Salary increase when switching jobs

Archived From: Finance
  • Page :
  • 1
  • Text Only
Voting History
rated:
I have an interview coming up and undoubtedly salary will come up. Obviously, I do not know yet if they will even give me an offer or not, but to be prepared, what kind of percentage increase in salary is normal?

Some background:
  • current salary: ~100k (base)
  • industry: semiconductors
  • experience: 5 years
  • education: phd
  • company info: moving from one well known company to another (i.e., big, international, billions of dollars in revenue for each company).

I would like 20%. But is that being greedy? I think that 12-15% increase is fair (moving to new company so vacation balance drops to 0 days, have to start from the bottom and build back up, new management, etc.). Is there some "rule of thumb" percentage I should target? Does the current economic condition change things (even though I know the company is making a very healthy profit)? I also know that they really need to fill this position... And I also don't have to leave my current position (though I want to).

When negotiating salary, should I be bringing up my current base? Any other tips/suggestions?

Thanks!

Update:

Well, I ended up getting a 13% increase in salary. They wouldn't budge. After bonus, the end total cash will be about 30% more than total cash I make right now. So maybe not so bad after all. Thanks for all the input.

Member Summary
Most Recent Posts
Before I took a previous job I had to deal with a real S.O.B. HR guy who did not believe me when i told him how much I m... (more)

mryan (Oct. 02, 2008 @ 3:41p) |

If you are making a lateral move from one company to another in the same industry, it'd better be a lucrative deal other... (more)

aeinstein (Oct. 02, 2008 @ 6:01p) |

I've had applicants say, "I'd rather not disclose my current salary. Please determine what you think I'm worth to your ... (more)

Xnarg (Oct. 02, 2008 @ 7:17p) |

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.
Thanks for visiting FatWallet.com. Join for free to remove this ad.

20% is not greedy imo.

Figure out how much your peers are getting paid by going to glassdoor.com & payscale.com .

Ask for 10% more.

IMHO, depending on where in the country you live you may be significantly underpaid.

Finally, don't forget to negotiate on vacation. Make sure you don't lose the weeks per year of vacation you've accumulated by 5 years at your current position.

Go to indeed.com and research average salaries for the title of the position you are applying for. And make sure you input the right location info. Also check monster.com's salary center on the same title or a title with similar experience/education level. Your expectation will have to be within 10% neighborhood of that average salary. Especially, for large companies, HR has a tight leash on things, therefore salaries are fairly standardized and negotiation is very difficult.

Why don't you ask them saying "what salary range do you have in mind?"?

Nothing is greedy as long as it is the going market rate in that area/industry/company.

Remember, the new employers don't necessarily know your current situation. A 20% percent "increase" from your perspective has no meaning in the new company. You may have been underpaid or overpaid in your current job. The job responsibilities may be slightly different. The new company may be in a desperate need of your expertise, so they would be willing to sweeten the deal. The companies may be in a different location with different cost of living. Plus the benefits (vaca, health ins, bonuses, etc) may be different, which makes the salary piece of the overall package more or less relevant.

My personal philosophy is not to disclose the salary expectations right away. Tell them that you trust the company of their stature to make an offer in line with the going job market rate and you would give such an offer most serious consideration. The further you go in the interview process, the more likely they are to be accommodating with your compensation request and reaching into the upper limit of their range. Make them make the first offer. You are in a good negotiation position, because you can walk away and don't have to get the new job. And judging from the description, your job is not the kind that will bring busloads of applicants from Monster.

At minimum, 20%.

There really is no "normal" salary increase for switching jobs.

Some people switch jobs for less money initially because of the opportunity, or because they hate their current position, or they think their current employer is going down the tubes.

Some people switch jobs for 50-100% more pay.

Your current salary has no bearing on what a new employer should or would like to pay you. I would not only not bring it up, I would avoid supplying the info if asked directly. There's an excellent chance your current employer had you sign a broad NDA, and it may very well specifically include compensation information as part of what you agreed not to share. It would be very valuable information to a competitor.

So I would probably use that as a reason to deflect the question, along with some of the good advice above to encourage the new company to make the first offer.

Of course, if you want to negotiate on their proposal, general comparison to your current compensation could be useful, and I wouldn't worry too much about the hypothetical and possibly unenforcable NDA I mentioned.

20% is too much, semis are cutting back in expenses and end producers have been downgraded to fit the lack of expended spending.

Do you have an employment contract? are you expendable? Say you're more concerned that the industry is slowing down and loyal to the company. Instead of on a pay increase would they extend an employment contract to give you piece of mind to focus on your work.

THEN LATER hit them for a modest increase.

The assumption that there is a set percentage of raise is based on the premise that the old salary was right, the industry has a rigid salary scale, the worker is going to be doing basically the same job, and that there is some magic formula for new salaries when changing jobs.

Clearly, a wage earner may have been underpaid or overpaid in the old job. Or he may have found the perfect fit for his skills, in which he can earn much more.

The prior employer may have had a different salary strategy, too.

