Assess your skills according to what the market will bear, not by what your previous employer paid you. Name your price, and don't be coy
Job-seekers want to know: How do I price myself in this erratic job market? If I set my sights too high in the compensation department, I'll lose out on opportunities. If I price myself too modestly, I could leave money on the table—and worse, I could lose credibility with employers who won't value my skills any more highly than I value them myself.
The most common mistake job-seekers make is to price their skills based on their current or most recent comp level. If you're in a high-paying industry or company, your past or current salary could be the perfect measure of what you're worth in the market. But if you're not—if you've come from or are still working in one of the many companies paying below-market salaries—you'd be shooting yourself in the foot by relying on your past employer's assessment of your value. You can do a better job of pricing yourself, than that.
Homeowners use the Web site Zillow.com to gain intelligence about their house's value. Zillow uses tax records and home-sale data to arrive at house-by-house pricing estimates (called "Zestimates") that help homeowners make a value argument when nearby comparables are hard to come by. What's great about Zillow is that the longer the database continues to be populated with new datapoints, the more accurate it becomes.
Where to Look
Job-seekers need a Zillow of their own, to price their skills against the market and leave behind the tired "what my last company paid me" measure. Here are few tools to help the comp-befuddled get a sturdy comp number to guide them in their job-search travels:
GLASSDOOR.COM is something like Zillow for working people. It uses real-person input to arrive at salary estimates for various jobs as well as reviews of specific employers.
PAYSCALE.COM is another terrific source for job-by-job salary information, factoring into details such as your location, the school you graduated from, and how long you've been on the job. To receive your free report, you'll have to wade through a spammy page or two hawking online degree programs, but the information is good to have, whether you're job-seeking or just checking your market rate.
SALARY.COM is the hoariest of the online salary-data sites, with good information based on Zip Code and job title.
To supplement the online pay-level data you collect, it's a great idea to check in with a local headhunter or two to make sure your numbers fit the market and those of other candidates with similar backgrounds to yours.
Once you've got a number you are comfortable with, you can start to talk confidently with employers about your salary expectations. And you must: Don't plow through the interview process without having a brass-tacks compensation chat by the end of your second interview round. You've got something to sell, and you've got to share its cost, the same way your Realtor posts the listing price of your home on the multiple listing service. When you're selling a house, you can't take a buyer through the place, chat about the neighborhood, and then ask "What do you think it's worth?" You've got to name your price up front. It's the same way in a job search—coyness about compensation is not part of the deal.
Often, caught up in the "they like me!" vortex of a fast-moving interview stream, candidates think this way: "I really like what I'm learning about the job; I just hope it pays enough. I won't bring it up until they do, so that I don't seem too greedy." This is a bad way to proceed, because it sets you up to take a job that doesn't pay your rate. Once you've invested time and emotional energy in the selection process, you're at risk of making a bad decision rather than walking away. That's bad for your long-term earnings as well as your credibility.
Don't Play Cat-and-Mouse
Since you've taken the time to determine your market value, you've to state it—proclaim it, in fact—when you and a potential employer begin to discuss a job offer in earnest.
Some job-seekers play hard-to-get with their salary expectations, waiting for an employer to name its target pay range for a position. They do this so that in case their target pay requirement is $110K and the company has budgeted $115K for the position, once the company lays out its pay scale the candidate can position himself to collect every dime of it—forestalling the risk that the "extra" $5K will be left on the table.
In my view as a former HR exec, this is silly. The odds that your well-researched salary level is far off the mark are low, and the odds that it's off the mark on the low side are even lower. And besides, if you ask for $110K and get it, what's to be unhappy about? If your employer is the sort that values talent, all the better for you—there should be promotions and bonuses in your future. Rather than play cat-and-mouse with an employer over the issue of "who speaks first," I'd advise a job-seeker to say, at the second interview or the phone call inviting him to the second interview, "Shall we talk about comp ranges now? I'd hate to waste your time or mine if we're not in the ballpark with respect to the salary level."
With that entree, ninety-nine and a half out of 100 company reps will ask you, "So, how much are you looking for?" You'll name your number, and let the recruiter or hiring manager react. If you've done your homework, you shouldn't be far out of line from the company's own expectations. And if you're too rich for their blood, you wouldn't want to work there anyway.