Why Do Recruiters Ask for Your Salary Expectations?
Learn why recruiters inquire about your salary expectations early in the hiring process and get expert tips on how to respond strategically to land the compensation you deserve.
Have you ever felt caught off guard when a recruiter asks about your salary expectations in an initial screening call? It's a common question that can spark anxiety for job seekers. Will you aim too high and take yourself out of the running? Or lowball yourself and leave money on the table?
Contrary to popular belief, recruiters aren't trying to trap you into accepting a lowball salary when they discuss compensation early on. In fact, there are several important reasons why they need to discuss money upfront that have nothing to do with sticking you with an unfair offer.
Before you jump in with "They should list the salary range in the advert," I agree, it would totally help. But, many companies still play it close to the chest, often talking about total compensation without getting too specific. So, everyone ends up aiming for that dream number, like $234K, and a lot of folks end up disappointed when the offer falls short.
This range can sometimes set the wrong expectations if the company doesn't spell out what's included. I had a client once who wanted to bump up from $100K to $120K. They passed on an offer of $135K because it wasn’t the $195K they had in mind, all because the advertised range for the role they wanted was $125-$195K.
Discussing salaries and the negotiation process can be quite intricate, especially if you are moving abroad. The ideal scenario?
Both sides being super transparent about what they're expecting and offering. But since we're not quite there yet, let's dive into what's really going through recruiters' minds when they pop the salary expectation question.
Why Recruiters Need to Discuss Salary Upfront
For recruiters, broaching the subject of compensation right off the bat isn't about putting you on the spot or pressuring you to commit to a lowball offer. It's a crucial step in determining whether it makes sense to move forward with your candidacy.
Here are the three main reasons recruiters feel the need to address salary early on:
1. Ensuring alignment between candidate expectations and predetermined salary ranges
Most companies have strict compensation bands (salary ranges) in place for each position based on factors like job level, department, and location. These salary ranges aren't always advertised publicly. Recruiters are tasked with identifying candidates whose expectations fall within the predetermined range for the role.
By getting a sense of your salary expectations early, recruiters can quickly determine if there's a potential match before investing significant time in your candidacy.
No one wants to waste their time going through rounds of interviews only to discover an insurmountable gap between what you want and what the company can offer. Having the salary chat upfront saves everyone precious time and energy!
2. Gathering market data on current compensation rates
Your candid feedback about your salary expectations and current earnings (if you choose to share them, I recommend not sharing your current salary!) helps recruiters gather valuable data points about the going rate for professionals in your field and experience level. This information contributes to the recruiter's overall market knowledge.
While your salary expectations might not exactly change the company's budget for the role, sharing them gives recruiters a peek into the competitive scene. They can then use this info to guide hiring managers and push for salary ranges that'll draw in top talent like you.
3. Establishing a baseline for offer negotiation
Your initial salary expectations will likely come into play again as a jumping-off point for offer negotiations. Recruiters will often refer back to the range you shared in that first screener to craft a competitive offer.
Keep in mind that your stated salary expectations are not set in stone. It's very common for your expectations to shift as you learn more about the full scope of the role and the company's benefits package. If you realize that your initial range was off-base, it is completely acceptable to have an honest discussion with the recruiter about your updated expectations before the offer stage.
The key point here is that recruiters ask the salary question early to make sure everyone is on the same page and to avoid wasting anyone's time if there's a big discrepancy in compensation expectations. It's not a gotcha tactic or an attempt to trap you into accepting less than you're worth.
Debunking the "Lowball Myth"
A pervasive misconception among job seekers is that recruiters inquire about salary expectations in order to pressure you into accepting the lowest possible offer. This cynical view paints recruiters as master manipulators dead set on tricking you out of fair compensation. But the lowball myth simply doesn't hold water when you examine the incentives at play.
Let's start with agency recruiters, who are hired by companies to fill open roles. Agency recruiters typically earn a commission calculated as a percentage of the candidate's starting salary (20-30% of the annual salary). The higher your salary, the bigger their paycheck. Therefore, it's in their best financial interest to help you secure the highest possible offer.
Put yourself in an agency recruiter's shoes. If they know you're willing to accept a $100k salary but believe you could reasonably command $150k based on your skills and experience, why would they try to convince you to take the lower offer? They would be leaving money on the table for you and for themselves. It simply doesn't make sense. Also, the salary offered to the candidate comes from the company, not the recruitment agency.
Now, let's consider in-house corporate recruiters, whose compensation isn't directly tied to candidates' starting salaries. You might assume they are more motivated to lowball since they are loyal to the company's bottom line. But that argument falls apart when you consider corporate recruiters' ultimate goal: to fill roles with candidates who will thrive long-term.
A short-sighted recruiter might pressure a candidate into accepting a lowball offer, only to have that person jump ship a few months later for a better paying gig. This creates more work for the recruiter, damages their credibility, and hurts the company's employment brand. It's a lose-lose situation.