There really is no "one-size fits all" salary increase formula.

assuming you are at least ok with your current job, I wouldn't consider moving for anything less than 20%. There are lots of unknowns moving, if money is your only motivation for moving, it should be enough to make up for a taking a hit in one area or another.

Your new boss might stink. Advances might be harder to get. Stuff like that.

I've gotten 20% in the past. I got 40% at one point, but that was coming off a $48k salary two years after college so I'm not sure if it counts. I also gave back about 25% of that 8 months later when the company went bankrupt in the dot-com boom.

If you ask for $xx and you're immediately taken up on your offer then you didn't ask for enough.

DON'T depend on being able to lowball yourself into the job and then make it up with a raise later. That almost never works. I got stuck in a job making considerably less than I could have because I make the mistake of not researching the situation and asked for less than the going rate. It took me two years to get back to where I should have been from the start.

Raises come much more slowly at most companies once you're already in the door, and are almost always percentage-based. So, if you start off too low, subsequent raises will only compound the situation. A few places will give you "catch-up" raises if you're significantly below the market rate, but that's rare.

Singh,
i'm retired from a career in the semiconductor industry where i was in technical and business management at several companies. although several posters noted that what you're worth to the new employer should not be based on what your present salary is, invariably that is what happens in this industry. HR will ask you what your present salary is, and then make you an offer pretty much around 15% more. you may get a bit more upon negotiation, but from my experience on the hiring side, the salary offer will not change much if any, although you may get more in your signup bonus (you should get that). also you should get relocation expenses if moving out of state.

only if your field is really specialized, with really scarce talent, could you get more. digital designers, for example, are not that scarce.

thok said: I've gotten 20% in the past. I got 40% at one point, but that was coming off a $48k salary two years after college so I'm not sure if it counts. I also gave back about 25% of that 8 months later when the company went bankrupt in the dot-com boom.

If you ask for $xx and you're immediately taken up on your offer then you didn't ask for enough.

DON'T depend on being able to lowball yourself into the job and then make it up with a raise later. That almost never works. I got stuck in a job making considerably less than I could have because I make the mistake of not researching the situation and asked for less than the going rate. It took me two years to get back to where I should have been from the start.

Raises come much more slowly at most companies once you're already in the door, and are almost always percentage-based. So, if you start off too low, subsequent raises will only compound the situation. A few places will give you "catch-up" raises if you're significantly below the market rate, but that's rare.


strangely enough, the semiconductor industry in my experience does give catch up raises to those who for some reason are significantly behind their peers in the same company with comparable experience and education, if they are performing at least average. HR will bring to the manager's attention (if he/she doesnt already know it) that they have a person who is getting much less than others at the same level.

ask for as much as you think you can get away with. Worse they could say is no or counter offer less. If it's anything I've learned in my work experience is make as much as you can for as long as you can because in the job market you do not know when job cuts will come. of course it could just be that i'm in IT (Trading Env) and think that way.

everyone - thanks for all the input, it really helps.

I checked out a few of the sites people mentioned - looks like the going rate is 110-115k. I'm in a low cost region, but will not have to relocate.

Looks like I'll try to deflect the "how much do you make" question by HR as long as I can or seems prudent.

How about if I inflate my current salary? I tell them I make "about 108k" or something...? Can this backfire?

Thanks again for all the tips.

in theory, I agree with "current salary is no indication of future potential". there are many points that support this, i.e. one of the reasons you're even looking is because you don't consider it a real valuation of your potential. A company will have a hard budgetary limit on what they can afford. that is the range they should deal with. if given the choice, they would of course be willing to pay you less. hence, you shouldn't let them know.

in practice though, current salary is a very important data-point used by both HR and the hiring manager in the comp decision. there's no rule requiring that you give up your salary information, but most likely the people you're dealing with at the hiring company are lazy people (like we all are). if you're not willing to play, and another equally qualified applicant plays, you lose.

20% is absolutely not outrageous for a job change, especially if you will be taking on additional responsibilities. obviously environment factors like industry, geography, etc. will affect the final number. but the premium is used to pay for meeting a hiring need, for your moving from a known situation to an unknown, future employee happiness, etc. it is not just a reflection of your abilities as an employee.

it would be helpful to gain an understanding of basic negotiation concepts (BATNA, target, reservation/walk-away) and tactics (anchoring, re-anchoring).

some links to start you off: Negotiations wiki when to make the first offer. also get this book Getting to Yes

SinghSahib said: everyone - thanks for all the input, it really helps.

I checked out a few of the sites people mentioned - looks like the going rate is 110-115k. I'm in a low cost region, but will not have to relocate.

Looks like I'll try to deflect the "how much do you make" question by HR as long as I can or seems prudent.

How about if I inflate my current salary? I tell them I make "about 108k" or something...? Can this backfire?

Thanks again for all the tips.


absolutely, positively, do not fudge. all references can be checked. and depending on your industry, it can be a very small world. if you're going to take other things into account when coming up with the number, like tuition reimbursement, holiday differences, you need to make sure they understand your assumption. your credibility is one of your most bankable assets. once you lose it, it's gone forever.

