When it comes to hiring the best candidate, many employers face great challenges during salary negotiations. Meeting daily expenses is a growing concern among most employees, who are hence unwilling to compromise on the pay package and benefits offered, in exchange for the experiences and skills they offer to a business. In recruiting top talents, HR managers of companies need to have salary negotiation strategies in place to make sure they do not spend much more than they can earn.
Employers should have a clear understanding of both parties’ objectives to negotiate a fair, market-based compensation package that is competitive and objective. Such a win-win negotiation will create a great long-term relationship, wherein both parties are mutually satisfied with the deal. Here are some salary negotiation tips employers and HR managers can adopt.
Valid market research is required to conduct an effective and credible salary negotiation with the selected candidates. HR managers can take advantage of some accessible, reputed salary guides from industry experts, as great reference material can help determine the appropriate salary for the specific job roles and responsibilities.
First of all, you can collect data on the pay ranges for jobs in your industry at various experience levels before discussing salary rates with potential hires. Candidates with more experience may expect a greater salary than those who are just starting out in their career. Research your major competitors that provide comparable services. When conducting market research, look at job boards that include salary information and evaluate how your company compares, especially within your region.
In a salary negotiation, employers should not put aside other types of compensation, such as incentives, travel reimbursements, and employee perks. Some employers may be reluctant in hiring star candidates with adequate experience and expertise due to the tight budget. They end up hiring average talents at a more affordable cost to fill in the empty positions.
If money is the issue, then leaders need to see beyond material compensation. Value addition and perks offered to employees in the form of attractive compensations and other benefits can bridge the gap between employees’ expectations and the employer’s tight budget. Flexible working hours, health insurance, transportation allowance, subsidized gadgets, as well as extra vacation time are some valuable benefits worth exploring for HR managers.
Before salary negotiation, it is important to ensure that the employees fully understand their job requirements. Reiterate their offered roles, your company’s working conditions, terms, and available benefits. This would help in developing a fair objective relationship between the employer and the employee. By establishing the framework early on, you reduce the probability of an unsuccessful salary negotiation later on.
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Begin by stating a particular salary range. This encourages candidates to readjust their expectations while also providing them with a sense of a fair pay range. Anchoring is the process of influencing someone else’s expectations by making the initial offer. Mentioning the first salary estimate signals to the candidate how much you value the position, which might influence how they see a job offer. During this stage, HR managers can lower the salary amount offered and later level it up when candidates decide to bargain. This strategy allows employers to keep on the budget allocation while ensuring the best talents are satisfied with the job offer.
In this strategy, try to find out what the candidate’s most recent pay and benefits were. It’s acceptable to ask for a salary range sooner in the application process. This will give you decent information of what your candidate is searching for. Instead of strictly referring to the company’s standard starting salary structures and benefits, HR managers should devise more innovative ways towards making adjustments to the specific job roles as per the recent job market considerations. Since talents with relevant experience and qualifications are valuable assets, some positions wherein talent is on-demand such have better compensation and pay hikes. Anticipate this so you will get a rational approach on why they set a specific amount.
As an employer, you want to hire people who are determined to join the team at the agreed-upon salary. Therefore, allow candidates to study the offer and analyze the advantages and risks before giving you a final response. It is always a good idea to get them to thoroughly consider the major decision of working for a new employer, so be patient with applicants once an offer has been made.
Once you have reached your negotiating limits, make it obvious to the applicant that you cannot manage to provide any greater salary. Transparency when disclosing your company’s resources shows respect and saves both you and the candidate time when trying to negotiate further. If a decision has been made, either the salary is agreed or denied, then you have to conclude the discussion on a positive note.
Salary negotiation is challenging indeed, so HR managers need to implement the right strategies in order to fetch the right candidate within the current budget. Career growth opportunities and annual wage increases should also be considered when negotiating a salary with a potential hire, such that they can anticipate long-term investments made by the company.
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