Did you lose a talented candidate by lowballing a salary offer?
Salary negotiations are a two-way street where the employer and candidate meet with their individual expectations and must come to a mutually beneficial agreement. When you’re an employer, it’s essential to offer a salary that justifies the candidate’s talent and experience based on the competition in the industry. Although you have a bottom line to worry about, making an unrealistically low salary package can convince the candidate to think otherwise, particularly when they’re exploring different job offers.
That’s why companies hire executive recruiting firms because it’s not easy to get salary negotiations right.
Let’s find out the ideal ways to approach salary negotiations so that you don’t make the same mistake again. At the same time, discover how to retain candidates after they’re hired by complying with industry standards to keep your bottom line profitable.
Are you aware of the contemporary salary landscape?
In the contemporary hiring environment, there are several names that you may have come across, including the Sansdemic, the Great Re-Evaluation, and the Great Resignation. However, irrespective of what you call it, you cannot deny that it’s a market dominated by the candidates, and employees have all the leverage now. In such scenarios, employers must do everything possible to attract the top talents and retain them for a long time. And the best way to achieve that is by wooing skilled employees with attractive salary packages.
As per the NormandinBeaudry poll, more than one in ten firms, and some by more than 20%, expect to boost their pay expenditures. In 2022, average wage increases that were approved were 3.8% more than anticipated. Along with a challenging job market, inflation is a significant element of this increase. Employers are responding in the only way they know how: by increasing pay rates to keep up with employee demand for more compensation to offset rising consumer prices.
So, how do you make it through this?
Top tips to conduct salary negotiations
If you’re interviewing potential new hires, ensure that the hiring managers are ready for the salary discussion. That being said, they must be experienced and comfortable at negotiating, as well as have guidelines on the limit of the offer that is to be made to the candidate.
Wondering how you can keep candidates happy without overspending on payroll or isolating the existing employees?
Check out the following salary negotiation tips:
- Avoid lowballing the candidate.
If you have already lowballed salary offers and suffered for it, the best thing would be to focus on not repeating it. Hence, do your due diligence by conducting detailed research so that you can meet the salary expectations of the contemporary market. Although many would agree to lower pay, especially when they’re underqualified, desperate to leave their present job, or unemployed, but when you undercut them on compensation, even if they accept it, they won’t think twice and will leave the company in search of greener pastures.
- Take a collaborative approach
Most businesses make the mistake of approaching salary negotiations with a “we against them” mindset. The idea is that employers and workers should not be at conflict, and the commencement of a partnership should not begin in this manner. Look at salary negotiations as a situation where both parties come to a settlement that benefits everyone. It should not be like giving in to certain employee demands or agreeing to a specific salary package. That’s why a collaborative approach is the right way, because it satisfies everyone.
Wondering how to negotiate collaboratively?
To begin, have a salary range in mind, but don’t be too rigid with a specific number. Then offer yourself some space to negotiate when the candidate wants more than the first offer. Now you need to contemplate the things that are driving the organisation’s compensation policy. Is it dependent on seniority? Also, taking into account the amount of fairness and equity in the process, Lastly, ask strategic and targeted questions to get a good grasp of the motivations behind the candidate’s demands. Prior to salary discussions, knowing the answers to these questions will ensure that you have the necessary facts on hand.
- The offer is not just the salary
Remember, there are other ways to find a compensation solution that can satisfy everyone. Take into account the various things that go into the overall compensation. You can take advantage of the different benefits and value additions to convince them to accept the offer. On the other hand, base the offer on these and use them to come up with a compensation plan that works for everyone.
- Retirement plans
- Flexible work arrangements
- Equity/profit sharing
- Paid time off
- Health and wellness benefits
- Signing bonuses
- Holiday bonuses
- Performance bonuses
- Longevity bonuses
- vehicle or phone allowance
- Childcare benefits
- Meal stipend
- Savings plans
Several candidates will accept the salary as per your preferences when they find they will get paid time off or full health coverage. It’s a great bargaining idea that helps both parties.
- Have a different approach
If the applicant you’re negotiating with either applied for the position or was headhunted, make sure to adjust your strategy properly. Keep in mind that you reached out to the headhunted prospect when you’re bargaining with them.
Be prepared to talk about the corporate culture, work environment, and work-life balance, and be upfront about the wage range and perks earlier in the process. Be prepared to “sell” what your organisation provides to potential employees because they might require more than a competitive wage to quit their present position.
Bring your best offer to the table for the headhunted applicant. They will almost certainly receive a counteroffer from their existing company, and if you truly want to hire that applicant, you may need to counter that counteroffer.
- Take advantage of your recruiter’s expertise
Lastly, if you’re working with a recruiter, trust them and make use of their knowledge while negotiating pay. These people make it their business to be familiar with the current job market; they are aware of the typical salary for the roles you’re attempting to fill. Additionally, because of their connections with the talent they represent, they are aware of the potential concessions that certain job seekers may be ready to make in terms of pay.
Konfer Executive Group is one of the most reputable and trustworthy talent recruitment companies that can help you identify the best candidates for your organization. Due to our extensive experience, we are adept at handling difficult recruitment situations. As one of Germany’s top executive recruiting firms, we have assisted several foreign businesses in finding qualified candidates. Contact us right away if you have any questions regarding our services.