How to Answer the Interview Question — "What Are Your Salary Expectations?"

For anyone appearing for a job interview, the toughest part is to negotiate the salary expectations question with the interviewer. For the applicant, it is most important to specify salary expectations during the hiring process. Depending upon the educational qualifications, work experience and other vital factors, candidates can initiate the process of negotiating their salary. While some organizations specify a fixed remuneration right from the beginning, some decide the salary depending upon the situation of the applicant. For example, for someone wanting to get out of a toxic workplace, a salary similar to his previous organization is acceptable however, for somebody who is satisfied with his present job but wants a drastic salary hike, salary expectation from the organization ought to be high. How to answer salary question in interview has to be well planned as it is the most crucial part of the overall discussion and of utmost importance to both employer and the candidate.

Here's what this article will cover:

  1. Why Candidates are asked this question?
  2. Why is the Question Important for Both Employers and Candidates?
  3. Why are salary-related questions tricky?
  4. How to determine how much you need to make
  5. How to Improve Your Chances of Getting an Offer
  6. How to negotiate a higher salary
  7. Common Problems When Answering salary expectations Question
  8. How to answer the salary expectations Question
  9. Best example answers for - "What Are Your Salary Expectations?"

Why Candidates are asked this question?

Organizations create job vacancies according to a certain budget. While some organizations specify the salary range in the job description, some like to create a package based upon the level and ability of the candidate. For example - if the HR manager feels that the candidate can add much more value to the company than required and it is something that will benefit them, he could offer a slightly higher salary to the candidate. As far as the candidate is concerned, it is all about how well you are able to market yourself.

Another reason for organizations to pose this question in front of candidates is to ensure that they are matching the requirements of the candidates. Moving forward, there has to be a symbiotic relationship being built between the candidate and the company. If the company cannot match the requirement of the candidate, this question helps them to screen and eliminate candidates and conduct a smoother process.

Why the Question is Important for Both Employers and Candidates?

Salary expectation question is important for the both employer and the employee. It is so because on one hand where the employee should get a fair remuneration for their contribution to the company, on the other hand the employer should not feel they are overpaying the employee. So it is better for both employer and the employee to discuss a fair salary at the very beginning of their professional association.

Why the employers ask for Salary Expectations

  • They have a budget. Employers cannot pay very high remuneration as the inflow of money to the company is also limited. In such a situation, they have got to set an upper limit to how much salary they can pay to employees.
  • They want to gauge how well you know your worth. Employers may have their own set amount of salary that they plan to pay to the employee. But they ask the Salary Expectation question to gauge what the employee thinks he/she is worth.
  • They want to determine whether you’re at the appropriate professional level. This could be challenging especially when professionals switch lines or shift from a government set up to a private one.

Why salary-related questions are tricky?

For individuals taking up jobs in the corporate world, questions such as "How is my pay determined?", "Am I being paid fairly?", "Why dont I make as much money as my boss or manager?", "Can I have a raise?", "When do I get a promotion or raise?" etc. are normal to arise and part of the journey. Since it could get difficult for the organization to answer these or even fulfill them right in the beginning, salary discussions must take place in great depth. These questions and discussions can be very tricky.

How to determine how much you need to make

  • Calculate your living expenses. One of the first steps to determine your Salary Needs is to calculate your living expenses. Savings shall come later, your pay needs to at least meet your monthly financial needs. Hence, it is important to calculate expenses such as food, clothing, medical expenses so on and so forth and  work out a figure that covers all these expenses.
  • Research how much others make in the same position. Study of people working in a similar position for a similar profile is important. To receive a market rate is important. This may not be one particular figure, which is okay. Note the range, and decide on a figure within the range.  
  • Determine the cost of living in your area. While some like to live in the suburban areas that are less expensive as compared to the city, some like to live in the hustle-bustle of the main city. Also, if there is a relocation being considered, it should be discussed well in advance.
  • Be honest with your salary expectations. After doing an in-depth analysis of the market rate, one needs to honestly workout one's correct salary. It is important to maintain ethics and be honest with your employer about the expected salary. 

How to Improve Your Chances of Getting an Offer

Provide a salary range that satisfies you instead of a concrete number. It is always better to provide a salary range rather than dictating a fixed number to the employer. This helps in providing some flexibility to the employer w.r.t. offering a salary to the employee.

