12 Tips for Salary Negotiation for Employers
It’s a notoriously hard conversation to have: the dreaded “comp talk.” Everyone recognizes that salary negotiation is difficult for job seekers — after all, there’s lots of emotion, aspiration and fear baked in. But it can be equally daunting for employers.
Especially in a labor market as tight as ours, there are many layers of needs and restrictions for employers, bringing plenty of anxiety to the process for recruiters and hiring managers on the front lines of building teams. And it’s a tricky line to walk: no one wants to be responsible for blowing it with a highly desirable candidate — but you also don’t want to hire someone in a salary range that’s either unsustainable or unequitable.
There’s no shortage of content geared toward job seekers looking to negotiate a higher salary, but there’s not a lot of support for employers on the other side of that process.
Here are our top 12 tips for successfully walking that line:
1. Do advance research.
Before posting any open role, start with a solid grasp of your internal budget for the salary, then look at salary ranges on Glassdoor for similar roles in your area. By conducting solid compensation analysis in advance, you ensure that you calibrate the job requirements properly — and that you’re not surprised by the job seeker’s salary expectations.
2. Clarify job level early.
When there is a discrepancy between what salary a candidate is hoping for and what an employer is able to offer, it is usually because there’s a misunderstanding in job level or skill requirements. Be sure to think carefully about job scope before posting your open role. If you add skill requirements that are nice-to-haves, you’re more likely to attract job seekers outside of your salary range, making agreement on compensation a likely sticking point later in the process. By laying this early groundwork, you minimize the likelihood of a failed salary negotiation later on.
3. Don’t require salary history.
Consider removing any indication of current salary from the application process. People don’t always need to increase their income with every job move, and by asking for it in advance many candidates in this situation will get scared off because they fear their salary history prices them out of the role, which could mean your best candidates won’t even apply. And on top of that, in many states it’s even illegal to ask for prior salary history.
4. Specify a salary range up front.
When you’re ready to post your open role, be sure to add a salary range on your Glassdoor job post. Research shows that the top piece of information Glassdoor users want when evaluating a job or employer is detail on salary/compensation packages.1 By clarifying a salary range up front, candidates will opt in or out early, minimizing the possibility of coming to a salary stalemate later on.
5. Fully evangelize your benefits.
Whether your salary ranges are competitive in the local labor market or not, it’s important to be loud and proud with the benefits your company offers. And while elements like health insurance and paid time off are important, don’t be shy about promoting the less-common benefits offered by your workplace. The unique benefits your company offers might be just the antidote to a lower salary.
6. Never lead with your best offer.
While it might be tempting to offer as much as you can when you find that rare perfect candidate, most job seekers assume that the starting offer is negotiable and will ask for more — whether or not the offer was within their range. When you can’t go higher, a candidate may interpret that as a sign that you’re not excited about and invested in their joining the team.
7. Let style inform your next move.
How a candidate acts during the salary negotiation process is highly relevant — especially in roles that require cross-functional collaboration. Pay attention to how they handle interactions and use it as an opportunity to further assess fit. If the candidate’s negotiation style is fantastic, it might be appropriate to up your offer. On the flip side, if a candidate’s style is off-putting, you might choose to not budge.
8. Don’t bail based on budget alone.
If there’s a discrepancy between the candidate’s target income and your budget, don’t automatically write that candidate off. Instead, start an honest dialogue about the other benefits you can offer that might push him or her over the line. If you’ve determined that there are some benefits you offer that might make all the difference — like the ability to work a flexible schedule or extra vacation time — you can consider leaning into that perk.
9. Leverage data and empathy equally.
If you need to hold firm to a certain salary cap, be sure to leverage the salary data for comparable roles from Glassdoor to justify your limitation. It requires empathy, but it is possible to explicitly say that your offer is highly competitive, while still making the candidate feel highly valued.
10. Be on the candidate’s side.
Without giving false hope, be sure to hear out a candidate with an offer in hand — whether that offer is from your company, another company or both. It’s important to keep a clear head and really listen. You obviously don’t want to wait too long before countering with a higher offer, but you don’t want to be impulsive either. Take the time to truly hear the candidate’s needs. Pay close attention to how they’re leaning, and be sure to look for low stakes ways of accommodating their needs. Sometimes just feeling more “heard” at one company versus another is all it takes to tip the scales in your favor.
11. Make peace with your final offer.
There will be times when you simply can’t go any higher during salary negotiation — even if you really want to — and that’s okay. Be as authentic and earnest as possible when conveying how you really wish your budget allowed you to go higher. Mention that one of the things you love about your company is how responsible it is with budget, which is likely to lead to great, sustainable growth. Two good outcomes can come out of this approach: Either your candidate will (a) love how you handled it, agree that they want to work for a great, sustainable company and say yes to the offer, or (b) pass on this opportunity but keep you in mind for a more senior, higher-paying role in the future.
12. Close your negotiation on a high note.
Whether you found agreement on a salary or your candidate declined your offer and moved on, do your best to end the interaction on a positive note. Especially if the negotiation was a lengthy process, it might be tempting to quickly drop communication with a candidate who has chosen to walk away from an offer. After all, there’s still a role to fill! But for the health of your candidate pipeline, it’s important to tie up communication with a bow. Wish your candidate the best of luck and encourage them to stay in touch. You never know when they — or a connection of theirs — will knock on your door.
Ultimately, employers have to balance the need to stay within a tight budget with the goal of hiring the best person for a job. If, at the end of the process — whether you’ve won the candidate or not — you know you’ve done your due diligence with the steps above, you can take comfort knowing that it’s a tricky process for everyone involved. There’s always a silver lining — even on the rare occasion that you feel a good one got away.
- Source: Glassdoor.com U.S. Site Survey, November 2019