Had an interesting experience a few weeks ago, around compensation and salary.

One of my clients, who I do a placement or two a year with (so, not my bread & butter, but consistent, and I like them), liked one of my candidates. One thing they look for is information on salary history. I’m ambivalent about this, personally. There are way too many variables (start-ups pay very little, hedge funds overpay, women and minorities are often discriminated against, the candidate may/ probably will lie, etc etc). Still, they’re the client, and I go along up to a point.

All that said, this candidate refused to play. When I pressed him for some comp info, he said flat-out “what they pay for the role they have, should be based on the work that _needs_ to be done, not the work I have _already_ done. As long as the quality of my prior work is sound, they should make me a fair offer based on that, and go from there.” Even when I went for a “Fine, I get that – at what point should they walk away from making an offer? When to I tell them they’d be insulting you? What’s your bottom, bottom line?”, he refused to budge. Wanted to see what they had to say.

So: bravo. I love it. He must be underpaid, and he’s trying to change that. This is a negotiation technique, that if you’re feeling confident that you can get an offer, is a decent approach. It takes some stones, and the ability to miss an opportunity if they don’t blink, but it can keep you from getting “tethered” if you’re underpaid at your current employer.

By tethered, I mean you get tied to a salary and can’t get much more than that. IE, you’re making $85k, and you know that’s low. You tell your prospective employer this. You don’t know it, but they can go as high as $110k for this role. But, by telling them $85k, they’re going to come in as close to this number as they can when they make the offer. They’ll factor in a bump, generally, and some might say “I want him/ her to come in excited, so we’ll make it a nice bump”, but don’t expect – at best – more than 10%, or $94k. They may even come in much lower, around $90k, with the expectation they’ll have to go up to $94k. You’re tethered to that $85k.

By not giving a number, if they want you, they have to assume the worst: that you were making close to their cap of $110k, and they have to come in around there to get you. They may still come in low, but you’re room to negotiate isn’t tied to your current salary. It’s tied to their imagination, and that’s what you want.

So. The faux pas. After all this, the client came back and said $105k”. They thought it was fair, based on the work they needed done, it was a par with the rest of the team who were doing similar work, and they’d bought some salary surveys and they were slightly above the regional average as it was.

His response? “But… that’s less than I’m making now”. I’ll admit, I almost screamed at him right then.

The take-away, for me, is know what your work is worth. If you’re making more than most, don’t hide that all the way through. You may want to soft-peddle it a bit, or wait til later in the process, because it can scare some people off, but don’t hide it completely – you’ll shoot yourself in the foot. On the reverse, if you’re woefully underpaid, know you can get more, and go for it, you might try asking to get paid what they think you’re worth, not what somebody else thought about you.

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