Hi Reader,

We held a free negotiations Q&A recently (if you missed it, we'll announce future ones here on our newsletter), and there's one question that comes up every single time:

"When a company asks me what my preferred salary is, what should I say?"

TLDR: don't give them a number or range. Let's dive deeper into this.

Be careful with early compensation questions

Sharing your preferred salary number will never help you, except in very rare edge cases.

Imagine that negotiations are like a game of cards, and the cards in your hand are your leverage. Your preferred salary number is a powerful card, and it’s hard to win the game by revealing it. The company has their own cards too, such as the “true max budget for this role” card, and they will never proactively reveal their cards either.

Note that in many US states, companies are mandated by law to share their salary range on job postings. These salary ranges are not truthful, as most companies follow the letter of the law but not the spirit of the law.

So if you share your number first, it will either:

• fall below the top of their budget. And they may agree to it, but you’ve now left money on the table, because the company knows that you’d be open to accepting less than what they’ve budgeted for.
• fall above the top of their budget. This introduces risk that they think you’re entitled, can’t afford you, or feel that you’re too far apart that you won’t be happy in the role even if you did accept. You’re a higher flight risk if you’re unhappy in the role, and companies want to hire people who will be there for the long term.

Some more reasons why sharing a number first is risky:

• Limits your bargaining power: If you share your number upfront, you may be limiting your bargaining power later in the negotiation process. Once you’ve disclosed your desired salary, the company may be less willing to negotiate higher than that figure.
• Lack of information: You may not have all the information you need to make an informed decision about your desired compensation until later in the interview process. By sharing a number upfront, you risk locking yourself into an end result based on incomplete information.
• Perception of being inflexible: If you share a number upfront, especially if it ends up being far above their budget, you may be perceived as inflexible or difficult to work with. This might not be the case, but perception can be just as important as reality in the hiring and negotiation process.
• Different compensation structures: Different companies may have different compensation structures, including stock options versus shares, vesting periods and cliffs, stock buyback windows, various bonus types, commission-based pay, and more. Sharing a number doesn’t necessarily capture these complexities, so you may be missing opportunities later to arrive at creative solutions that will make the offer worth accepting.

On that note, sharing a range is very similar to sharing a number, because when you share a range, you’re implying the bottom of your range is an acceptable amount to you. So we recommend not sharing a range either.

sharing a number first is risky

Even if you've done all your research and you believe your number is reasonable, you're still somewhat operating in the blind. This early on in the interview process, you probably don't have a sense of the company's priorities. Are they urgently trying to fill the role because they need someone to lead a big, upcoming product launch? Did they just close a massive funding round so are swimming in cash for new hires? Are they about to fundraise and want to show investors that their team is growing fast? All of these factors can influence how much more or less a company is willing to deviate from industry averages.

This is why we think spending a lot of time doing market research on compensation ranges is a waste of time. At the end of the day, every company will have their own internal reasons for how much they'll actually pay to fill an open seat at the time that you're applying.

To illustrate this point, sharing this case study of someone who was exploring working with us, and he continued to negotiate while he was still deciding whether he wanted our help. It started as a very promising interview process that seemed to be trending towards an offer, but unfortunately he made some mistakes on his own and the company decided to not move forward his candidacy.

One of the key things he did wrong was rely heavily on market research to drive his negotiation. When he shared a number, the company responded with incredulity, saying that even their senior leaders don't make that much. The vibes completely shifted south from that point on, and the company ultimately moved on.

do this instead of sharing a number first

If you’re asked for a number or range early on, tactfully deflect sharing it and instead say something like: “Thank you for asking! I’m currently focused on exploring that this is a mutually good fit. I’m confident we can align on compensation.”

There are many ways you can phrase deflections, and much of it depends on your unique circumstances, whether you’re in between jobs or currently working, the company culture, the demeanor of the recruiter, if you were referred, whether you have an existing relationship with the hiring manager or someone from the team, and more. You can book a free call with us to get specific tips for your situation.​

Warmly,

Gerta & Alex​
​Founders, YourNegotiations.com

P.S. Know someone interested in negotiations?

Send them our way and we’ll thank you with $250 for each person who becomes a client. No cap.

A quick intro or an email to alex@yournegotiations.com works.