When you are negotiating for your desired salary, it helps to know that you and your prospective employer are even in the same ballpark. In my recent Forbes post, I shared tips on how to avoid a lowball salary, and one of these is to stay away from companies whose salary expectations are unrealistically low. But how do you know whether a company can afford you? Here are five steps to take at the very beginning of your interactions with a prospect, so you don’t waste time on a company that isn’t able or willing to pay you what you’re worth:
Check your salary expectations against the general market
You are responsible for making a reasonable salary request. Reasonable doesn’t mean average. If you have a rare skill set, unique experience or special expertise, then you warrant an above-average salary. But you can’t expect to negotiate compensation too far out of the norms for your industry, geography and size of company. Use salary sites, such as Payscale.com, GetRaised.com and Guidestar.org (with Form 990 information for non-profits) to get a sense for market rates. Talk to recruiters and look at salary surveys from professional associations for additional market information.
Check salary sites for your target company
In addition to knowing the general market for your role, you want to look at your target company and their pay history. Use sites like Glassdoor.com which rate specific companies. If you’re a member of a professional association see if you can post a question to the group asking about specific companies (name a few if you don’t want to single out your target). You want to know if the company tends to pay at, below or above market. See if you can find out anything about how hard they negotiate – perhaps they tend to lowball but come up in the end.
Look at the company’s overall financial prospects
A company may be willing to pay but may not be able if they’re not doing well. You want to research your target company’s financials, not just for salary negotiation, but to ensure your overall job security! Look at revenues, market share, and growth over time. Look at press releases, company announcements, and business news for new initiatives and any potentially bad news (e.g., restructurings, office closings, products that aren’t selling).
Talk to company insiders
The best information will come from talking to people who know the company. This includes past and present associates of the company. By associates, of course I mean employees, but you can also get good information from consultants and other temps, vendors who sell to the company and clients that use the company. If you know people at competitors, they may have insight on how the company is doing. Recruiters who know the industry and better yet, who have worked specifically on assignments for the company, will know their current health and pay mentality. LinkedIn groups often include groups that are dedicated to alumni of specific companies, and this could be a good way to find people
Review your impression of the company so far
Finally, what does your experience so far with the company suggest about their willingness and ability to pay you? Have they asked about your compensation history or expectations? Have they shared specific details on your role, resources that would be available to you, any budget or P&L you would manage? If the company is already talking numbers, even if they haven’t yet shared their salary target, then at least you know they are serious about you. Most companies don’t interview just to waste people’s time. But if you’re not sure that the company can afford you (perhaps your pay is above market) then as soon as you know they are serious, ask for their budget for this role.
Vetting a company’s ability and willingness to pay is something entrepreneurs and freelancers/ consultants need to do as well. Of course, you don’t want to start talking money if mutual interest hasn’t been established, but once you are both clearly interested, if there is any doubt about affordability, talk money sooner than later.