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How to run the salary negotiation process
While you might have had experience negotiating a salary during the interview process or when applying for a promotion, salary negotiation from a manager’s perspective is a different story.
So, how do you balance budget constraints with talent acquisition and staff retention during the salary negotiation process? Take a look at the tips below.
Familiarise yourself with salary benchmarks
Understanding average salaries for your sector and the job in question is key to a successful salary negotiation process. After all, you don’t want to start having discussions about money when you don’t know what the benchmarks are for your industry.
If you offer too little, you’ll run the risk of losing your chance to secure a valuable candidate or retain a trusted employee. If you offer too much, you may end up overinvesting in a single person when you could be investing in other talent areas.
Compare average salaries using our salary benchmark tool, which uses data from advertised roles and job placements over the past 12 months across a variety of industries. With this information, you can be confident that you know where you stand and whether the candidate or employee’s expectations are reasonable when it comes to negotiating a salary.
Don’t leave salary negotiation to the last minute
Contrary to perceived wisdom, salary talks don’t have to wait until the final stages of the interview or promotion process. While you don’t have to talk about money right away, if you leave salary negotiations to the last minute you could end up with very different expectations – and that means time wasted for both of you.
Be sure to confirm the candidate or employee’s salary expectations throughout the process, because job responsibilities and requirements can change over time.
If you’re filling a role, make sure to record salary expectations for your shortlisted candidates so you can measure investment against each candidate’s value to the business.
Consider non-monetary incentives if you can’t meet salary expectations
Regardless of how well informed you are about salary benchmarks, budget constraints and other factors mean you won’t always be able to meet salary expectations.
If you believe the candidate or employee will be of great value to the business, consider offering non-monetary incentives of future goal-based salary increases to see if you can reach an agreement.
Flexible working hours, training programs, and employee reward initiatives have all been shown to increase employee retention – and these could be just what you need to secure a top candidate even if you can’t meet salary expectations.
Lastly, great employees are valuable assets to any organisation. If you’re confident that the candidate or employee has a lot to offer and his or her salary expectation are reasonable, it may be worthwhile re-discussing your budget.
For more tips on salary negotiation and benchmarks, take a look at our salary guide.