Yankees said: in theory, I agree with "current salary is no indication of future potential". there are many points that support this, i.e. one of the reasons you're even looking is because you don't consider it a real valuation of your potential. A company will have a hard budgetary limit on what they can afford. that is the range they should deal with. if given the choice, they would of course be willing to pay you less. hence, you shouldn't let them know.

in practice though, current salary is a very important data-point used by both HR and the hiring manager in the comp decision. there's no rule requiring that you give up your salary information, but most likely the people you're dealing with at the hiring company are lazy people (like we all are). if you're not willing to play, and another equally qualified applicant plays, you lose.

20% is absolutely not outrageous for a job change, especially if you will be taking on additional responsibilities. obviously environment factors like industry, geography, etc. will affect the final number. but the premium is used to pay for meeting a hiring need, for your moving from a known situation to an unknown, future employee happiness, etc. it is not just a reflection of your abilities as an employee.

it would be helpful to gain an understanding of basic negotiation concepts (BATNA, target, reservation/walk-away) and tactics (anchoring, re-anchoring).

some links to start you off: Negotiations wiki when to make the first offer. also get this book Getting to Yes


its not so much HR is being lazy to base an offer on the current salary as it is that the percentage increase or increase in payroll is probably one of the performance measures for that HR person or department. obviously the lower the better they look, although balanced by other measures such as how fast they can fill an opening.

frugalpete said: its not so much HR is being lazy to base an offer on the current salary as it is that the percentage increase or increase in payroll is probably one of the performance measures for that HR person or department. obviously the lower the better they look, although balanced by other measures such as how fast they can fill an opening.

good point, i didn't think about that. one of my MBA negotiations class members was a recruiter. there was a lot of debate over the theoretical vs practical view of sharing salary info. the consensus was that new salary should be based on potential and fit, and not on the old salary. but this is probably also because there are more job seeker level members than hiring manager level members in class.

i can't really speak for HR as I've never been in that role.

in practice, from a hiring manager's perspective, we always end up asking candidates what they make. and almost without fail, they will reveal the info. from the hiring side, we have the option to pay within what we think is a market range (of course, we skew on the optimistic i.e. low end). but what ends up happening almost all the time is that we offer an offset xx% from their current comp. hence the laziness argument

as a candidate, you can of course game the system by shooting higher than you really wanted so that you can leave room to negotiate down. but if you don't do your research and make a blind guess, you can come in over the range. that's when you lose at the game. hiring managers will tend to move on if they have other good candidates. the alternative is for the hiring manager to go back to his own manager to ask for more money, but this requires 1) work on the part of the hiring manager and 2) reputation risk if the candidate isn't good enough to warrant the extra $$. not everybody gets this far though. the candidate needs to have completely aced the interview process.

never underestimate the power of people's laziness in influencing events, especially at work.

some random points:

* do your research, know the market, industry, company, and position you're walking into
* you make the first offer, don't let them come to you
* don't do it during the first few rounds of the interview, you'll be meeting people who are not decision makers
* don't give ranges. they'll only hear the lower number.
* HR people and the receptionists are not your friends, no matter how friendly they are. your behavior around them and anything you tell them WILL get back to the hiring manager

Before I took a previous job I had to deal with a real S.O.B. HR guy who did not believe me when i told him how much I made and I did not fudge the numbers either. When it came down to it I had to provide him check stubs to prove it. I should have known I wouldn't like that company from that point lol, i've since moved on and making much more money w/o the hassle of proving anything.

If you are making a lateral move from one company to another in the same industry, it'd better be a lucrative deal otherwise the move isn't justified. I am sure there are things you don't like about your current company, but at least you know what they are. It's easier to live with evils you are familiar with than those you are not. There'll be evil things in the new company--you just don't know what they are yet. You have to ask for one of the two to make the deal lucrative--a lot more money or a better job title. I myself prefer the second option because it is better for long-term growth. And a better job title usually comes with more money too. Lots of people make moves to become VPs and directors when they were directors and managers previously. Regardless of how much more they make, this kind of moves is much better for your career growth. And it's not good for your resume if you move laterally within the same industry. For one, we rarely put earnings on our resumes. Making lateral moves is like a running back running north/south instead of left/right. The end zone is always as far away as it was.

Things to consider:
-if you were not recently promoted in your current job, you may consider staying put for your next promotion.
-if you have recently been promoted and the new company offers the same title and the same money with similar responsibilities, then it warrants a consideration. But make sure you get 10% more money after all the negotiation. The overall package has to be 10% better.
-if you have recently been promoted and the new company offers a better title with more or less the same package. MOVE!
-consider other industry as well. The skills you possess may be extended to another industry.

When you are making a move to a different industry, the decision becomes more complicated.

I've had applicants say, "I'd rather not disclose my current salary. Please determine what you think I'm worth to your organization and let's talk about that." That's fine with me.



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014