How Employers Consider Your Previous Salary When Making an Offer

When it comes to job offers, one of the recurring questions is how employers view your previous salary. Understanding this can significantly enhance your negotiation skills and help you secure the best possible compensation. This article will delve into the various factors and considerations employers have in mind when evaluating your previous salary.

Understanding the Company's Salary Range

Employers typically have a set salary range within which they can comfortably offer a position, often known as the base range. This range is usually defined for specific roles and does not require approval from senior management. For instance, a role might have a base range of 24-28/hour without needing approval.

When Compensation Meets Expectations

If your desired salary aligns closely with the company's base range, they are more likely to offer it without any additional hurdles. This situation is straightforward for both parties. However, when the desired salary exceeds the base range, it's where things get interesting.

Negotiating Beyond the Base Range

If you were looking for a salary of 30/hour but the base range was 24-28/hour, the employer might need to seek approval from upper management. This decision is not made lightly, and the employer will need a compelling reason to justify the higher offer. It's crucial for you to provide a strong case for why you believe you deserve that salary, aligning it with your expertise, previous achievements, and the market rates.

Impact of Salary on Employee Fairness

A key consideration for employers is the fairness to other employees within the company. If your salary is significantly higher than the base rate, the employer might need to raise the base rate for other employees, leading to potential internal conflicts. This situation is delicate and requires careful handling both at the negotiation table and in the company’s internal dynamics.

Role of Employer's Previous Knowledge

Employers can and often do enquire about your previous salary before making an offer. This information is crucial for them to gauge your expectations and adjust the offer accordingly. If your previous salary was significantly higher, the employer might assume that your expectations are also high, which could swing the negotiation in their favor.

Impact of Low Previous Salary

Conversely, if your previous salary was considerably lower than what the new employer is willing to offer, they might consider it an opportunity to make a lowball offer. They may think that you may not have been fully responsible for the responsibilities carried out in your previous role or that their expectations align with your abilities.

Discussing Temporary Unemployment

When you were temporarily unemployed due to factors outside your control, such as your previous employer's business challenges, such as downsizing or mergers, it's important to tackle this issue thoughtfully. Employers may need reassurance that the skills you gained during the downtime are still relevant and valuable. Providing clear insights into any projects or initiatives you undertook during that period can help mitigate any negative perceptions.

Conclusion

Your previous salary can play a significant role in the job offer process, influencing both the offer and the negotiation spectrum. Employers must balance internal fairness, competitive market rates, and the specific needs of their organization. Understanding these dynamics can empower you to approach negotiations with more confidence and strategy.