The process of salary negotiation can be a daunting task for both HR and potential employees. It is usually costly to successfully recruit, hire, and train the best candidates. During the negotiation process, a mutual agreement needs to be arrived at. This is keeping in mind that good talent is highly sought after and the chosen candidate can easily shift to another firm offering better terms.
Before settling on a figure with a job candidate, there are a few considerations for the employer to have in place. This is to prevent the candidate from feeling shortchanged by a specific salary amount. In addition, HR needs to be fully prepared with all the necessary information to promote cohesion between both parties.
Here are the tips HR professionals can apply while negotiating a salary to reach a consensus with a potential employee.
1. Conducting Adequate Research
The job market offers an array of resources, such as Payscale.com and Glassdoor.com to check out the most attractive and competitive compensation packages popular with organizations. In addition, the experience, qualifications, and certifications of the candidate can hint towards the expected salary range.
HR can make a comparison of salaries with companies in the same industry, including their culture for pay raises. This is in the expectation that the potential employee and other current employees are bound to ask for raises. Being knowledgeable about the market ensures readiness to handle any counteroffer that the candidate might raise.
The company’s position on salaries should also be taken into account. What are the company rules when assigning salaries and benefits to specific positions? Can the budget fit in the new candidate, including their salary requirements? These kinds of factors predetermine whether the company can offer the candidate a reasonable deal without compromising on its standards. In the end, the salary offer needs to match the value the employee brings to the organization.
2. Listening to the Candidate and Communicating Clearly
Engaging with a candidate during a salary negotiation can be stressful as both sides want to settle on favorable terms. It is, therefore, essential to keep an open mind, especially if the company wants to keep this particular candidate. The potential employee should be given adequate time to explain their background and salary expectations. This could reveal new information HR was not aware of, possibly impacting the outcome of the process.
When the candidate states a particular figure, follow-up questions from the hiring professionals will further reveal the reasoning. It will also allow for determining if the amount fits with the budget and salary ceiling. If not, it is wise to openly communicate with the candidate and take a firm stand.
If the salary is not negotiable, other areas can be negotiated, such as benefits. The benefits can include sick leave, paid leave, and vacation days. Other selling points of the organization, such as offering professional development, can be just as attractive as a salary raise. This is supposing the company is not too restrictive on their benefits, it can be the final convincing tactic to get the candidate. At all times during the process, it is important to be respectful, transparent, but also assertive.
3. Settling on a Figure
At this point, HR should take a few precautions. There is the risk of losing the candidate if the company cannot meet the salary amount requested by the potential employee. On the other hand, if the company is looking to retain the candidate while ignoring the salary negotiation limits and budget, it can get costly quickly. There needs to be a balance between what the company is willing to offer and what the potential employee is willing to accept.
HR will be in a better position by starting with an offer that is not too low. Otherwise, there is the likelihood of the candidate negotiating higher. A set salary range can act as a guide. So, the lower range should be attractive enough to the candidate. There should always be room for more negotiation before the maximum offer is reached. No candidate wants to feel cornered. Ensure to give the potential employee adequate time to consider HR’s offer.
Negotiation comes to an end when the candidate’s counteroffer is accepted, as long as it is within the company’s set range. Once everyone is on the same page, HR should put everything in writing, in the form of an offer letter and the candidate signing their agreement.
These salary negotiation skills support efforts and goals of hiring professionals in securing top talent. There is always room to learn, including taking up more HR training and implementing HR software for better assessment of candidates. ASAP Payroll can handle all of your payroll needs, including guiding you on applying the best tactics in negotiating salaries. Do not hesitate to contact us for more information.