In contrast, an effective corporate recruiter aims to fill roles with candidates who are not only qualified but also fairly compensated according to market rates and internal equity. When a new hire feels valued from the start, they're more likely to stick around, saving the recruiter from having to repeat the hiring process again and again. They'll also tell their friends and colleagues about the company, which helps recruiters fill other roles too.
But what about companies that have strict salary bands they can't exceed? Surely those recruiters will use every trick in the book to keep your expectations in check, right? Not exactly. Even in those cases, it's in the recruiter's interest to shoot straight with you.
Most recruiters know that if your expectations are significantly higher than the set salary band, it's better to be transparent about it upfront rather than wasting time selling you on a role you'd never accept. That's why they're asking about your salary expectations right from the start, even during the prescreening call. They might even toss around some alternative opportunities that align better with what you're aiming to earn.
The moral of the story is that the majority of recruiters aren't out to lowball you when they ask about salary expectations. Their goals are to determine fit, fill roles with the right people, and ideally help you get the best possible offer within the company's constraints.
If you get an offer that's below what you were hoping for, it's usually because the hiring manager or team sees your skills at that level. It's not the recruiters pushing for a lower salary; they're just the messengers!
How to Approach the Salary Expectations Question
Now that you know recruiters aren't out to get you when they ask about salary, how do you actually answer the question in a way that serves your interests? Here are some practical tips to keep in mind:
1. It's okay to defer if you need more info about the role first
If a recruiter springs the salary question on you before you have a solid understanding of the role's responsibilities and expectations, it's perfectly acceptable to say something like, "I'd like to learn more about the scope of the position and how my skills and experience align with your needs before I can give you a precise salary expectation. Can we revisit this topic after I've had a chance to chat with the hiring manager?"
Most recruiters will respect your desire to gather more intel before throwing out a number. Just make sure you actually circle back to the conversation at a later date, or the recruiter may assume you're trying to dodge the question altogether.
Of course, you need to understand that if you decide to postpone the discussion and the recruiter forgets to follow up, you might go through all the interviews and receive an offer at the end that is not within the range you desire.
2. You're not obligated to disclose your current earnings
In some jurisdictions (states, countries), it's actually illegal for recruiters to ask about your salary history. Even if you're not protected by such laws, you're never under any obligation to reveal your current earnings to a prospective employer.
If a recruiter pushes you to disclose your salary, politely but firmly redirect the conversation to your salary expectations for the new role, not your past earnings. You can say something like, "I keep my personal salary history private, but based on my research and experience level, I'm looking for a salary in the range of $X to $Y for this type of role. Does that align with your company's budget?"
3. Share a desired range based on research and your value
Speaking of research, it's crucial to come prepared with a realistic salary range based on market data and your unique value proposition. Use online salary tools, industry surveys, and insights from your professional network to gauge the going rate for similar roles in your area.
When you share your desired salary range, make sure to focus on your worth in the market, not just your personal needs or past earnings. Emphasize how your specific skills, experience, and achievements will drive results for the company and justify your target salary.
One word of caution: Avoid stating a hard minimum, as in "I absolutely won't accept anything less than $X." This can come off as adversarial and limits your room to negotiate later if other aspects of the offer, like equity or benefits, could make up for a lower base salary.
4. Ask questions to understand the company's compensation philosophy
Remember, discussing salary expectations is a two-way street. Use it as an opportunity to gather intel about how the company approaches compensation.
Ask questions like, "What is your budget or typical salary range for this role?" or "Beyond base salary, what other elements make up your total rewards package?" Their answers will give you a clearer picture of whether the company's compensation philosophy aligns with your values and needs.
Recruiters may have some wiggle room to go above the high end of the range for a truly exceptional candidate. So don't automatically write off an opportunity just because your stated expectations are slightly above their initial range.
Also, don't forget to look at the total comp package because, overall, your salary might be way higher once you factor in yearly bonuses (or other bonuses), stock options, and future career opportunities within the company.
I had this client once who couldn’t decide between three job offers. He ended up going for the one with a lower base salary but more shares. Thanks to the company's performance, he made 4 million USD in shares over four years. Of course, this doesn’t happen for everyone, but take NVIDIA as an example - 76% of NVIDIA employees are millionaires.
Sometimes, you just get lucky and land at an awesome company where you can earn more, even with a lower base salary.
Your Salary Expectations
The key to successful salary negotiations lies in framing these discussions as collaborative explorations of fit rather than adversarial power struggles. It's crucial to approach these conversations with transparency, sharing your salary expectations and the rationale behind them in a clear and confident manner.
At the same time, maintaining an open mind and a willingness to understand the company's perspective is equally important. By doing so, you can ensure a dialogue that respects both your value as a professional and the constraints or opportunities the company may face, leading to a more productive and satisfying outcome for both parties.
The Secret to Uncovering Salary Ranges When Companies Stay Tight-Lipped
Tired of guessing salary ranges for job openings? Learn how to uncover what recruiters know, even when companies keep compensation details secret.
Many companies keep salary information private, often to stay competitive or avoid setting unrealistic expectations. However, you don't have to be in the dark when talking about salary with recruiters. Use these tactful techniques to learn about a company's salary ranges without seeming pushy.