If you’ve ever interviewed for a job you’ve probably been asked this question.  How do you answer it?  Should you answer it?  Should they even be asking?

It’s an important and controversial topic.  I recently read a great article by Liz Ryan (You can read here: What is your last salary?.  She’s a good follow on twitter as well @humanworkplace) who believes you should never have to tell a potential employer your salary.  I actually agree.  In theory.  Economics would suggest you are worth whatever a company is willing to pay.  Current salary has nothing to do with that.

Unfortunately it’s not practical.  Not yet.  With advocates like Liz maybe it will eventually happen.  For now, too many companies ask this question.  It’s not realistic to eliminate all of these companies from your search.  This question alone does not make them a bad company.  The person asking you the question probably has nothing to do with the decision to ask it.  But, that person can eliminate you from the process.  So why be difficult?  By refusing to share compensation you may be perceived as difficult and/or dishonest. What else aren’t you sharing?

I’m not advocating that you absolutely should share your salary.  I’m suggesting it’s best to learn how to navigate the process, as is, until it changes for the better.  I think it’s ok to politely decline once. But it’s not worth refusing if asked multiple times.  Why not?

Because it’s not even the most important question in this conversation.  What salary are you looking for in your next job?  That’s the tougher and riskier question.

The biggest risk with telling a company your current salary: They low ball your offer.  Guess what?  You can say no.  Ask for more.  There’s still a chance to land where you want or close to it.  At least you got to the offer stage.  If you start the process by refusing to share information and being difficult about it, you might get ruled out before even having the chance to negotiate an offer.

Soap Box:  Companies do need to take some of the responsibility here.  I can’t tell you how many times I’ve heard a client say “let’s just go with this number first and see if it works” knowing full well they have more to offer if the candidate asks.  There are certainly companies that have offered one amount when they would have offered $10k more if they thought the candidate was making more. (So why not exaggerate your salary?  For starters, it’s unethical.  Second, you risk pricing yourself out.  Either out of their range completely or just more than they are willing to pay for your specific skill set and experience level.  You might lose the chance to even get to the offer stage.)

Sharing specifically what salary you’re looking for, especially early in the process, is the bigger risk.  Especially if you don’t know the salary range they have in mind.  If you shoot too high, you might price yourself out and not even get a chance to move forward in the process.  If you go too low, not wanting to price yourself out, you might actually leave some money on the table. (tip: working with a good recruiter can prevent this)

So let’s role play.  No, not that kind!  Here we go:

Company:  What salary are you looking for in your next job?

You:  For me, it’s really more about the opportunity and finding the right fit.  I would need to learn more about the position, the team and growth opportunities to determine what an acceptable salary would be.”

The vast majority of the time, the interviewer moves on.  If not?

Company:  Can you at least give me a range so we can make sure we’re not wasting each other’s time?

You:  It’s just really tough to know for sure since there is still so much to learn.  But I’m making $60k now + 10% bonus.  I would probably be looking for something in the $70K to $90k range depending on bonus opportunity, cost of benefits, advancement opportunities, etc.  I have another interview next week as well so that could be a factor.

The odds of you jumping from $60k + Bonus to anything over $90k are slim to none.  $70k is safe b/c if there’s no bonus, that’s reasonable.  If there is bonus, you can adjust requirements accordingly.  You’ve provided enough caveats and a big enough range you should be able to move on from the conversation.  This isn’t avoiding the question.  It’s impossible at the beginning of the process to know for sure what salary you would accept. But it is reasonable for both sides to want to make sure they’re playing in the same ballpark.

The ideal world where you don’t have to tell companies what you’re making and only tell them what you want to make relies on a big assumption: people know what they are worth.  In my experience, that’s not always the case.  I would be willing to bet it’s not even normally the case.  I know there are websites that spit out this information.  These are ok tools for one data point in your process.  At the end of the day, your value in the market is what companies are willing to pay at a specific point in time.  There are factors outside of your experience that can be considered when a company puts together an offer.  How long has the position been open?  Is it a back fill or a new position?  Are you the first person they’ve met or the 10^th?  In theory these shouldn’t be factors.  But they will be.  For example, if a company extends an offer to the 3rd person they’ve met, they might not be interested in negotiating much if they have other good candidates in the pipeline ready to schedule for interviews.  If they’ve been looking for months?  There just might be more wiggle room.

Negotiation 101: Avoid providing a specific number for target salary.  Offer a fairly wide range.  Include some caveats in case the company references your conversation later in the process.  Don’t be dishonest.  Don’t be difficult.

Liz also suggests not sharing salary history with recruiters such as myself.  I can understand why.  There are inexperienced recruiters that might mishandle the information.  A good, experienced executive recruiter can be your best ally in the process.  There are plenty of situations where I can get someone a better offer than they would likely get on their own.  I’ll elaborate in a future post.

An equally important point is that you need to think about this before an interview.  Decide how you want to respond to these questions before you are asked.  In an interview setting it’s often more important how you communicate your answer, not what the answer actually is.  Be confident and concise yet reasonable and pleasant.

Now you know.  What say you?