How to Answer Salary Question in Email?
Hey guys, I had a quick question for you. I received an email from a managing partner of a boutique asking me what my expected compensation would be as an analyst (I received this after interviewing with another partner). The firm is based in Chicago and was recently started. I would imagine - in this economy - that compensation for employees is a concern of theirs, at least for the time being. I was wondering how I should approach/respond to the email. I really do not want to give an exact figure in the email but I also want to stress cost of living, market rate, etc. I really would appreciate any feedback. I have to email him back today. Thanks!
Salary Expectations in Email
When offering salary expectations, there are two schools of thought that our users have explained:
- Offering a well researched range
- Requesting the "market rate"
Market Rate Expectations
Some users caution that offering an exact number can lead to you "shooting yourself in the foot" and low balling yourself. Our users advise requesting the "market rate."
User @Human", a private equity partner, offered this perspective:
Always say: Market Rate. Never put a dollar amount until the employer offers a number, then you can decide what to do with it (negotiate upward, accept or reject the offer). Never get low balled into a lower number. Most reputable firms will pay at a decent rate.
User @TheMasao", a private equity vice president, emphasized that market rate is preferred to "negotiable":
Exactly, if you don't know what the going rate is don't shoot yourself in the foot. Negotiable sounds like you want to negotiate before you've accomplished anything.
Research Rate Expectations
While some users caution against giving a specific numbers, some users believe that it is important to give a real number when asked for your expectations. You should research similar firms and experience levels to see what salary you should request.
You want to phrase it that "I am excited to come work for you, and in all my experience and research, $xx,xxx seems to be market compensation for analysts at firms like ours."
Simply give a modest range - for example, BB first years earn $70k starting, so it would be fine to suggest $60 to $70k and then support that with something like based on your research, starting salaries for 1st year analysts are between $60 and $70 or even $55 to $70 if you want to be even more conservative.
(posted in Sept 2010).
User @IlliniProgrammer", a hedge fund quant, commented that avoiding a real number is a mistake:
No, no, he's requesting an ask from you. You've got to be a man and give him a number. I would cite the market rate for my services.
User @IlliniProgrammer" went on to offer guidance for negotiating your rate with smaller firms:
If he's equity rich and cash poor - and he has a good track record, you may want to think about offering to take a lower cash base and/or bonus and take some of the pay in the form of options or equity. Enumerate things in writing, make sure he some kind of corporate or partnership structure set up, and expect to make junior partner next year in lieu of a bonus.
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