How to talk about money in a job interview

For many people, talking about money with strangers can be difficult or even embarrassing at the best of times. But when it comes to job interviews, salary is something that’s difficult to ignore.

Only 19 per cent of Australian job ads disclose a salary. For roles on an industrial award that might not matter, but it does mean that many jobseekers go into an interview without clear knowledge of the job’s pay. So having the ‘salary talk’ can be vital to ensure both parties are on the same page when it comes to what any given role pays.

As a manager or HR professional conducting the interview, you may or may not have been involved in deciding the role’s salary. But while salary isn’t always the top motivator for jobseekers looking for work in the NFP sector, the amount an organisation is willing to pay can still strongly influence the level of experience and quality of candidates you’ll get for a given role.

So for roles where the salary isn’t set by the government, what’s the best way to address ‘the elephant in the room’ and have the money talk with potential recruits?

Be prepared for salary discussions

Be as prepared as possible for a salary discussion, so you can be clear with the candidate and negotiate fairly. Make sure you go into every interview knowing:

  • The baseline range for your organisation. If you can, it’s always best to set a range – even a narrow one – and then negotiate within that range depending on the candidate’s experience and skillset.
  • The benchmark salary range for the role in the sector more broadly.
  • Whether the position has an award. While that might be obvious for roles that fit within the SCHADS (Social, Community, Home Care and Disability Services) industry award, it’s probably less clear for areas like marketing, fundraising or even administration, where some roles have an award and others don’t.
  • What salary packaging your organisation offers. Many NFP employees can make use of tax concessions up to the allowable maximum of $15,900 – which effectively means that a proportion of each employees’ salary each pay is tax free. You’re likely to be familiar with this for your organisation, but do you understand it well enough to answer a candidate’s questions about it?
  • Your organisation’s internal processes. For example, whether there’s ‘wiggle room’ to negotiate salary or additional benefits with a candidate in order to secure an exceptional employee.

Start the conversation about salary range as early as possible

Being clear about salary can be critical to ensure your time – and theirs – isn’t wasted. There’s no reason to spend hours interviewing a candidate multiple times if their salary expectations are just too high.

So if you haven’t disclosed a salary range in your job ad – which you should always try to do where possible – then it can be beneficial to have the conversation early through a short screening phone call.

Never ask “what’s your current salary?”. Questions like this can unfairly discriminate against candidates who are already being underpaid, in particular women, indigenous or other minority candidates. It can also put pressure on candidates who aren’t very confident to under-value themselves.

Instead, take the lead by either:

  • Being clear about the salary range your organisation is considering for the role – including important financial benefits like salary packaging – and then ask the candidate for feedback like: “Does that match with your expectations?”; or
  • Asking what the candidate’s expectation is for the role’s salary, and responding based on the range your organisation is offering.

Either option is a good way to open up a conversation about the variety of benefits of working at your organisation (see below), and a chance for you to convince a candidate who may be having second thoughts based on the salary.

If you haven’t done a screening call or included the salary range in the job ad, the next best place to clarify salary expectations is at the end of your first interview – again, to minimise the time you might waste with a candidate whose salary expectations are mismatched.

Know what else you can put on the table

While most candidates will want to know a role’s salary, it’s rare that salary is the only or even the most important consideration. In fact, most candidates see salary as one small part of a larger variety of benefits at work.

A 2020 survey by EthicalJobs.com.au found that just 28 percent of jobseekers identified salary as one of their top three priorities when applying for a new job!

Rather, the most important things to jobseekers when assessing a potential new role were:

1. The organisation is focused on social or environmental impact: about half (48 percent) of jobseekers said this was one of their top three priorities when applying for a job. Purposeful work is a key asset for most NFPs, so even though it doesn’t feel like a ‘perk’ remember to highlight the impact that your organisation has on the world when the conversation turns to salary.

2. Work-life balance: 46 percent of jobseekers ranked this as a top-three priority for any new role. Balance has long been a drawcard for many NFP roles where hours are likely to be significantly shorter than in the private sector, so remember to highlight flexibility (and shorter hours if that’s possible in the role) in any salary conversation.

3. Culture of the organisation: 42 percent of jobseekers valued organisational culture in their top three priorities for a new job, so when discussing salary, remember to also highlight what it’s really like to work in your organisation.

Consider what value a high-performing candidate can add

While negotiating a higher salary is just not possible for many roles and many NFPs, in the end, the pay for each role should aim to be commensurate with the impact the employee can have in the role.

So for roles where the employee’s impact on your organisation can be outsized – for example a top fundraiser, an experienced public relations expert or a skilled team leader – it can be wise to consider (or pressing senior management to consider) whether it’s possible to meet a candidate’s expectations for a higher salary, should that become a make-or-break issue for the candidate.

And don’t forget to consider also the cost of hiring a candidate who isn’t right for the role, which can be significantly more than a small salary increase.

Discussing salary in the right way and at the right time can be important to your recruitment success. Do you have a successful way to talk about money in job interviews? Let us know in a comment below!

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