Let’s start with a short story – I promise I’ll get to the salary part soon. I’m trying to sell a house. It belonged to my mother-in-law and it’s in another town. It’s paid off and costs little to keep, so we’ve been kind of stubborn about price slashing to get it sold. We received an offer for the house (it’s listed at $139,900) for $100,000. Now that’s quite a bit lower than what we wanted, so we made a counter offer of $125,000 (the market is pretty crappy right now after all). The buyer countered with $105,000. We came down to $120,000, our current bottom line. They said, “no way.” We came down to our bottomest line – $110,000. They came back with 108,500. We said, “no way.” Our realtor kept telling us that the market is awful, we should just take it and be happy, yada, yada, yada, but we held our ground. Anyone who’s going to nickel and dime you is going to keep doing so. In the real estate market, it’s a matter of who’s in the driver’s seat. Since it’s a seller’s market, right now they are. We were told that they buyer was simply going to bid on another house and we would lose out. We said, “fine, go ahead.” The next day, we got an offer for $112,000 from someone else. Sounds good, eh? But, now the original buyers really did want the house and came back with $115,000! Guess they were bluffing and we called them on it.
So, what’s all this got to do with your salary. Well first things first. If a company asks you what salary you’re looking for, tell them that it’s too soon to discuss that. You’d like to learn more about what’s entailed, what the total compensation package is, what the potential for growth and development is, etc.
Now the company you’ve interviewed with has decided that it wants you and it makes you an offer. They want you to be happy, but not so much that they break their budget. When you get an offer from a company, you must realize that it’s just that, an offer. The offer is not always final; it’s the beginning of a negotiation. There’s a lot to a job offer, after all. Vacation time, stock options, pay grade, as well as salary. Companies will often give you their first offer that’s below what they’re really willing to pay you. Feel free to counter their offer. You should be polite about this, but tell them that you’d like more. After all, you want to be totally committed to their organization and have several other companies who are interested in you, too. Visit a website like www.salary.com so you know what’s reasonable to ask in your field and in your geographical location. If you’re moving from the Midwest to California, for example, the cost of living is drastically different and so are the salaries. Ask for an extra week of vacation – telling them that of course, you won’t be using it for quite a while, as you are a hard worker. A higher pay grade won’t necessarily change your salary, but within companies, this can mean a bonus as a higher percentage of your salary, or more stock options that may be given on a yearly or more frequent basis. Additionally, companies strive to get their people moving towards the middle of their pay grade. If you start out as a junior, associate, or level one software engineer, the pay range for that grade might be $50,000 to $70,000. An offer of $60,000 already puts you in the middle. However, if you can convince them that your experience and potential warrants the pay grade of a staff or level two software engineer, the range for that might be $60,000 to $80,000, putting you at the bottom. Next year your company reorganizes and you have a new manager. At raise time, he looks at your salary and says, “Hmm, you do great work and you’re at the bottom of your pay grade, you deserve a good bump in salary. Oh, and since you’re at grade two instead of grade one, I can give you a better bonus, too.” Sweet.
One final word of advice. Like the house story above, you have to decide what your bottom line is. This may change depending on market conditions in your area, what the general economy is like, your other prospects, your possibility for growth with the company, the total package they offer, etc. Be nice, be knowledgeable, be confident, and you may get a better starting place with your new company.