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How To Answer The “What Are Your Compensation Expectations?” Interview Question

Quick Answer:
"Recruiters ask about compensation expectations to ensure expectations are in line with the company's salary range, gauge what type of candidate you are, and understand your longer-term expectations. Research the position, factor in expenses, provide a range, show flexibility, and be honest when answering this question. Expect negotiation. For example, you can say ""While I want to familiarize myself with your expectations, comparable positions have salaries between $65K and $75K."""

Do you know what your skills are worth on the open job market today? If you’re not 100% sure, keep reading to learn why you need to.

During the interview process, employers often ask one or more pretty common questions you can and absolutely should prepare for. The least comfortable one for many people is “what are your compensation expectations?”

Some other ways they might ask the same question include:

  • What are your salary requirements?
  • What do you expect to be paid?

This is one of the most sensitive parts of the interview process since it’s a make-or-break question for both sides. The best strategy is to do your research in advance, know the minimum you’ll accept, and have your answer ready.

In this article, we:

  • Discuss why recruiters ask you what your compensation expectations are.
  • Show you the best approach to answering the question.
  • Include 5 examples of great answers to the "what are your compensation expectations?” interview question.

Preparing for your job interview is one of the most critical steps in reaching your career goals. Use our career counseling service to prepare for your next interview or any other career steps you’re thinking about.

We’ve helped thousands of people succeed in their job search, prep for interviews, negotiate the details of their contracts, and otherwise hit their career targets. Get in touch with us If you want to do a deep dive on how to succeed in interviews or if you're curious about other ways to navigate your career path better.

Why do recruiters ask "what are your compensation expectations?”

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There are a few different reasons why companies ask about salary expectations.

To make sure you’re in the same ballpark

Before the recruiter gets too far into the process, they want to make sure your compensation expectations are within a range they can meet. If you throw out a hard number that’s far outside the range they can offer, they’ll be able to tactfully conclude the interview process, saving everyone time and energy.

That’s why a range is usually your best option. Set a top and bottom dollar salary amount you’d be willing to work for to introduce the potential for negotiation and keep the conversation going.

To see what type of candidate you are

It’s key that you suggest a realistic wage range. Giving them a ballpark figure or a salary range that’s standard for the area shows you’re knowledgeable about the job market and hints at the value you’ll bring to the company.

On the one hand, coming in too low can send up red flags since it suggests you don’t know what’s going on in the industry or that you're underqualified or not confident in yourself. On the other, giving a top figure that’s too high can make you seem overconfident or overqualified.

To understand your longer-term expectations

Interviewers may also ask this question to gauge your medium- and long-term expectations for the company. What you say about your expectations for the role you’re applying for today suggests what you’ll expect down the road when you ask for a raise or through promotion and other compensation benefits.

Learning about your expectations at the interview stage helps the interviewer compare whether their long-term plan for a person in your career trajectory aligns with their rates and plans. There’s a lot more room for flexibility in this case, but keep in mind that the recruiter is considering things far down the road when they ask this question.

Best approach to answer "what are your compensation expectations?”

Before you go into your next interview, get ready for all of the tricky questions interviewers tend to ask. Use the following steps to plan your answer for “what are your compensation expectations?”.

1. Research the position (and location)

Research the company and job title in the company’s city where you're applying before you interview. Using a tool like Glassdoor’s Salary Calculator to get an idea of compensation by location before your interview can help ensure your expectation is within the current local salary range.

If the rate you want is significantly higher or lower than the standard there, it’s best to adjust your answer. If you’re set on asking for a higher-than-standard wage, you have time to prepare a valid justification for your reasoning.

2. Know what you need to get

When deciding on your salary range, it’s critical that you factor in all the expenses you’ll have. You don’t want to ask for a low rate that won’t cover your bills, credit payments, and other costs - otherwise, you’ll have set yourself up for failure.

Think through the amount you need to be comfortable so you’re sure the low rate is the least you’ll accept. Being sure of this will boost your confidence and sincerity in the interview, which will come across to the recruiter.

3. Give them a range

The best and simplest tactic for answering this question is to offer a salary range you’d be willing to accept rather than a set amount. A range is much more likely to fit into their budget for the role, and it lets the employer compare you better against other candidates.

A salary range tells the HR manager more about your experience and knowledge than a fixed rate. It also communicates to them that you’re flexible, which is a great thing.

