While most of us have had plenty of experience negotiating a salary as a candidate, handling salary negotiation from the other side of the interview table or as a manager can be daunting.
So, how do you talk about money while balancing budget constraints with talent acquisition and employee retention? Here are our top tips.
Research salary benchmarks
When it comes to salary negotiations, knowledge is power for both employees and employers. The last thing you want to do is go through the negotiation process without a clear idea of average salary benchmarks for your industry and the role in question.
Set the bar too high, and you’ll be overinvesting in one person when you could be investing in talent with other key skill sets. Set the bar too low, and you run the risk of losing valued employees or candidates by not offering competitive remuneration.
Take a look at comparative salaries by using our salary benchmark tool, which captures data from placements and advertised roles over the past 12 months across a variety of industries. Armed with average salary information, you can go into the salary negotiation meeting knowing where you stand and whether the candidate or employee’s expectations are reasonable.
Talk about salary upfront
Don’t be afraid to talk about money towards the start of the interview or promotion process. While it doesn’t have to be the first topic of discussion, if you leave salary negotiation to the final stages you could end up not seeing eye-to-eye – and that equals time wasted for you both.
Make sure to confirm the salary expectations of the candidate or employee at several stages throughout the process, as responsibilities and expectations can change as you both solidify the job responsibilities and requirements.
If you’re negotiating salaries as part of the hiring process, also make a shortlist of candidates and their salary expectations so you can weigh up investment into salary against each candidate’s skill profile.
If you can’t meet salary expectations, look at other incentives
No matter how educated you are on salary benchmarks, there will be times when you simply can’t meet salary expectations due to budget constraints or other factors.
If you see the candidate or employee as a highly valuable asset to the business, it’s worthwhile exploring non-monetary incentives or future KPI-based salary increases to see if you can meet somewhere in the middle.
Flexible working conditions, training initiatives, and reward programs have all been shown to boost employee retention – and it’s incentives like these that could be the trump card you need to secure top talent even if you can’t pay the highest salary.
Finally, if you feel the candidate or employee has a lot to offer and his or her salary expectations are reasonably within the scope of the job, it may be worth re-evaluating your budget – as great talent can pay dividends to the business in the long term.
For more advice on salary negotiation and benchmarks, take a look at our salary guide.