Companies sometimes ask applicants to include their salary expectations in a cover letter. Although it might seem strange, it is actually the first step in reducing the pool of applicants. Employers can make sure they do not waste time contacting candidates whose expectations do not match the salary range they have set for the position.
Therefore, candidates can increase their chances of securing a job by conveying realistic salary expectations. It is challenging for most job applicants to write a persuasive cover letter, and it becomes even more complicated when employers ask them to specify their salary requirements due to the fear of asking for a significantly high or low salary. This fear arises because if the salary requirements are unrealistic, it can lower a candidate’s chances of securing the job.
This article explains how to properly include salary requirements in a cover letter. It also provides free, customizable templates and examples that candidates can use as guides.
Download Free Templates
Given below are the salary requirement cover letter templates that you can download for free:
Why Do Employers Ask for Your Salary Requirements?
Employers ask for your salary requirements for various reasons. One obvious reason is to know if you meet their budget. Secondly, it is also important for employers to know how you value your own worth and qualifications. It is also important for them to know what your professional level is. If your requirements are too high, it indicates that you are overqualified for the position.
If you ask for too little, it indicates that you are not experienced enough and may not be suitable for the position. Both extremes are thus inappropriate. Employers will not invest time and resources in candidates they cannot afford. Also, they do not consider candidates who do not have the skills or experience to perform the job satisfactorily.
How to Determine Your Salary Requirements
Determining how much to ask for as a salary can be difficult, as you have to be certain to ask for appropriate compensation that reflects your experience and qualifications.
However, you can estimate the correct salary level by following these steps:
Conduct research
To determine a rational compensation level, you need to know the industry standards. This is because different industries have varying standards for different positions.
For example:
You can research the national average salary for the position you are applying for.
There are websites where you can obtain information such as the average job-specific salary, comparison tools, cost-of-living calculators, negotiation tips, and lists of potential benefits associated with each profession. Conducting research will help you determine a reasonable range to mention in the cover letter. This, in turn, increases your chances of getting hired.
Consider other factors
Once you have determined an industry-specific estimate of your salary, evaluate other factors that are specific to you.
They include the following:
- Your education: You should consider your qualifications to estimate a reasonable remuneration. Not only does your level of education matter for such calculations, but also its relevance to the job. The higher and more relevant your education is to the job, the more leverage you have to ask for a higher salary. A candidate with a doctorate will expect a higher salary than one with a bachelor’s degree. However, it is important to evaluate each situation independently. For example, if you are applying for a job for which you are overqualified, you should consider asking for a reasonable salary that aligns with the employer’s expectations. Also, the more relevant your education is to the job, the more likely the employer will offer you higher pay compared to a candidate with an equivalent but unrelated education.
- Experience and skills level: Experience and level of skill can influence the salary you request. If you have sufficient experience in the industry and skills relevant to the job requirements, you can ask for higher pay. Similarly, if you have highly desirable skills, you will be able to express a high salary expectation. You can also negotiate for higher pay if you have special experience or skills, such as proficiency in a major language other than English.
- Geographical location and cost of living: Location plays a role in determining the salary you can ask your employers. This is because the geographical location affects the cost of living. The cost of living encompasses the cost of accommodation, transportation, education, utilities, gas, etc. Consequently, different cities will have different costs of living. Typically, employers will be more willing to pay you higher salaries in metropolitan areas, such as Manhattan, than in rural areas, e.g., Boise, Idaho. As a result, you can use the job’s location to justify a higher salary requirement.
Your professional license and certifications
Professional licenses and certifications are important factors in determining your professional worth. This is because they indicate your level of expertise, your dedication to your professional development, and the specialty that you bring to the team. Therefore, you can ask for higher pay if you have any professional licenses and certifications.
Other considerations
There are other factors you should evaluate before determining your salary expectations. Some of these factors include the additional benefits you will likely be offered and potential salary increases compared to your last job. Companies will offer different benefits, including health plans, savings plans, professional development grants, cost of living adjustments, etc. Such benefits can justify a lower salary. Lastly, if you are moving to another company or switching jobs, you will typically want a pay raise, so consider this when determining your salary expectations.
