How to Write Salary Expectations in a Cover Letter

It seems someone reviewed my book on slashdot which has increased the amount of mail I get by about 1000 fold :) Thanks very much everyone--I hope to answer your kind notes as soon as time allows.

Jeffrey wrote me with the following:

I am a 25 year old who is currently transitioning out of the United States Army. I am sure coming out of the military is just as frustrating as trying to find a job out of school, or even just transitioning to something new. The Army does a great job of helping to get a resume together. They give instruction (through a program called ACAP, the Army Career and Alumni Program) on things to look for while finding work in the business world, such as interview questions and how to present yourself, but I guess nothing really sinks in until you actually get out and try landing a job. I'm finding it toughest to answer questions about money/salary, because I really have nothing to base it against. Can you explain how to write salary expectations in a cover letter?

I dedicated a chapter to salary negotiation and HR questions in the book, but I'll give you the most important things to keep in mind here:

1. Do not discuss salary until you have an offer in-hand. This is the most important rule for compensation negotiation--the golden rule if you will. Sometimes this is straight-forward to do--for example by leaving salary fields blank on job applications--however, at times it can get challenging. Thus, the answer to Jeffrey's question "How to write salary expectations in a cover letter" is that a cover letter should not state salary expectations at all. When it comes to salary, here are good answers for interview questions:

Interviewer: What is your salary range?
Candidate: Honestly, I don't have a salary range. There are so many things to take into account such as what the people I would be working with are like, the type of work, the benefits, and so forth that it's not something I could estimate at this point.

Interviewer: If we offered you a base salary of $61,000 per year, what is your gut feeling? Would you take the job?
Candidate: I appreciate your honesty and frankness. I hope you will appreciate mine as well--salary is not something I am considering right now. I'm afraid I haven't conducted any research on compensation yet. I will have to get back to you.

Interviewer: What will it take money-wise for you to take a job with us?
Candidate: I don't have any set numbers--compensation is definitely negotiable.

While answering the above list of interview questions, you may be put in a situation where you absolutely must state some sort of salary expectations to the employer or the hiring process cannot continue. In such a situation it is recommended that you give a focus area, i.e. "well, my main concern is my base salary because I want to ensure that I have enough to support myself and am paid what I am worth for the skills I bring to the table" or "I am less worried about my base salary and more concerned with performance compensation and that my relocation is funded entirely, with no ongoing debt to myself. I do not want to start out my career with debt."

2. Average job salaries. Knowing that an accountant with 1 year's experience in Pittsburgh makes $46,000/year can be invaluable in salary negotiation. The best place to get this type of information is from a library (that's right people still use those rather than the internet!). Universities often have career libraries which often include figures collected from alumni indexed by major for average job salaries.

3. Factor in cost-of-living. This is often overlooked by job seekers and it can make a very significant difference. Cost-of-living is primarily affected by state taxes, commuting miles to work, and rental or mortgage costs. For example, the difference between New York City and Orlando, Florida is over 60 percent. Very few companies offer a cost-of-living adjustment to match such differences. You may be able to offset some of the costs by finding an exceptional deal on housing, but gas prices, state sales tax, and income tax are unavoidable. Here are some salary-related links:

Job Star Central
Salary Expert.com
Sperling's Best Places
Salary.com