Discussing compensation during interview can be tricky and treacherous, especially for executives. When is the appropriate time to discuss compensation during interview? Who should bring it up? How should the topic be bridged? Should I dodge compensation questions entirely?
Depending on your circumstances, the answers to these questions will vary. What remains a constant, however, is the risk of underselling yourself, pricing yourself out of the market or severely compromising your ability to negotiate your compensation package should you handle fair poorly.
As a general rule, you should go into interviews fully prepared to answer compensation-related questions, but with the end goal of keeping your responses high-level until you receive a job offer. However, if you really must bring up compensation earlier, or you encounter a hiring manager who consistently brings up the topic of compensation, here are four rules to live by to ensure you handle compensation questions professionally.
Know your rights
When it comes to handling compensation questions during interview, you need to know your legal rights. Some states have outlawed asking compensation questions entirely, so check your state’s or municipality’s law as to whether you should broach the subject. However, should the hiring manager be persistent in his questioning, even when it’s illegal, you have two options:
- Refuse to answer – If the question is illegal, it is within your right to refuse to answer. Back your refusal with a polite mention of the local laws.
- Give a range – Provide a broad compensation range based around similar roles. We discuss how to calculate your compensation range below.
Know your worth
Knowing your worth is essential to successful job offer negotiation, but can also put you in good stead for handling compensation questions during interview. As we’ll discuss shortly, you don’t want to enter into detailed discussions concerning compensation during interview. However, knowing your market value enables you to be able to provide a broad compensation range to the hiring manager should he/she inquire. It also helps you demonstrate value when answering competency-based interview questions. Undertake sufficient research prior to your interview to determine an acceptable compensation range for the position, your skills and experience. When devising your compensation range, consider the following factors:
- Your current compensation package, including bonus and benefits.
- The going rate for executives in similar positions within the industry.
- Current market conditions, both in your sector and wider economy.
- Whether you will need to relocate or make significant lifestyle changes.
- Your value add – the skills/knowledge/experience or network you bring.
Know your leverage
Ultimately, you should aim to defer all compensation-related discussions to the receipt of a formal job offer. Only then can you evaluate the job offer and ascertain whether the compensation package offered is in line with your requirements. You will then be in an informed position to decide whether to accept, negotiate or reject the job offer based on facts rather than hearsay.
It is worth noting that until you receive a formal job offer, the hiring authority will have leverage in any compensation negotiation. This is why it’s crucial to keep any compensation-related dialogue that might arise during interview at a high-level. At the very least, you want the hiring manager to leave the interview with a clear understanding of the skills, experience and competencies you bring to the table, not your compensation requirements. However, should the hiring manager be persistent in his questioning, you have three options available to you:
- Defer. Hiring authorities know what they’re willing to pay. Tell them that you’ll be willing to discuss salary once you receive an offer.
- Turn the question around. Enquire as to what the compensation range for the role is. If it fits with your expectations, say so!
- Provide a broad compensation range based on research. You should be able to gauge the salary range based on their response.
By refraining from discussing compensation during interview, you ensure you don’t distract from the value you bring to your potential employer. At the end of the day, until you prove your worth to the hiring manager, you are simply not in the running. Do your utmost to steer the interview away from compensation and towards the x-factors your bring to the tables.
If you really must know…
For those of you with an insatiable thirst for figures, there are a few steps you can take to ascertain the compensation range without loosing too much leverage during offer negotiation:
- Do your research: The job description/ad will usually state a compensation range. Check that first. Otherwise, if you dealt with a member of HR or were put forward by a recruiter or executive search consultant, they will likely know the compensation range on offer. Ask them. Utilise the resources around you to determine a ballpark compensation figure.
- Keep it high level. Final compensation is determined by the skills, experience and achievements that make you an excellent technical and cultural fit and differentiate you from your competition. You will never know the final compensation figure until you receive a job offer, so until then, seek to establish the compensation range and avoid going into detail.
- Time it right. Don’t bring up the topic prematurely. Be sure that you have demonstrated your value and why you are the best candidate for the role before discussing compensation.
If you decide to press for clarity on the compensation range during interview, do so tactfully. A question along the lines of “What compensation range could I expect if I were successful in the role?” will provide you with the reassurance you need without confining either party to specifics. Providing the answer matches your compensations requirements, state this fact without delving into detail. However, should the compensation range be off the mark, now might be a polite time to excuse yourself from the interview process and continue your executive job search.
For more job search advice tailored to senior managers and executives…
* Fraser Dove International is a talent consultancy operating exclusively across the life sciences industry. While our roots lie in executive search, we provide more than the traditional recruitment services. Uniquely placed within the market, we have been providing cutting-edge talent solutions and insight to organisations at all stages of their journey – from start-up to established leaders – since 2013.