How to Effectively Include Your Salary Requirements in Cover Letter?
Negotiations regarding salary expectations are typically held during the interview stage. It is thus not advisable to share them too early in the recruiting process unless the employer requests it. However, if you are explicitly asked to share your salary expectations, your cover letter is perfect for sharing this information.
Below is a procedure to effectively convey your salary requirements in a cover letter:
Express before the call-to-action section
Your letter should typically focus first on your suitability for the position. Normally, this information is mentioned in the first and following paragraphs before adding your salary requirements. The requirements can be written in a separate paragraph or added to the call to action (CTA).
Provide a salary range
It is always advisable to provide a range instead of a fixed amount. You should research the current industry standards before establishing a range. This information can be obtained from corporate and government databases. Therefore, the range should be based on the position, industry standards, job duties and responsibilities, and qualifications.
Additionally, it must be realistic. The benefit of providing a salary range is that it gives the employer flexibility to determine how much they can sustainably offer you, thus preventing them from dismissing your application because you are asking for too much or too little. Since most employers will try to offer the lowest figure, it is important to know the value of your job in the marketplace to avoid being exploited. For example, my annual salary range is $55,000 – $60,000.
Be open to negotiation
A salary range provides grounds for negotiation. However, you still need to state explicitly that your salary expectations are negotiable. It shows you are interested in the job and that money is not your primary focus.
Also, it provides another opportunity to discuss your salary. Furthermore, by doing so, you ensure that the employer will contact you even if your expectations exceed theirs, rather than automatically dismissing your application. You should, however, have a specific number in mind before you start negotiating.
Express that you are flexible
Whether you provide a salary range or a fixed salary, you should clarify that the requirements are flexible. This allows the employer to restructure their proposal and shows your interest in the position. This prevents the employer from completely dismissing your application, and you may still be requested to interview for the position.
Also, it opens another opportunity to discuss your salary expectations once other factors, such as benefits and non-salary compensation, have been discussed.
Do not be direct
Lastly, you can avoid answering the question about salary directly. Although it is not advised, it is sometimes effective in ensuring you are invited for the interview. This is a good strategy when you do not want to dissuade potential employers or are unaware of the company’s policies.
For example:
While I consider salary a significant consideration, it is not my primary consideration. This opportunity would be a significant step in my professional growth, and it is my priority to help the company fulfill its mission and vision. Therefore, I would be open to revisiting the discussion on salary expectations once I have been deemed worthy of the position.
Examples of How to Mention Salary Expectations in Cover Letter
Example 1
I am qualified to perform the duties of a Chief Security Officer at your company. With the functions associated with the role, I believe a compensation of $50,000 to $60,000 would be justified. However, I would like to highlight that salary is not my primary interest, and consequently, my salary requirements are flexible.
Example 2
As requested in the job advertisement, I would like to highlight that a salary of $70,000-$75,000 would be acceptable. I have five years of professional experience in production systems safety and control. However, the salary is negotiable based on available bonuses, benefits, and the company’s salary structure.
Example 3
I would like to seek a salary of $60,000, which is negotiable. I have based the figure on my professional accomplishments. I am a CPA with experience in SMEs. I am open to discussing the compensation details later in the process.
Example 4
As much as salary is a consideration, I would like to state that, at this stage, it is not a key factor. I do believe in your work and mission and would thus love to discuss this issue further. With my skillset and motivation to grow in this career, I would be a valuable investment for your organization.
Example 5
Having held the position of manager in multiple companies, I can reassure you of my capabilities to satisfactorily perform the duties and responsibilities in the job description. I would be thrilled to be part of your organization, with a salary ranging between $85,000-$95,000. The compensation package can be restructured later to accommodate company policies, bonuses, and benefits.
Frequently Asked Questions
Do you need to reveal your previous salary?Â
Employers will rarely ask about your previous salary. However, they can request this information to estimate how much to pay you depending on your qualifications and experience. So, if asked to disclose your previous pay, be truthful and accurate.
How do you determine a reasonable salary range?Â
To determine a reasonable salary range, there are certain things you can do. You can research average pay within the industry or use online salary calculators. Salary calculators determine salary based on factors such as experience, position, education, etc.