Recently Dr. Robin Pinkley, Cox professor of management and operations, and Executive Education program instructor for Mastering Negotiations, received the following question from an MBA student.
“I wanted to see if you could provide some feedback on a tactic I’ve read about regarding compensation during early job interviews. The strategy is to postpone discussions about compensation until there’s enough interest to make a job offer. The justification is that in many cases, filtering candidates based solely on an expected base salary ends the conversation unnecessarily. There’s always room for negotiation, but when you’re put on the spot you’re forced to take a position. So far in two initial interviews with talent acquisition people, both have insisted on getting a number so eventually I’ve complied so I didn’t come across as difficult.
I wanted to see what your opinion is of this strategy, maybe there’s a better way to approach it?”
Here’s Dr. Pinkley’s advice:
In my book about negotiating salary and compensation,”Get Paid What You’re Worth: The Expert Negotiators Guide to Salary and Compensation,” and in a follow-up chapter in another book for candidates and corporate recruiters, I made the same recommendation regarding trying to sell yourself before discussing salary expectations (acknowledging of course that this was not always possible). However, I’ve recently changed my mind and subsequently my advice on this based on my very new research with coauthor Nazli Bhasia that we expect to change the way people negotiate for compensation and B2B sales in quite revolutionary ways. Let me explain.
Today most candidates are faced with exactly the scenario you’re experiencing – that is, that recruiters want to hear a number re “salary expectations” at the start of the interview process or even require that information in the application materials (online or not). For this reason, potential recruits MUST be prepared for this conversation before they submit their first application, much less accept their first interview. These expectations should be based on objective criteria concerning what one “wants to be paid’ instead of what one is “currently paid” which means obtaining market information for each job description, as well as, job title that one is applying for from multiple internet sources and all available contacts, networks, etc. Using this information, the candidate can then share their salary expectations in terms of a specific number (not range since that implies a bottom line and target) that one “hopes to get, is shooting, for, believes represents one’s likely worth” based on the market information that one has obtained for similar positions and given one’s education, skills, past performance, etc. relative to that market.
Our current research suggests that providing a bid such as one’s salary expectations (as anchor) before selling a buyer or recruiter on the value of the item being sold or providing an explanation (account) about why that number is reasonable, is much more beneficial than either providing JUST an anchor (salary request) or an explanation (account) before a salary request (anchor). That is, telling someone “how much you want” before telling them “why that amount is reasonable or why they should want what you are selling” actually results in their giving you more than any other strategy although that approach is counter intuitive.
Our research suggests that providing an anchor (first bid) before an account (explanation for that bid) is most beneficial for two reasons: 1) high first bids lead receivers to immediately start to search for positive anchor consistent information that supports the bid, leading them to move closer to the number given (so providing the bid first sets up the search and providing the explanation second provides the positive information supporting the number) and 2) until receivers hear a number they tend to ignore the information provided or create counterarguments, leading them to be less influenced by the bid when finally made. Thus they miss your pitch regarding your skills and abilities.
In reality it should be remembered that in both cases (bid-explanation and explanation-bid) it is important to sell yourself and explain why you bring value that justifies your salary requests. The point is that you will actually get more value from sharing your salary requests earlier rather than later and thus, need not be afraid to do so. In fact, the reality is that if your salary request is too high to keep you in the running for a job, this will be true regardless of when you state it. The only difference is that you will learn this earlier instead of later which is likely to be a good thing.
This strategy can be used to improve the receptiveness and benefits of bids in all contexts, including sales, and has the potential to significantly improve your bottom line in all contexts.
See more information on the upcoming Master Negotiations I program in April at http://www.smu.edu/Cox/ExecutiveEducation/ProfessionalDevelopment/Negotiations.