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How to professionally manage the salary negotiation process
Chances are you’ve had enough experience negotiating a salary when applying for a new job or promotion, but you may not have been through the salary negotiation process from the other side of the table.
So, what’s the secret to successfully negotiating a salary all while balancing budget constraints and candidate or employee expectations? Here are our top tips.
Get to know salary benchmarks for your sector
Staying on top of average salaries in your industry and for the job in question is crucial to the salary negotiation process. After all, you don’t want to start having discussions about money when you don’t know whether your interviewee or employee’s expectations are reasonable.
If you make an offer that’s too high, you could end up overinvesting in one person when those funds could be used to invest in other talent areas. Make an offer that’s too low, and you risk losing out to a competitor in acquiring the best candidate.
Compare average salaries by industry using our salary benchmark tool, which incorporates data from advertised roles and job placements over the past 12 months across a variety of sectors. With this information in tow, you can go into the salary negotiation meeting knowing where you stand and whether the candidate or employee’s expectations are reasonable.
Negotiate salary early
Contrary to popular belief, money talks don’t have to wait until the last stages of the interview or promotion process. Although salary doesn’t need to be the first thing you talk about, if you leave it to the last minute you could end up with very different expectations – wasting time for both of you.
Aim to confirm the candidate or employee’s salary expectations at several stages throughout the process, as responsibilities and expectations can change as you both solidify the responsibilities of the job.
If you’re hiring for a role, also make a shortlist of candidates and their salary expectations so you can weigh up investment into salary against each candidate’s experience and skill set.
Offer non-monetary incentives
Regardless of how much research you’ve done into salary benchmarks, factors like budget constraints mean you won’t always be able to meet salary expectations.
If that’s the case and you believe that the candidate has a lot to offer the business, consider exploring non-monetary incentives or future KPI-based salary increases to see if you can meet somewhere in the middle.
Employee retention initiatives like flexible working hours, training programs, and reward systems could be just the trump card you need to secure top talent even if you can’t pay the highest salary.
Lastly, if you believe that the candidate or employee is an asset to the business and his or her salary expectations are reasonable, it may be worthwhile re-evaluating your budget because great employees pay back their salaries in long-term value to the business.
For more tips on salary negotiation and benchmarks, take a look at our salary guide.