Salary negotiations are part of the hiring process. Your goal is to find a compensation amount that fits your company’s budget and the candidate’s skill level.
You want everyone to feel like they win during the salary negotiation process. This sets the tone for your new hire’s employment with your organization.
Negotiating salary can be challenging. These 3 suggestions can help:
1. Conduct Salary Research
Look into compensation for similar jobs in your industry and geographic area. Understanding the industry standard makes it easier to remain within your budget while making a competitive offer.
Determine what the average compensation range is for employees with diverse skill levels. This provides insight into what your competitors are offering for positions similar to yours.
Pay attention to state laws regarding asking candidates about their salary history. Although you may be tempted to find out how much a candidate made in a previous role and negotiate accordingly, you must remain compliant with all laws and regulations.
2. Understand Candidate Expectations
Ask candidates what their salary expectations are when first talking with them. This saves time in your hiring process.
If you wait to discuss salary during the offer stage, a candidate’s expectations may be beyond what your company can pay. Then, you would need to spend more time finding another candidate.
Do not be concerned if a candidate’s initial salary expectation is above what your company can offer. Many candidates begin with a high number because they typically have to negotiate down.
Be transparent when you reach your compensation limits. Explain your reasoning so the candidate understands why.
Include the factors that put a candidate near the higher or lower salary range. Knowing why you suggested the salary encourages the candidate to accept it.
3. Make Your Initial Offer
Begin negotiating salary with a lower but reasonable number. The candidate likely will come back with a counteroffer.
Negotiate salary until you come to an agreement. Let the candidate know if you reach your compensation limit.
If you cannot provide the desired salary, consider offering additional benefits. A signing bonus, more paid time off, or additional continuing education increases the monetary value of the job offer.
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