How to negotiate the right salary with a new hire
Negotiating salaries with new Employees can be a concern for companies. Having found the right Candidate, it’s important to seal the relationship with confirmation that they’ll take the job. Agreeing on the right pay is often the final hurdle. These conversations can be tricky, which is why it’s important to learn the right approach rather than getting hot under the collar.
First of all, decide whether to include a salary range within the job description itself. In certain circumstances, this may not work for you. If you don’t have an open salary policy, current Employees may be offended by the fact that new hires could be offered more. Some companies also worry that their competitors will use this information to ‘poach’ top talent from them.
However, advertising these figures will help to manage expectations. You’ll avoid a worst-case scenario where you get to the end of the process only to find that your chosen Candidate isn’t interested in working for you anymore. Choosing to keep salary hidden could affect your application rate. Research shows that this is one of the first things job seekers look for – over 70 per cent of professionals want recruiters to mention this in their opening message.
When deciding on your salary, you should always cite a competitive rate. It may be tempting to give a smaller figure, and wait for applicants to challenge this, but think about the perception this creates. Your main aim is to attract top talent. Therefore, honesty is the best policy, and this approach will demonstrate that you know the value your Employees can offer.
Of course, the salary you’re able to agree will depend on a multitude of factors, from your size to growth stage and location. While your rate should be roughly comparable with surrounding businesses, it can be hard for smaller businesses to compete with large corporations. Thankfully, most Candidates understand this. Many people will accept lower offers, within reason, if they’re attracted to the prospect of working for you.
That’s why it’s so key to sell the opportunities available before entering into a salary negotiation. Once you’ve given people an initial idea within the job description, try to save this discussion until the interview offer stage. Focus on the Candidate experience, from a warm welcome to a tour of the office, so that they have a good understanding of the role first and are willing to meet you halfway.
It might surprise you to know that many job applicants don’t negotiate on salary. A survey of more than 2,700 workers found that only 39 per cent tried this during their last job offer. While it’s important to make sure people feel comfortable having this discussion with you, there are many things that Employees value above monetary renumeration.
Companies are becoming increasingly savvy when it comes to this. Many use additional benefits as a way to attract high-calibre Candidates, from flexible working to increased career opportunities and community volunteering. At Allen Associates, we offer highly competitive salaries, but we also have an annual bonus, subsidised healthcare and a company pension scheme, as well as additional holidays, Friday lunches and other perks.
If salary is a deciding factor for your chosen applicant, your response will depend on your capabilities and limitations. Your first port of call after a Candidate asks for figures outside of your range should be your internal team. Just let the person know that you’ll need to consult with them. If you’re unable to meet expectations, you may have to be honest. Thank them for their time, reiterate that they’re still your top choice, but that you also have others on your shortlist.
We’re all looking for Candidates who have a real passion to work for our business, but of course, a credible, experienced professional will also know their market worth. Doing your research beforehand, to find out where to pitch your own salary range, will pay off when it comes to the final conversation discussing these practical details.
In many ways, using a trusted recruitment agency can help to take the pressure off your shoulders. Our expert consultants will help handle these negotiations on your behalf. As a neutral third party, we’re able to discuss salary expectations with Candidates from the start. Having worked with many other businesses, we have a strong idea of what a competitive rate is for the area you’re hiring within. We can advise you on an applicant’s motivations and expectations.