What Is a Salary Range and How to Negotiate Your Salary

By Indeed Editorial Team

Published 13 December 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

When you review job postings or interview with a company, hiring managers might ask you to provide an expected salary. When determining your salary, it's a good practice to research the average salaries in your industry and factor in elements like your experience, education and location. Understanding how to price your skills can help you succeed during a salary negotiation. In this article, we define what a salary range is, explore the factors that affect it, describe how employers budget for employee expenses and explain how to negotiate your salary with hiring managers.

What is a salary range?

A salary range describes the minimum and maximum amount an employer is willing to pay when hiring an employee. Some companies include this in their job postings to manage the salary expectations of job candidates. For example, an employer may state they can offer a salary between $35,000 to $45,000 to the right candidate. Sometimes, job advertisements with transparent salaries can have a higher application rate.

Candidates can also communicate their expected salary to prospective employers. You can include your expected salary when you're writing your cover letter or during a job interview.

Job candidate vs. employer perspective

Although both job candidates and employers may provide their expected salary at the same time, they may do so for different reasons. Here's an overview of these differences:

Employer

If an employer provides an expected salary, their goal is to communicate the lowest and highest amount they can afford to pay you. The lowest is usually the starting pay for the employee. Companies usually offer this amount to candidates who have less experience. The highest is salary usually represents the higher end of their budget. Often, employers can't negotiate more than this value and may only consider exceeding their budget to accommodate top talent.

For example, if the employer offers a salary between $35,000 to 45,000 during an interview, this conveys their budget for the position. They may offer $35,000 to candidates with less experience and $45,000 to those with impressive qualifications. Companies may also offer other benefits to exceptional candidates, such as additional time off and larger bonuses.

Read more: What Are Compensation and Benefits? Definition and Importance

Candidate

Employers may also ask candidates about their ideal salary. This figure represents the compensation you believe you deserve and one that you might happily accept. It's important to have an ideal salary because it can influence whether you accept a company's job offer and your satisfaction with the role.

Factors that affect salary

Employees working in the same job position may receive different salaries. This is because employers adjust their budgets based on many factors. After they determine the base value of a position, they may revise the figure so that it best matches a candidate's background and experience. Factors that affect salary for different jobs include:

  • Years of experience: The greater your work experience, the greater the salary you can earn.

  • Education: If your education matches the requirements of the job, you can expect a higher salary. Other factors, such as graduating from a top university, can also influence your salary positively.

  • Performance reviews: Strong recommendations from your previous employers and references make you appear more credible. Thus, the employer can suggest a salary that suits your performance.

  • Skills and certifications: In some professions, such as accountant or engineer, having certifications from relevant professional organisations and trade associations can increase your earning potential.

  • Working condition: Usually, employers may offer higher salaries in jobs that require you to perform tasks under dangerous working conditions, such as handling hazardous chemicals in a laboratory.

  • Working hours: Some jobs may ask you to work night shifts. These jobs typically pay a higher salary because the working hours may affect your personal life.

How do employers determine their expected salary?

Aside from evaluating your qualifications and work experience, employers also conduct market research to ensure that they aren't overpaying or underpaying you. They also consider other internal factors, such as the company's budget and competition, to balance their expectations and candidates' expectations. Some human resource managers also assess the company's values and culture before deciding on your compensation package.

Salary benchmarking is the process of determining the ideal salary for an internal position by comparing it to similar job postings in the market. Companies gather salary information from various sources and compare data to calculate the average salary for specific roles within the organisation. The human resource manager may also compare their pay with that of their competitor's by using salary surveys and market pay assessments. This way, they can check whether their employee benefits are attractive in the overall job market.

Read more: A Complete Guide To Understanding Salary Benchmarking

How to negotiate your salary

Employers tend to discuss salary expectations during the final stages of the hiring process. If you feel you're worth more than what they're suggesting, you can consider further negotiating with them. Below are a few steps to help you negotiate your salary:

1. Do some research

Conducting comprehensive research online can ensure that you're negotiating an appropriate salary. You can try to use an online salary database, such as Indeed's Salary Search Tool, to get an idea of what other employees in similar positions earn. Doing some research in advance can help you negotiate a realistic figure. This way, you can show employers you're a reasonable and diligent professional.

Read more: How to Discuss Your Salary Expectations (With Example)

2. Analyse and understand your value

Before negotiating your salary, try to understand the value you add to an organisation. Answer these questions to convince the interviewer of why you deserve a certain salary:

  • What are your professional skills that can help the company?

  • What are your unique skills that others don't have?

  • What is your experience in the related field?

Be honest when mentioning your achievements. Prepare answers to these questions to help you feel more confident in front of an interviewer. During this stage, you can also use your marketing and negotiation skills to increase your chances of success.

3. Determine your expected salary

After you have done some research and understood your value, you can determine your expected salary. Start with your ideal compensation amount and use this as the mid-point during your negotiation. Make sure your minimum amount is enough to keep you financially stable and your maximum amount is realistic.

Once you've determined this range, present this information to the hiring manager with confidence. If they seem hesitant, explain why you believe you deserve this amount.

4. Negotiate additional benefits

Sometimes an HR manager may not offer you exactly what you proposed during the negotiation. If this is the case, you can negotiate for a better salary package, such as additional bonuses, more paid holidays, flexible work hours or paid training. When negotiating your benefits, think about what's more valuable to you. For example, if flexible working hours are more important to you, try to emphasise this during your negotiation.

Consider asking the company about when they conduct salary reviews. Once you have proven your work ethic on the job, you can consider renegotiating your salary.

Read more: 10 Important Negotiation Skills: Examples and Tips

5. Show your gratitude and appreciation

Once you come to an agreement with your prospective employer, express your appreciation for the role and their generous salary offer. Since you might work with them every day, it's best to start your relationship on professional terms. If you're meeting in person, shake their hand and thank them for their time and offer.

Tips for a successful salary negotiation

Here are a few tips that can help you succeed in your salary negotiation:

  • Negotiate at the right time. The best time for salary negotiation is after you receive a job offer or during the final interview stage.

  • Negotiate not only money but also other benefits. Consider negotiating for additional bonuses, more paid holidays, flexible work hours or paid training.

  • Use data and figures to support your achievements. To emphasise your value as a professional, use statistics to communicate your achievements during an interview. For example, if you're a content manager, you can say, "Overall, my team increased follower engagement by 80% and sales revenue by 200%."

  • Be confident and professional. When you speak with confidence, the hiring manager is more likely to trust in your ability to do the job. Explain your points and your expected salary clearly.

  • Practise your points before the actual negotiation. Write your points on paper and rehearse your negotiation skills in front of a mirror. You can also role-play a salary negotiation with a friend and improve your skills by gaining their advice.

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