6 Steps for Successful Offer Negotiations
What happens after the interviews are complete and your top candidate has been chosen? Let the negotiations begin…
Does this sound familiar? HR signs the offer letter, it’s delivered to the candidate, and then, the candidate expresses concern about the rate. You may be thinking: Was the compensation you offered not what they expected? Should we continue the negotiating? Do we make the pay package more competitive? Many times, these factors depend on what internal procedures your company has in place.
Here are some tips on how to the handle salary negotiation process:
1. Know the market:
Ensure you have recent and accurate pay comps by consulting a salary data expert. What are your company’s job grades? How balanced are your internal salaries? Are there any discrimination discrepancies? SDHR Consulting can help you with a well-researched and current salary compensation plan from our professional HR Consultant team.
2. Clear equity:
Establish internal practices at the beginning of the hiring process, including, the salary range for the position, whether there is room outside the salary range, and what benefits are offered for this position. Ensure everyone involved in the hiring process is aware of the salary range, as well as how it relates to experience and qualifications, and provide necessary guidance on what should remain confidential and what can be communicated to the candidate.
3. Get-to-know:
Get to know it all. Once a candidate has been identified, do a deep dive into what is most important to the candidate. Is it monetary rewards, culture, benefits, time off, or a flex schedule? Have your 2nd and 3rd interviews verify this as well. Not only will this create an environment of well-being with the candidate, but it also opens the door to accurately gauge the culture connectivity and how successfully they will fit into your organization.
4. Expect negotiation:
While a salary may have been discussed in early interviews, evaluate your audience as things progress. It could be that the potential employee feels as though they should always negotiate terms once they have a full understanding of the position and its duties. In these situations, your choices are to agree, make a counteroffer, or stand firm. It is important to consider the value they would bring to the company and role, internal equity amongst your team, and if there are other available candidates with a related skill set.
You also need to know your walk-away point; not the minimum you can pay for this role, but the maximum.
What can your company offer? Some companies may be able to offer additional monetary compensation, while a nonprofit organization, for example, may be able to compete in extra time off, creative benefits, personal benefits, or alternative benefits, such as flex-time or a shorter workweek. Is every other Friday off an option? Or can you accommodate unlimited Paid Time Off in certain situations?
Alternatively, do you offer child or elder care discounts? These non-wage perks may adequately replace a portion of a standard salary for some individuals, allowing an organization to successfully compete with others for top-tier talent.
5. Non-salary perks:
If a higher salary is not in the budget, there are other options to consider in your total compensation package that could help bridge the financial delta. Competitive benefits are the most common; medical, dental, and vision insurance with a percentage of premiums covered by the employer along with a retirement savings plan with matching employer contribution. Additionally, offering an option of a lower benefits waiting period could sweeten the deal.
6. Additional ideas:
Do you offer to cover any technology needs or have a monthly cell or internet reimbursement plan for corporate use? Does your company offer health programs or gym membership discounts? Are there stock options available? A hybrid or remote schedule could help offset the cost of commuting and are very compelling to some candidates.
No matter what is offered to your candidate, always carefully consider how this may affect internal equity to ensure there are no large or unexplained discrepancies. Just remember, offer negotiation is normal and to be expected. Knowing the market, your candidate, your company policy, and the threshold and ceiling for the position are all key elements of a successful negotiation.
