Help a Reader: Makes Too Much

Here's an email I recently received from a reader:

I am currently working for a very "old school" employer who goes by the principle of taking care of your employees so they'll take care of you. With that, he has been paying me far more than what the average salary is for someone in this position.  Taking it a step further, I work in the mortgage industry so individuals in my position are bountiful; I honestly have not seen anything in the way of job postings in months!  However, there are some things that have been happening within the company which have nudged me towards looking elsewhere for work, both in and out of the mortgage industry.  Several weeks ago I went on an interview where the prospective company wanted to know my salary history.  Needless to say when I told them my current salary package they were immediately dissuaded and I was given the impression that they assumed my current salary equaled my salary requirements, which it certainly would not. 

So what do you suggest would be the way to address this?  I certainly don't want to lie about my current salary but I don't want companies to think I am not willing to take a pay cut for the sake of a better opportunity.

Maybe I'm missing something, but shouldn't he simply explain that he knows he's highly compensated and that he's willing to consider a pay cut for the right position? What would you tell him to do?

Comments

[Kevin]

I agree, be upfront about it. It must be something really bad happening at your company to be considering switching if you're paid THAT much more.

[guinness416]

They're concerned about two things, I'd guess.

That you want the same pay as you make now, or want so much in benefits and vacation time to make up for a pay cut that it won't be worth their while. To this, you should be direct and clear, as FMF says. But equally you have to make sense and not give off a whiff of desperation. Taking a pay cut to move to a new field is something employers understand; taking a pay cut to do the same job function isn't.

They're also worried that you're "settling" for the job they are offering, and will leave them as soon as a better paying job comes your way - so to address that you need to be able to explain very clearly why you want to work for them (hint - I'm worried about my current employer isn't the answer) and why you're not a risk in that sense.

[D]

Agree with Guiness. The best tact to take is probably saying that you are willing to take a pay cut because you find the job and/or the company intriguing, best of breed, or believe in their principles. Focus on the new company not on your old one. That said, it is important to give a clear but concise reason why you want to leave your current company.

I'm in a similar situation but I would be looking to move from a large company to a small one that can provide advantages regarding affecting the bottom line, being a true decision maker, moving more quickly and given more authority. I'm sure this person can come up with similar reasons of why they would find the new company a better place to be given their career requirements.

[Mr. ToughMoneyLove]

I would respond by saying that you are looking for a position that is rewarding in many different ways, some tangible and some intangible, adding that salary is only one component. That should send the message that you are flexible on salary.

I agree with Guiness. On the one hand you don't want to be taken advantage of. But if you are going to say you are willing to take a paycut, then it should be for a clear reason, and hopefully one about them. For example, when I left my first job I took probably a 15% paycut. Now I was actually going below the industry level with that. Whether they were concerned money would be an issue or not, I took it off the table for them by persuading them that I was looking for a broad practice (my then-current employer was becoming a very narrow specialized shop) and that I was willing to take a paycut to be able to obtain that and work in a shop that had far less b.s. overhead/red-tape. So I think the first thing is to identify why you are looking to leave. And hopefully the reason can be cast in a way of what's different and unique and attractive about your future employer.

[Adrienne]

I've always heard that you should never discuss your current salary when you are interviewing (usually because you want to make more...). I think you should avoid mentioning it saying something like "I would expect a reasonable offer". If they really push you can alway say put it back on your current employer saying that they prefer you not to reveal salary (a new employeer certainly wouldn't want you to do something another employeer has asked you not to).

[M]

This is tough. I know because I'm in the same spot. Employers start running away even when you tell them you are willing to negotiate.

Add in the fact that often you are working with complete strangers (via ads or recruiters) and the message gets even more garbled.

I would say keep pressing on and don't get discouraged. Keep honing the message and delivery.

M

[Meg]

First of all, this person should be very open to considering jobs outside of the mortgage industry; there are lots of financial services jobs out there, but mortgage companies/departments are generally not hiring - and they certainly aren't hiring at a premium salary package.

But you could make close to or even above your current salary if you're willing to change your focus a bit. The great thing about being overpaid is that potential employers will assume you are very valuable, very bright, very productive, and they may be willing to pay the premium or at least close to it.

[Bill]

First off, it's nobody's business what you make. They'll find out anyway, but the deal should be: This is what I think I'm worth, this is what you think I'm worth, let's come to an agreement.

If you're willing to take less than you currently make, then say, "This is what I expect." It doesn't matter what you make now.

Plus, nobody knows how the intangibles of your current job align with the intangibles of the new job. So, how do you put a price on them?

Finally, get real. Employers are in the cat-bird's seat right now. You most likely cannot expect to get a raise by jumping ship (as in years past), much less stay at the same salary, everything else being equal. The economy is in tatters and you'd best stay where you are or come to grips with accepting a smaller salary.