4. Emphasize your flexibility

Show off your best soft skills when answering this question by emphasizing your flexibility for compensation. Offering the employer room to maneuver will gain you more interest during your interview giving them more reasons to consider you as a candidate for the position.

Being flexible about the rate you get paid shows you’re interested in the work and the company, not just the money. It also suggests you might be relaxed about other things, like your workload or responsibilities.

5. But ask a bit high…

I know we just said don’t start too high, but remember, this is a bit of a song and dance. If you know the standard local compensation rate, it’s safe and smart to set the high side of your range just a bit above that.

The higher amount will show the recruiter you know the market, that you think your work is valuable, and that you’re ambitious. Asking for a below-market rate out of modesty could give your interviewer the impression that you either don't understand the industry or aren’t confident you can do the job as well as someone else.

6. Be honest

When answering this question, being honest about your experience and skills, and asking for a wage that reflects those, will come across to the interviewer. If you know you’re asking for a fair price, that integrity and self-assurance will improve your chances of getting the job.

7. Understand why you deserve it

When thinking about the answer you’ll give to “what are your compensation expectations?”, prepare an explanation as to why you chose that amount. Be ready to describe what sets you apart with specific past education, experiences, and successes to show why your offer is realistic.

Being able to explain your answer will win you points for being well-prepared and knowledgeable. It will also encourage the recruiter to work with you because it shows you’re reasonable.

8. Be ready to negotiate

Whether the rate you ask for is within or outside the range the company can offer you, the option for negotiation may come up. You’ll want to get yourself ready for this because it can be nerve-wracking and gives some people anxiety.

Luckily, you’ve researched the market, figured out how much you really need, and identified the strengths you’re bringing to the table. Having these prepared sets you up for success, so stay calm; you have everything you need for a smooth compensation negotiation.

We have your back if you’re not sure about any other part of the interview process. We’ve put together the best of our expert advice on the most common questions we get (and some of the not-so-common ones!) to help you ace your interview.

Example answers to "what are your compensation expectations?”

Example 1

While I want to familiarize myself with your exact expectations for this position before setting anything in stone, I understand that comparable positions to the one you’re looking to fill have salaries between $65,000 and $75,000. Given my work experience, skills and past success in the industry, I’d also expect to receive a salary in that range.

Example 2

I want to start by saying that my salary expectations are flexible at this point, but I think my work experiences in data analysis will bring value to the company I work for. That said, depending on the exact responsibilities of the role, I've estimated a range of about $40,000 to $60,000. I'd love to settle on a final figure, if possible, after hearing more about the tasks and workload in this specific position. This compensation range covers most of the comparable roles I’m familiar with in the industry, including my past ones, and I'm sure we can agree on a fair salary for what I'll be doing.

Example 3

My salary range is pretty flexible. While I want to be compensated fairly for my experience and good track record, I understand that the rates in this industry are always changing and that commissions and leads play a role. Ideally, I’d expect the base compensation to be between $30,000 and $50,000, depending on the commission structure you have, the lead generation you provide, and any other responsibilities you might have here. I’m estimating this range based on my previous work and what I know about the industry through my network.

Example 4

My range is $30,000 to $40,000. Given that I’m quite new in the industry and still developing my skills and experience, I feel this is a reasonable range. Of course, I’m open to negotiations depending on your expectations, the workload, and the opportunities for learning and advancement I’d have here. Does this line up with your budget?

Example 5

I'm happy to discuss the details of my salary, but based on my previous expertise in the field and my understanding of the industry, I’d expect between $60,000 and $80,000 per year. I know this is a wide range, but before settling on a final number, I’d love to hear more details on the daily tasks and responsibilities and hear your side on what the role is valued at and where you see me going with the company.

Takeaways

  • Asking for a salary range is always better than presenting a fixed amount.
  • Start by researching the standard salary for the role in the location where you’re applying.
  • Add up all your fixed costs and identify the lowest number you could accept.
  • Be as flexible as you can in the interview and be ready to negotiate based on the specifics of the role.
  • Have an outline ready to explain what you’ve accomplished and what you bring with you that you deserve what you’re asking for.
  • Be ready to negotiate.

We’ve helped 1000+ people just like you find success in the hiring process through our career counseling service. Whether you need help on the job search stage, prepping for interviews, or while you’re trying to negotiate your compensation, we’ve got experts who are ready to give you advice and help you strategize your next move.

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Kevin Roy
After a successful career in the corporate and non-profit worlds hunting for and hiring great candidates for my and others' teams, I spend my time writing on the subjects I love and know most about.
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