When it comes to hiring new employees, reaching an agreement on an appropriate salary can be a sticking point. Employers often have a range in mind, and they must balance the need to stay within a tight budget with the need to hire the best fit for the job.
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There’s no shortage of advice for employees to negotiate a higher salary, but what about employers? What can they do to successfully walk that line? The last thing a company wants is to lose a well-qualified applicant during the salary negotiation process. Here are some tips for employers.
- Do your research long before posting the job. Employers should know not only their internal budget for the salary (both the full salary range available and the potential benefits on offer) but should also know the competitive salaries available for similar roles in the area. Don’t be surprised by the figure your future employee may be expecting.
- Likewise, allow applicants to fully understand the job before pressuring them for salary requirements. The question of salary requirements makes most applicants nervous, but it’s made exponentially worse if they’re expected to have a salary in mind before fully understanding the role, the anticipated working conditions and terms, and the benefits available.
- Don’t lead with the top amount you can offer. While it may seem intuitive to offer as much as you can when you find that elusive perfect applicant, most applicants assume that the starting offer will be negotiable and will ask for more—even if the amount you offered is within their expected range. When you can’t go higher, they may see that in a very negative light even if the initial offer was as much as they were expecting.
- Pay attention to how they negotiate. How an applicant negotiates salary can give you some insight into how they handle stressful situations or potential conflict. Use this as an opportunity to further ensure they’re a good fit. (But remember that most people are nervous with this sort of interaction!)
- Don’t run away if the applicant’s expectations are out of your budget. Sometimes there is a disconnect between the applicant’s wants and needs (or the average market salary for the position) and the employer’s budget. But all is not lost. When you find yourself in this situation, begin a dialogue on the other benefits you can offer that will help bridge the gap. For example (keep in mind this list is not comprehensive):
- Good health insurance benefits can make a big difference to an employee’s final take-home pay.
- The ability to telecommute can save the employee time and expense, and it can provide flexibility for which he or she may be willing to sacrifice some base pay.
- Extra vacation time can be a great benefit to sway applicants.
- Reimbursements for tuition are another benefit that can both help applicants and cost less for the employer.
- Be aware of the effect your job posting or application process might have on potential candidates. For example, if the posting requires applicants to give a salary history as part of the application process—before the applicant has had the chance to learn more about the opportunity and what it entails—that could actually scare off well-qualified candidates who fear that their salary history prices them out of the role. It could mean the best candidates don’t even apply.
- Don’t get too hung up on how much the applicant currently makes. This is only one factor in whether the applicant will accept the salary you offer. For example, the applicant may make more than you can offer but may not have as much vacation time or benefits. Don’t dismiss a candidate too soon.
Has your organization lost a potentially great candidate when salary negotiations went awry? Tell us your story in the comments.
**This article does not constitute legal advice. Always consult legal counsel with specific questions.**
About Bridget Miller:
Bridget Miller is a business consultant with a specialized MBA in International Economics and Management, which provides a unique perspective on business challenges. She’s been working in the corporate world for over 15 years, with experience across multiple diverse departments including HR, sales, marketing, IT, commercial development, and training.