How to tell if you're being realistic about what you should be earning Everyone is pinching pennies these days, including employers. Hiring freezes, lower salary offers to new hires and smaller raises for existing employees have become commonplace. The unfortunate effect of all of this, is that many workers will have to accept -- or at least consider accepting -- lower salaries than in the past. Still, taking a pay cut is a big deal. So how do you decide whether lowering you salary expectations will be beneficial to your job search or just a hindrance to achieving what you're really worth?
Unfortunately, the answer isn't clear cut, says Cheryl Palmer, a career coach and owner of Call To Career. "Many job seekers do not know what the market will bear, and as a result their expectations are out of sync," she says. "Some people arbitrarily decide that they will not take anything less than the salary that they made before being laid off. Others read or watch the news reports of the bad job market and decide that anything is better than nothing. Both of these approaches can lead to poor decision making because they are based on incomplete information."
In order to make an informed decision on whether or not your salary expectations are reasonable you must first research your industry and the salaries of others in comparable positions. "It is imperative that job seekers research salary information so that they know what is reasonable to expect for someone with their level of experience in the geographic location where they are looking for work, " Palmer says. Websites like CBSalary.com can provide information on average starting salaries for hundreds of different industries and positions. By finding out what the going rate is for skills like yours, you can be sure you're asking price is in line with that of your peers.
Your salary research will shed light on your job search in one of two ways. If you find that you are earning wages in line with others in your field, there is no need to make an adjustment. Asking for a salary below the industry average will not necessarily give you a competitive edge, and may in fact be a hindrance to getting hired; If your salary timeline shows a history of making more money than you are asking an employer for, the company may be afraid you will bolt as soon as a better offer comes along. As long as you're asking for a reasonable salary that is in line with the going rate for your position, there is no need to lowball yourself.
On the other hand, you may find out you are shooting too high: "If the median salary range in your region of the country and position is $75,000 to $85,000 and you have expectations of six-figure earnings, you will be disappointed," says J.T. Kirk, author of "Confessions of a Hiring Manager." If you find that you are making more than 20 percent above the industry average, you may want to reevaluate your asking price.
If you do find yourself in the latter category, the following factors should be considered before deciding to lower your salary requirement -- and by how much.
1. Urgency
"If there's less pressure to find something immediately, then [the jobseeker] may be able to stick closer to their ideal salary expectation, it just may take longer to find something," says Greg Masiewich of IQ Partners, a Canadian recruiting firm. "If someone needs [a job] immediately, then often lowering salary expectations will help them do that."
2. Competition
"An industry where there is a ton of competition and candidates are plentiful may result in people needing to lower salary expectations. If they're in a specialized industry where their skills are still in high demand, then they may not have to ... it comes back to supply and demand," Masiewich says
3. Benefits
Consider what extras -- like an excellent 401k plan, flexible scheduling or a family-friendly corporate culture -- are worth to you. Benefits can make up for a smaller salary.
4. Negotiation
"If someone does have to accept a lower level position or take a pay cut, I think they should try and negotiate an offer that contains some sort of pay for performance provision," advises Linda Duffy, president of Leadership Habitude. "If they can show the prospective employer their added value and help the employer achieve some specific goals, then they would receive a bonus or bump in base pay on a date certain. Not all companies are willing to make that deal, but it doesn't hurt to ask."
Additionally, if you have special skills, an advanced degree or experience at a name brand company, you may be able to negotiate a higher salary than those who don't.
5. Your bottom line
Although you may be willing to take a pay cut in order to get a new job, it's important to figure out your bottom line -- what you need to make in order to pay your bills and live comfortably -- before accepting a lower salary. If you accept too little money, you may find yourself unable to make ends meet or resentful of your low-pay, and you'll wind up looking for a new job all over again.
Ultimately, taking a pay cut is tough, and the decision to do so depends heavily on personal situation. Doing your research, figuring out your bottom line, and keeping an open mind will help you best determine your optimum salary.
