7 tips for answering an employer's financial expectations

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

For those who want to negotiate the most attractive amount.

Whatever the negotiation process when hiring a new job, at some point the employer will inevitably ask about your financial expectations. Your future income level depends on how correctly you present your wishes to him.

The most typical beginning of a dialogue on this topic looks like this:

- What are your financial expectations?

- 300 thousand.

Believe it or not, the candidate has just made seven mistakes at once, which will probably prevent him from agreeing on the highest possible income in a new job.

Let's figure out what these mistakes are and how to correctly communicate your salary expectations at the interview.

Tips on how to discuss finance with a prospective employer

1. Specify whether we are talking about salary or total income

When an employer asks a job seeker about his financial expectations, most candidates immediately transform it in their head into a question about salary - and answer exactly about it. Why this is bad, we will tell in paragraph 6, but now the advice is this:

When naming any amount, always specify what kind of money you are talking about.

If you mean salary, then formulate it this way: "My expectations in the form of a fixed salary are 300 thousand rubles."

This is useful, if only because it will not allow the employer so easily to pull off a favorite trick: verbally agreeing to your 300 thousand, and when the offer is released, break them into 200 thousand in the form of a salary and 100 thousand in the form of a non-guaranteed bonus based on the results of work. Let the interlocutor understand that by 300 thousand you mean exactly a fixed salary, not total income. Therefore, all bonuses and other goodies can only be on top of this salary, and not instead of part of it.

2. Give the exact amount

If you have voiced your expectations in the form of a certain amount, you are already great. And if the named number includes the stock for bargaining, then you are doubly well done.

Do not name the interval ("250-300 thousand"), because the employer always hears only a smaller number. For the same reason, do not use the format "starting from 270 thousand" - the company will give you just the very minimum, otherwise it will also haggle hard with you for it. Do not let us understand with our look and voice that the named amount is inconclusive and bargaining is possible. The employer will definitely catch this signal and use it.

Name a specific amount that is as ambitious as possible. And do it naturally, calmly and confidently.

3. Talk about a specific currency

Most candidates in Russia think of their salaries in rubles, but some (for example, those who have previously worked in international companies) can calculate it in dollars or euros. In the same way, most companies calculate salaries in rubles, but some may tie it to the currency equivalent.

If a job seeker is applying for a position in an international organization or abroad, it is not clear in what currency he will be paid. And the candidate can name the amount in the equivalent that seems to him the most logical, and the company - in the one in which it is customary to calculate the salary in a given country.

Negotiations where the job seeker and the employer speak different "foreign languages" usually end up awkward. The difference in approaches is discovered quite quickly, but the discussion has to start over.

Find out in what currency the company will pay for your work, and name your wishes in it: “300 thousand rubles”.

4. Specify: the amount before taxes or after

As a rule, job seekers name the salary that they would like to receive after tax deduction (net). But many others think of the "pre-tax" figures (gross).

It can be annoying when a candidate during negotiations meant the net amount, and the employer meant the gross amount - and this becomes clear at the very end of the negotiations. The difference of 13% (and for those whose income exceeds 5 million rubles a year, personal income tax from January 1, 2021 will be 15%) is quite noticeable, especially if calculated in annual terms. Therefore, from the very beginning, specify exactly what amount you are talking about: for example, "300 thousand rubles for hands."

5. Name the period

Most candidates and employers in Russia think about a monthly salary. And the labor market, for example, in the UK and the USA, thinks in terms of amounts per year.

No matter how you personally consider it, always tie the amount you call to a specific period: "300 thousand rubles a month" or "3.5 million a year."

6. Don't forget about the whole package

The mistake of many candidates is in an artificially narrowed view of their income, in which it is approximately equal to a fixed monthly salary. This is not true! Depending on the role and position of the employee, the salary can be 50% or 70% in the total compensation package.

Its other components can easily double your total income. The package may include:

• guaranteed bonuses and additional payments based on the results of work;
• incentive payments for attracting (sign-on bonus) or retaining an employee (retention bonus);
• bonuses for completing certain tasks;
• options;
• insurance;
• preferential terms or coverage of part of the cost of housing, transport, training, fitness, parking, communications, and so on.

By equating your financial expectations with a monthly salary and not asking for anything beyond that, you can lose a significant portion of your potential income. Therefore, think over the entire desired package in advance and ask for it in its entirety. Otherwise, you will literally live on one salary.

7. Justify the desired amount

Calling the amount of money without explaining the logic behind it, you make the interlocutor doubt this amount - asking questions about where it came from and why it is. These reflections work against you.

It is much more effective to briefly explain to the employer, before presenting the number, on what basis you came to him. You can refer to the high or unique value of your competence to the company; on the income of specialists of your level and their rarity on the market; for a responsible position, complex strategic tasks and a wide range of responsibilities; to your current income. And even (only carefully and tactfully!) For the availability of more attractive offers from other companies.

conclusions

To summarize the tips above, all seven components should be considered when discussing financial expectations and specifying an acceptable amount for you:

• category (salary or total income);
• exact number;
• currency;
• net or gross;
• period (month or year);
• other elements of the package;
• justification for the desired salary and other conditions.

For example, it may sound like this: “For such and such reasons (name the main ones) my financial expectations for this position are 300 thousand rubles per month in the form of a fixed salary, and also … (list other elements of the remuneration you are interested in)”.

Bonus: a useful exercise

What happens if you come to an interview with a monthly net amount in rubles, and the employer speaks to you in the language of annual gross amounts in dollars?

In the midst of negotiations, it is very uncomfortable to translate numbers into a different format. There is an awkward pause, the candidate frantically tries to recalculate the desired amount under the watchful eye of the employer, gets confused and confused. At this time, the interviewee's doubts about the validity of the applicant's expectations are rapidly growing and confidence in him is falling.

Prepare ahead of time. Make a simple sign and transfer the desired amount in all formats that you may need - and practice easily and naturally moving from one to another.

The salary

	Rubles, net	Rubles, gross	Dollars, net	Dollars, gross
Per month	300 thousand	345 thousand	3 820	4 400
In year	3.6 million	4.14 million	45 840	52 800

Total income

	Rubles, net	Rubles, gross	Dollars, net	Dollars, gross
Per month	400 thousand	460 thousand	5 100	5 860
In year	4.8 million	5.5 million	61 200	70 320

Do you want net amount in rubles per month? Please! Need a gross dollar number per year? Easily! A candidate who is confident in numbers and freely converts them from one format to another demonstrates preparedness and thoughtfulness of his expectations. And due to this, it strengthens its negotiating position and increases the trust of the employer.