Do You Know How Much You Make?
When searching for a new job these days, you will undoubtedly be asked what you are currently making and even what you were making in past positions. Occasionally when I ask this question I run into folks who try to take the high (and mighty) road and say that the position shouldn’t be based on past salary, but rather on the market rate for the given skills. Okay, nice sentiment, but your past salaries actually directly correlate to your skill level – and you know it. What this really says to a future employer is that you don’t trust them with this info, and that is never a good way to start a relationship.
So let’s say that you understand that salary history is part of the employment equation; but do you even know what you are / were making?
At this point, you are asking yourself, “How can someone not know what he/she makes? I just check my pay stub and it lays it all out for me.”
That simple stub can have benefits, bonus, and an assortment of other variables integrated into it. HR doesn’t want to know that you made a total of 100K last year when asking for your salary.
They are specifically asking about your BASE SALARY.
If you have a salary of $85K + 10% bonus + awesome benefits, your salary is still $85K. Of course, you can tell companies all this other information, but DO NOT LUMP IT ALL TOGETHER when asked about salary and say it is $100K. This makes you look bad on a number of levels. This could mean that you don’t understand the basic question, which means you’re not very sharp. Or, even worse, it could mean that you are not being 100% honest. This could cost you the job right there and, trust me, companies are conducting extensive salary and past-employment background checks as a part of the hiring process.
Now that you have figured out your base salary, it’s also important to understand your benefits. Figure out your annual benefits cost. If you have a family, you may be very aware of what you pay in healthcare insurance, for example, but some people assume, incorrectly, that every company charges the same for dependent coverage. And though the standard number of weeks of vacation is still two to start, this also varies by company from no firm vacation policy to 4 weeks to start. Benefits often constitute a difference of thousands of dollars so know your own and know those of your potential employer!
Finally: Bonus. It’s important to relay exactly how your bonus was paid out in the past. Was this a guaranteed 10% of salary, was it based on personal goals or was it company-performance based? Have you consistently gotten the entire bonus? Did it change while you were with a company?
All this boils down to honesty, attention to detail, and simple brain power – virtues every employer is looking for in a future hire.
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