Top Tips For Negotiating Salaries With New Employees

From the moment you offer a job to the successful candidate the window for salary negotiation opens. There are two outcomes of this negotiation, that the candidate will end up feeling either wanted or devalued. In their eyes, the level of pay they receive determines how important they are to you and your company.

A successful salary negotiation will end in a positive employer as well as a positive employee. Reasoning has been discussed and both parties will agree upon a fair salary that reflects both the employer and employee.

If you’re struggling to negotiate or are looking for some guidance before the situation occurs, we’ve written our top tips for successful salary negotiation.

Salary Negotiation for the Employer

As your position is now, how much leeway have you got for salary negotiation and employment conditions? The answer to this can range from one end of the scale to the other. A primary factor is the discussion of salary, perks & benefits and working conditions discussed with candidates during interviews.

It’s likely that candidates have shared the current salary with you. However, it’s becoming increasingly illegal to ask for this information from candidates. It’s also likely that you have discussed the salary range for the open position with them too. This could have been within the job listing, further into the interview process or upon them asking you. It’s advisable that you do share the salary range as early as in the job listing as it prevents you from being bombarded with applications from over or under qualified people applying for every job that they see. By advertising the salary range, or exact figure, you’re more likely to attract candidates that are more suited to your position.

When we think about salary we usually think about the level of the position being advertised. It’s more than often the case that with higher level employees you’ll have more room to bargain and negotiate, as is the case with those in your business who are the sole person responsible for a certain role. These employees are also more likely to ask for particular benefits and perks if you won’t increase the salary – they really just see this as getting something else from the company without getting the salary total they wanted.

Finally, think about how badly you really need this employee for your organisation. Will you be able to find this particular skill set again? Will anybody else be able to replicate just what the candidate can bring to your team? You do also need to look at what other companies are offering to pay for the same position – if they can get the salary they want elsewhere then they probably will.

Market Factors to Consider

Use this quick checklist when considering salary negotiations and consider each with equal importance:

  • The level of the position within your organisation
  • How often you’ll come across somebody with the skill set and experience needed for the job
  • The career progress and the experience of the individual
  • The fair market value for the position
  • The salary range for the job within your company
  • The salary range for the job within your geographic location
  • Current economic conditions within your job market
  • Current economic conditions within your industry

There may also be company-specific factors which could impact on the salary for each position. These could be things such as; comparative jobs, the company culture, your pay philosophy and previous pay changes within the company, promotion practices and increases to pay in relation to training and/or experience.

As previously stated, it comes down to how much you want/need this person to be part of your organisation. If you display yourself as being ‘needy’ and showing that you cannot find anybody else to fill the position like this person could then salary negotiation will quickly turn into manipulation and you could end up agreeing to something that’s not feasible. If this happens it won’t bode well for yourself or the candidate. You’ll be constantly checking their work and scrutinising every aspect to ensure they really are worthy of the salary you’re paying them.

If other employees get wind of you paying the new candidate a large salary it will make it hard for them to integrate themselves into the team.  A successful salary negotiation leaves both the employer and the employee ready to start a successful relationship that will benefit the company as a whole.

A full-on and intense salary negotiation is a tiresome process for both parties. Mental and physical energy is taken up in the process and it can put a strain on the all-important employer/employee relationship before it’s really started.

In-Depth Salary Negotiation

Following the recruitment process, you have probably found the candidate you really needed for your company. Somebody who brings a lot to the table and will benefit the company massively. A sophisticated individual with the skills and experience to carry out your advertised role well. This type of candidate will, almost without doubt, challenge your offer of employment. Expect it and you’ll be more prepared to negotiate effectively. It’s common for candidates to ask for between £1000 and £5000 more than your initial offer.

Another point to remember is that a lot of these candidates will be applying for multiple jobs across multiple companies. You have no control over what these companies offer. This can lead applicants to expect a lot (or a little) from you.

Salary Negotiation Tips to Remember

These tips will help you to conduct successful negotiations. Remember that each situation is unique, and you should consider everything we’ve spoken about up to this point:

  • It’s not a competition. If either you or the candidate feels that they’ve capitulated rather than negotiated then both parties have lost.
  • In every case identify the most recent salary (and benefits) that your candidate has received. A lot of organisations request information about salary within applications. Candidates sometimes offer proof of salary. However, asking for this seems intrusive to candidates so a simple question should be enough for you.
  • Know what your limits are. Look at internally at salary ranges. What do you pay employees in similar positions with similar skillsets and experience? What is the economic climate?
  • Remember that if your salary isn’t negotiable that superior candidates will usually negotiate on different areas. These usually occur as:
  • Benefits
  • Paid for training
  • Paid holidays
  • Signing bonuses
  • Bonus pay
  • Commission
  • Car allowance
  • Flexible working hours
  • Working from home
  • Company electronic devices
  • Even if you’re dead set on this candidate and the benefits that they’ll bring to your company seem unbeatable, remember that you do have limits. You’ll come to regret exceeding these limits. It could mean beginning the recruitment process all over again you’ll save yourself years of stress and costs from exceeding limits for one candidate.
  • If your offer upon advertisement is non-negotiable then it’s a good idea to make this know to candidates as early as possible. This way you know that your chosen applicant is happy with what’s being offered.

An example of an offer that shows a candidate that they’re valued:

We’re offering you £45,000 in base salary plus the potential to make up to £10,000 in bonuses during your first year of employment. Other employees who have been with us for up to 10 years are within a couple of thousand pounds of that base. We hope this shows you how much we value you with this offer.

Additionally, as you build your accounts, some of our other business developers are making amounts exceeding £70,000.” – This organisation was trying to tell her that her base salary was non-negotiable but the potential of extra income from bonuses was high.

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