Win-Win Salary Negotiations
Author of this post:
briana, October, 1st, 2012,
3 comments
A win-win situation is in a salary negotiation is when the candidate feels valued, the employer feels they are getting value and both feel they are in a long term relationship, not short term ‘settling’, whether for a low-paying job on one side, or an overpaid unknown on the other. Salaries affect the entire organization on many levels: financial, staff morale, work culture and quality of employee among others. Review the organization’s pay system and methodology on a regular basis to ensure you are staying current.
- Know what type of salary the candidate will expect, whether asking in the job posting, or by learning how much they earned previously while reference checking. Don’t be blindsided by what a candidate asks for.
- Research the typical salary range in the industry, job level and location. Know if you are offering more or less than the going rate. The candidate will likely have done this research as well.
- Expect tough negotiations from more experienced, higher level candidates – and after all the scrutinizing, fact-checking and interviewing this stage of the process needs concentration. Know your highest number and all salary information before going into negotiations. Even if the salary isn’t negotiable, prepare to discuss benefits, paid time off, tuition assistance, signing bonus, car allowance, cell phone, and any other possible perk
- Clearly communicate those benefits to any candidate: people value perks and benefits such as health care as much as a higher salary. If they are not clear on what is being offered, they may ask for a higher pay.
- Even if you have to start over with a new candidate, stay within the organization’s limits. This will potentially save years of headaches, both financially and among staff who may feel slighted.
- What are the company’s expectations for the new employee? Instead of risking overpaying by having expectations that are too high, have a salary review in 3 or 6 months to discuss performance and possible pay increases.
- Think long term: perhaps in today’s economy you can get away with paying highly skilled people less, but they will always be looking for better opportunities down the road.
- Consider work culture: competitive environment, or team atmosphere? The pay system has a huge impact on how employees interact and treat one another.
- What are the HR strategies? Are you tasked with attracting an elite, highly skilled workforce? You may need to offer higher than the industry standard. If cheap labour and a high turnover is not a problem, than pay less.
- Consider pay as an incentive to motivate staff. Carefully weigh everyone’s base salaries, wage
- increases and bonus pay. By rewarding one worker will you be de-motivating others who have worked hard? Or by rewarding everyone equally, do you lessen the motivation of a star employee?
- Have a clear pay philosophy. Don’t publicize individual salaries, but make the reasons and methods behind determining pay transparent and consistent.
- One successful method is to have set salary ranges for each level within the organization. More qualified, experienced and skilled employee will earn at the higher end of the range, while newer employees will likely start at the low end. These helps keep everyone on the same footing, while allowing for salary increases and negotiations within a particular range.
Remember that no one wins if one party ‘loses’ the salary negotiation. Either the company is paying too much, or the employee is unhappy with their wage. Always strive for a win-win approach.
