7 Things Hiring Managers Should Never Forget When it Comes to Salary Negotiations

By Manish Dudharejia - Dec. 19, 2018
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Editor’s Note: This is a guest post by Manish Dudharejia – Founder & CEO of E2M Solutions. His opinions are his own.

Most organizations would pay top dollar willingly if an employee is a befitting choice and brings value to the company. However, salary negotiations are still going to be an essential part of the recruitment process.

Recruitment managers have the crucial responsibility of negotiating a compensation that’s suitable for both the candidate as well as the company. If you pay too much, your boss isn’t going to be happy. If you pay exceedingly less, you fail to recruit the best talent your industry has to offer.

All candidates are well within their rights to negotiate their compensation. So, as a hiring manager, you may have to be prepared to haggle during the recruitment process.

Remember the following seven things if ever you’re involved in a salary negotiation.

1. Offer the right compensation from the start

One of the most common mistakes hiring managers make is to assume that the candidate is unlikely to know what your company is willing to offer. Thanks to the internet, candidates can now get a fair idea of how much a company is likely to pay to someone with their experience, education, and skills.

Not just experienced candidates, but even entry-level applicants are highly likely to use tools such as Glassdoor’s database of companies and average salaries. In fact, one of the growing recruitment trends is salary transparency, especially for millennials and Gen Z candidates. You need to take this factor into account when offering compensation.

So, instead of getting down to a lot of haggling that leaves both parties unhappy, why not start the discussion with a fair salary in the first place? However, leave yourself with some wiggle room in case the candidate decides to negotiate further. But, make sure you are paying within your cap limit. Also, take the candidate’s experience and the current job market into account when doing this.

2. Don’t react without listening

Most salary negotiations are intense. Even entry-level candidates will bargain hard to counter your initial offer, let alone those with significant experience. However, this isn’t a competition. Stress can get the better of us all. You don’t need to be arrogant during the conversation.

Keep your cool during the negotiation. One way to ensure the conversation goes on smoothly is to not appear too aggressive. Listen to what the candidate has to say before reacting. Make user you listen with the intent to understand. Take your time to ponder over what their expectation is, and then proceed with your best offer.

3. Build trust

Is better pay the only reason people want to join your organization? Of course, money plays a critical role in taking up a new opportunity. But, it’s not the only reason. People are also looking for emotional and intellectual support and a rich work environment, personal growth, and other benefits such as healthcare and paid holidays.

However, candidates are willing to talk about all this if you build a bond of trust with them before the negotiations begin. There may be several interviews before you sit down for the salary discussion. Advise your team to build trust during these rounds with the candidate.

Try to get to know your potential employees and let them know about your organization, work culture, and opportunities for personal growth as much as possible. This relationship will help you reach a middle ground amicably.

4. Be willing to negotiate

Your attitude as an employer during the different rounds of the interview and the salary negotiation process sets the tone for the candidate’s experiences as your potential employee. The candidate must learn that you are negotiating willingly. This attitude shows that you care for your employees.

That’s why you should never start your negotiations with a “Take It or Leave It” attitude. For many candidates, their profession is not just a means to an end. So, you shouldn’t see their skills, experiences, and professional achievements through these lenses.

It will only create distrust towards your organization. Further, if word gets out that your company is too money-oriented, you may lose the best talent in your niche. So, make sure you are negotiating willingly.

Also, give the candidate some time to consider your offer. They have a lot on the line here. Even the smallest mistake can set their career back. So, be reasonable. Give them at least 24 hours to think it over. Don’t push for an immediate answer.

5. Consider offering other (non-monetary) benefits

Most companies, especially small and medium ones, can’t afford to pay a the highest base salary on the market. However, you can create a compelling offer without paying a hefty base salary.

For example, you can offer sign on bonuses, performance incentives, commissions, or shares, among other things. You can also award non-cash benefits such as holiday allowances, health insurance, pension, gym or club membership, or perhaps a company car. Fortunately, most skilled and experienced employees are well aware of this approach.

For example, take a close look at the candidate’s current salary breakup. Depending on the paystub generator tools used, you will see various deductions in their current paycheck. It will allow you to understand what their base salary is and how much they earn in perks and benefits. Make your offer accordingly.

6. Know how badly you need the candidate

Although you have to negotiate willingly, you don’t have to step out of the comfort zone for every candidate. You should decide how badly you need the candidate before sitting down for negotiations. It is better to discuss this with your bosses and the respective departments before the interview process begins.

Take into account factors such as how long you will need to wait until you can find a similar candidate, how will it affect your organization during this time, and if you can afford to pay what the candidate wants. Depending on the answers to these questions, you can agree to pay what the candidate asks, make a counter offer or start searching for someone else with the same set of skills.

7. Know when to walk away

Despite making your best offer, if the candidate continues to make a demand that is beyond your salary range, you will need to walk away from the negotiation and take the offer off the table. In most cases, candidates ask for more money if they have another offer coming in.

You should know your ceiling from the start. Stay within the given range, and step away if you feel you aren’t getting anywhere. Just make sure you consult all the concerned individuals before making this decision.

Salary negotiation is one of the most critical obstacles that companies have to overcome in their effort to recruit the best talent in their industry. Most people consider salary negotiation as a competition. It shouldn’t be though. Hopefully, with these seven tips, you will be able to turn it into a pleasant process. Try them today to keep your doors open for healthy salary negotiations in the future.

Manish Dudharejia is the President and Founder of E2M Solutions Inc, a San Diego Based Digital Agency that specializes in Website Design & Development and eCommerce SEO. With over 10 years of experience, Manish is passionate about helping online businesses to take their branding to the next level.


Manish Dudharejia

Manish Dudharejia is the President and Founder of E2M Solutions Inc, a San Diego Based Digital Agency that specializes in Website Design & Development and eCommerce SEO. With over 10 years of experience, Manish is passionate about helping online businesses to take their branding to the next level.

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