From that day in 1976 forward, I became relentless in negotiating as much money as possible on every new job I accepted. Once you've had your first job in your chosen field, it's a lot easier to negotiate a new salary. After all, changing jobs is both stressful and risky. No one expects you to switch without getting more money. How much more is part of the negotiation, but 10-15 percent is a good rule of thumb. This also means that you have to tell your future employer what you're currently making before you can start negotiating.

After working for twenty years, I negotiated a new job with Aspect Development paying $160,000/year. I had negotiated with the President, Joe Prang, and argued based on my current pay (in Massachusetts) and the higher cost of living in Northern California. Joe used a sketchy local salary survey to make the case that his offer was fair. After I accepted, their recruiter Paul Deppmeier said to me, "We are very pleased that you've accepted our offer. Welcome aboard! By the way, we have a policy of getting a copy of every new hires prior year W2 statement for your file. It's just a formality."

Paul was the first one to ever pull this trick question on me and fortunately it was probably the first time in my life that I hadn't embellished my salary from my old job—just a little. Exaggerating what you make to bait a better offer is just human nature; after all, we want to get paid as much as possible. Even if the new guy was willing to pay you $20 an hour, he'll probably only offer you $18, if you tell him that you're making $15 an hour in your old job. Of course if you stretched the truth a little and told him you were making $17.50 and then he asks for your W2, you're in deep trouble. The best thing that might happen is that he cuts your offer. More likely, he'll tear up your offer letter and tell you they don't hire liars. If you've already resigned from your last job you're in deep, deep trouble.

When you go in for your initial interview for a potential new job, the very last question you're planning to ask is, "What does this job pay?" Even if you're curious, you know it's an inappropriate question to ask until you understand the job and they've shown strong interest in making an offer. You won't hear a word about starting salary from your potential employer until they're ready to put an offer in writing, but that doesn't mean they won't ask you about your current salary a whole lot sooner—often early in the initial interview. In fact if you're going through an outside recruiter, don't be surprised if he asks you over the phone before even scheduling a meeting.

If you haven't prepared for this question, you will be faced with an instant dilemma. Do you tell the truth, refuse to answer, or make up a number? First off, you should never lie, particularly about a verifiable fact. What was on your W2 for the prior year is a fact. If they ask you to prove it, you have nowhere to hide. You can round up to the nearest ten thousand, but that's about it. If you choose to answer the question that's you're only viable option. On the other hand, there are a number of ways to respond that are truthful and yet enable you to dance around the question and retain your ability to negotiate a good deal when the time comes:

1. Defer the Question— "Whoa, we just started talking. I can understand why you'd like to know that, but I'm old fashioned about private matters like salary. Let's talk about the job and my potential fit before we get involved in salary negotiations." This is a reasonable stall tactic. You'll get points for being smooth, but you'll still have to answer the question later and you may have sent up a red flag that you're hiding something. It's best to use this tactic as a desperate measure.

2. Leverage the Question— "Last year's earnings were disappointing, that's one of the reasons I'm looking for a new job." The problem with this response is that it will make you sound like a mercenary. Of course, if that's true, or you're looking for a job in sales, it's not a bad way to handle the question.

3. Change the Question— "Last year I made $ ____, but that was a long time ago. I performed above expectations and they took care of me. Let me tell you what I'll make this year." You can then go on to predict your salary for the coming year. You can predict a fat raise, you can predict an early review, and you can predict a large bonus. You're not lying; you're not even embellishing. You're simply making a rosy forecast about your prospects for the future. You know it's rosy and they know it's rosy. That's the beauty of this strategy. You tell the truth (always a good thing), but you convince them that it will take a higher number to get you to move. If you play it right, you also demonstrate confidence and the ability to "think on your feet."


Former software executive David James Horne is the author of Career Secret Sauce; 9 Winning Strategies for Building a Great Career. This post is an excerpt from the book. Read Dave's blog at http://careersecretsauce.wordpress.com/