The circumstances of the job is another factor, and those you won’t learn until after the first interview. I am strident in advising people to avoid as best they can being pinned down to a number in the first interview, but that is a whole other subject.
The purpose of this blog entry is not concerned with your chosen magic number, per se, but rather how you formulated the number you seek. For some folks it is more straight-forward and simple; if it is, for example, union scale or GS (General Schedule) you don’t have the flexibility of negotiating what you will earn as a part of the interview process; it is what it is. Likewise, entry-level people usually have little choice and have to take what they can get. However, for the majority, at some point during your career you can have some influence, so how can you determine the number you will seek?
Most of us use the number we have already been earning as a benchmark and seek to get the same or better amount when we change jobs. But the markets have changed, affecting some sectors more than others. And just as someone’s house may now be worth less than one may think, some people will find themselves in a similar situation regarding their earnings. Actually, it is not a new phenomenon; since the 1990s companies have been thinning middle-management ranks, right-sizing, down-sizing and so on. Newly-credentialed lawyers make less than those who’ve come before them; the financial crisis of a few years ago resulted in banks cutting loose a lot of people, consolidating functions and now one person might do what was previously done by three. While some may snicker about their misfortune, falling into the class envy trap, the middle and working class have not been spared either. So simply pulling a number out of the air, just because, might not help you when many are vying for one job.
Just as people sometimes focus too much on money rather than the opportunity itself, companies have a habit of focusing more on what a person earns rather than how much they might positively impact the company they seek to join. Consider this: if, during an interview, you’re asked how much money you want and they think it’s too high, they may not call you back; quote a number too low and you may be cheating yourself. In my book I discuss this quandary and detail what I find to be the best way to manage this topic during the interview process.
When I speak with someone I might represent for the first time, I always ask them if there was a job opportunity you liked everything about and the only question was money, what would A) you want to earn, and B) you need to earn? Taking some time to thoughtfully consider this number, the answer should evoke two different numbers. Put another way, there is a number that represents what you would like and want to earn to maintain a standard of living you seek. Then there is the number you cannot go below; the number you need to meet your expenses. What are those two numbers? Now you have something to work with and your goal should be to aim for something between that range.
Traditionally, the guidelines have been to ask for and assume a 20% pay increase with any new job, if you are currently working. However, that 20% mindset has been around for many years and is from a time when there were more jobs than qualified people to fill them. If you are not working, you have little leverage for more than you were already earning. And if you are taking your career in another direction, that is a whole other subject. I am not suggesting people shouldn’t pursue what they think they are worthy of getting paid in exchange for their abilities and experience, but referring to archaic guidelines, pulling numbers arbitrarily from thin air without thinking it through, might be counterproductive.
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