Do your research first

Enter any conversations about salary expectations with an acceptable range in mind. Before bringing up compensation with a job candidate, take some time to evaluate a number of relevant factors that could help you determine a fair and attractive pay range.

• Look into what other businesses are offering for similar roles if you’re interested in providing competitive pay. Human resources professionals define competitive pay as being within 10% of the market average for a job title.
• Consider where the employee will be located and that area’s cost-of-living expenses that could come into play. The same job title could call for a much different salary if the employee is based in a major city compared to a small town.
• Determine the level of experience you’re looking for in an employee and think about how that may influence their compensation expectations. Are you interested in a more junior employee that has plenty of room to grow, or are you searching for a more seasoned professional with years of wisdom to call upon? Perhaps you are interested in finding someone that falls in the middle. Having a clear picture will help you feel more secure about the salary you can offer and be more realistic about the kinds of numbers candidates may come to you with.
• Remember that “compensation” can refer to more than just salary. Think about benefits that might make a future offer more attractive to a job candidate. Will you consider offering more flexibility or additional time off? Are you able to provide discounts or other perks that could improve your employees’ quality of life?

Know when to ask about salary expectations

Yes, broaching the topic of salary is important early in the hiring process, but you should still be thoughtful in the lead-up to the conversation.

• Asking about salary expectations usually makes sense once you’ve finished with other more qualitative interview questions.
• Through your questions and answers, do your best to give the candidate a full picture of what the job entails so that they have a good idea of the scope of the role and what their day-to-day might look like — that knowledge will help inform their salary expectations.
• Evaluate if you want to continue the hiring process with the candidate in question — if not, you may not need to address the topic of salary.

Have a bank of potential questions ready

Once you’ve reached a point in the conversation where discussing salary feels appropriate, consider the rapport you’ve developed with the candidate, what you know about their personality, experience and goals, then choose the tone and approach you want to take.

• If the candidate seems straightforward and businesslike, don’t be afraid to ask simply and outright: “What are your salary expectations?” This indicates that you’re eager to move the process along and that you value the candidate’s time.
• If the candidate communicates or implies that they are unsure if they want to leave their current role, you might phrase the question more like this: “Where do you need to be in terms of salary?” This shows that you understand that the salary range might be one of the more important deciding factors for them in the interview process.
• If you’re open to negotiations, you might choose to structure the question like this: “The salary I have in mind for this role is $XXX. Is that in line with what you were thinking?” This offers an opening for more of a back-and-forth discussion.
• If you’re firm on the number you have in mind, it’s best to be up front with a statement like this: “The maximum salary we are willing to offer for this role is $XXX. Knowing that, let me know if you’d like to discuss any next steps in the interview process.” In so many words, it communicates that the salary is essentially set in stone.

Prepare yourself for various outcomes

Okay, you’ve done it — you’ve asked the question! But, of course, the conversation doesn’t end there. There’s no way to know exactly how the candidate might respond when you bring up compensation expectations, so it can be helpful to ask yourself some questions about how you might handle different outcomes before the conversation even begins.

• The candidate may not be open to discussing salary at the time. Would you want to proceed with the process if that occurs?
• The candidate could bring up a number that’s much higher than what you had in mind. How will you navigate that conversation? Are there other perks or benefits you could mention that might move them closer to the salary you’re able to offer?
• The candidate could mention a salary that’s much lower than what you had in mind. Will you still mention the number you were thinking of offering to stay competitive, or will you stick with the number the candidate stated?
• The candidate may want to take time to think about the salary you brought up before moving forward. Would you be willing to give them that time, or would you rather move on to other candidates?

Know that it might not be a one-and-done conversation

Even if you leave the initial discussion about compensation feeling like you’re on the same page as the candidate, if you move forward in the hiring process, you will likely need to discuss salary again once you reach the offer stage. At that point, there is always the potential for a candidate to want to renegotiate the offer. It is prudent to be prepared for that scenario and to have a maximum amount in mind that you will not be willing to go beyond. Also, have any other appealing benefits you might be able to offer in mind, such as a flexible schedule, more vacation time, the ability to work remotely, stock options, transportation reimbursements, educational opportunities, parental leave, student loan repayment assistance or anything else specific to your business or the role in question.

These kinds of conversations can seem daunting at first, but the more you have them, the easier they will be to navigate. If you come into discussions about compensation expectations prepared with relevant research and prompts to guide the conversation according to the candidate you’re speaking with, the process is more likely to run smoothly for you both.