  • Say that the salary is negotiable based on benefits. It is always a good idea to trade salary for some benefits. It leads to tax saving and even the employer doesn't psychologically feel as burdened to pay the complete salary in cash.
  • Let them know that you are flexible with the salary. Salary negotiation usually happens at the interview stage. Hence, it is important to be humble at such a time. Being flexible about salary doesn't harm at such a time. Providing a range of salary and further being flexible about salary always helps create a good impression on the employer.

How to negotiate a higher salary

  • Quoting a higher salary right from the beginning is a great strategy as it strongly reflects the attitude of the candidate providing a head start early in the process. While many organizations finalize salaries based upon the candidates more recent salary slip but starting with a high salary or asking for a 20-25% hike is an approach which is considered to be confident in the corporate world.
  • Irrespective of the brand of the organization or strength of the management, one should not undervalue his or her worth particularly during salary negotiation discussions.
  • Confidence is key in every move you make and in answering how to answer salary expectation questions.
  • Reasoning has to reach the management loud and clear. Once the candidate manages to explain his worth and what he actually can bring to the table for the organization, offering a higher salary is never a problem for the organization.
  • Showing aggression and being assertive on the salary part is a good strategy as it also shows your ability to handle clients and use aggression in discussions as and when required.
  • In a lot of cases, candidates are flexible about the salary part which is alright as long as you have a clear strategy in mind. For some, getting the right kind of work experience and learning something new can be of a higher priority than getting a high salary.
  • No matter what strategy one enters the salary discussion with, it is important to be polite and end things on a positive note. Researching the job role, goals of the organization and you as a fit are some of the important aspects to be considered.

Common Problems When Answering salary expectations Question

1. Timing of the interview salary question discussion: Early on, when the company is still interviewing many candidates and you have not reached the final round of interviews, do not bring up the salary discussion. If the interviewer mentions salary, it needs to be handled very tactfully. Before offering a number or range, you must have a sense of surety from the employer's end.

2. Going too low can also put you in a spot where you can’t afford to take the job, yet can’t afford to turn the job down. This is especially true for job candidates who offer low-end figures out of desperation and in hopes of getting the job. This rarely leads to a happy work situation. In such scenarios, you lose your worth and it could take double the amount of time to build a steady relationship with your boss.

There is nothing as a good or a bad answer when answering the 'what are your salary expectations' question. The interviewer wants to know the plans of the candidates that have applied for that particular role. In order to tackle the salary part well, it is good to choose a middle ground where you neither show yourself too free nor boast about a million career plans. For example, if you have applied for the role of a software engineer, a good way to answer your back up plan is to say that you could apply to different organizations for the same role. The interviewer may not agree to pay you a higher salary if you say that you do not have any other option other than the job you are applying for or give away a list of 10 things that you plan to do.

How to answer the salary expectations Question

  • It is absolutely alright to be a bit calculative during the salary negotiation discussion. Many employers appreciate the calculation of gross salary plus benefits including salary, medical insurance, life insurance and other advantages relevant to your professional industry. If you are considering relocation for the job or at some point in time during the job, it should be discussed in detail.
  • In start-ups or some bigger organizations, it is usually the HR manager who brings up the salary negotiation discussion. These are experts in convincing candidates to accept the job offer at a lower package. In such situations, it is a good idea to deflect the question and take it up as part of a follow-up email to the organization. In any case, it is always better if facts are discussed on pen and paper. How to answer salary expectations in email can be tricky but this strategy always works and helps you figure out the seriousness of the organisation with your candidacy.
  • Giving a range helps both the employer and the applicant. It is alright to specify the things you are considering while offering a range to the employer. Those factors are dependent on your previous salary, work experience, future goals and aspirations.

Best example answers for - "What Are Your Salary Expectations?"

1. Specify a fixed percentage of increase in salary from your previous company. For example - A 25% hike in salary for a similar role that has been calculated in alignment with experience and qualification.

2. Specify the salary bracket as per market standards.

3. “I really need more information about the job before we start to discuss salary. I’d like to postpone that discussion until later. Maybe you could tell me what is budgeted for the position, and how your commission structure works.” Such a response works well during the initial rounds of the interview when you are still conversing informally with your employer and haven't proved your worth as yet.

4. A good answer to push back the salary desired question on them is to try and know more about their salary structure and the process to review performance. It is important to seek all that information to be able to analyze their overall salary package.  

5. For those who want work experience at the organization, accepting the proposed salary is a good way to move forward. This clearly indicates to the employer the intention of the candidate, which is to learn.

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