There are two different ways to view this question, from the viewpoint of the candidate and from the viewpoint of the employer. I will try to answer when do you talk money in the hiring process from both sides of the desk.
The candidate’s point of view
Money is always a difficult subject to deal within the job search. You always want to know what a company is potentially offering because you want to know if it is going to be worth your time to even pursue the job. Hopefully there has been some indication of the pay level before you have ever darkened the door of the company. But what if you have no idea? When do you ask? Part of the answer will depend on several issues. Are you currently out of work? Are you genuinely interested in the company regardless? Are you genuinely interested in the work regardless? If that is your situation then my advice is to leave the subject of money alone until you are made an offer. An offer gives you a starting point from which you can move forward. Never talk money during the first interview, unless of course the interviewer broaches the subject. If you bring it up it appears you are ONLY interested in the money and you will most likely be discounted as a serious candidate.
If one of the scenarios is not your situation and the earning potential is truly what you are most interested in then I would suggest that you broach the subject early. You might even be bold enough to do so when the interview is being arranged. You might say something to the effect “I don’t want to waste your time so before taking that time I did want to mention that the income level I am looking for is $XXXXXX(X), so if that is not in the ballpark for this position or suitable for you salary structure then I will have to decline the interview opportunity.” That is a bold statement to make, but if you are in that position why not.
By the way, in both situations, you want to get some idea if there is room for negotiation. Some companies, generally smaller companies, are in a position to “horse trade” with you, often because they don’t really know what it takes to get someone with your skill level. Women, this is particularly important for you, as research has found that women do a much better job of negotiating if they know they can. See my previous post on empowering women to negotiate.
From the company point of view
Putting someone through the paces of an interviewing process is expensive in time and effort. So to me the sooner you find out what someone’s monetary expectations are the better off you are. If someone is widely expensive it might not make any difference what they can do for you. If you have a structure and a culture that just does not allow you go outside of that structure then no need to waste the time. I used to state up front what the job paid, usually within a range, and asked the candidate if that was something they could live with or not. If they totally balked at that potential then I would generally either not interview them or make the interview a short one. If I set the table properly then money would not enter the discussion again until much later in the interview process, generally when we got to an offer stage.
I would also always let the candidate know if there was any negotiation room in the offer. Whether there was or not depended on the economic conditions, the position and the candidate. Sometimes I would preface the offer with “this is a hard and fast offer.” Other times I would make the offer, knowing full well they would counter and we would be willing to negotiate. Again this depended on the position and our desire for the candidate. Generally when dealing with hourly employees it was hard and fast, this is it. With salaried, exempt employees, especially sales it would vary.
The “dance” around money can be an awkward one for both candidates and employers. It makes both feel better if the ground rules are set up front.
How do you handle the “money dance?”