The aim of a salary negotiation should be a win-win for all involved
It is quite common for job seekers to negotiate their salary and benefits packages upon receiving a job offer from a company. Employers should be able to handle negotiations without sacrificing the company or incoming employee’s needs.
Usually, the candidate has come prepared to negotiate, and there are a variety of approaches employers can take to ensure both the company and employer’s salary requests are fulfilled. To do so, employers must first understand the need for negotiation.
Read more: Should you switch firms to increase your salary?
Salary negotiation primarily benefits employees as it gives them an opportunity to achieve their desired salary, but it also has some perks for the employers. For one, negotiation between the employee and hiring manager paves a path of communication that allows both parties to be open and transparent. It is an excellent opportunity for both parties to voice their concerns, which could build up rapport and communication as colleagues.
Handling a negotiation can reveal what working with the new employee would be like. For instance, a candidate may be reserved in their responses during job interviews or the negotiation may show a stronger side of theirs that could be useful in the workplace, showing the employee could have potential in a leadership role.
Facing salary negotiations can also improve the negotiation skills of the human resources team. Employees requesting for a higher pay does not necessarily mean one party will lose. The salary negotiation process is a time for both the employee and employer to find a middle ground where both feel satisfied with the compensation package being offered. The end goal of the negotiation should be a win-win for all involved.
According to CareerBuilder, 73% of employers in the US expect a salary negotiation on an initial job offer, while 55% of candidates do not try to negotiate for a pay rise due to feeling uncomfortable or fear of not being liked by the employer. Even so, it is best for hiring managers to be prepared for situations like this to avoid any misunderstandings and unfair results.
Below are some ways employers can take to have a successful salary negotiation.
Being knowledgeable about the average salary and the compensation trends in a particular career path is both the responsibility of the employee and employer. Knowing the average salary being offered by competitors helps set a realistic and fair bar on how low or high the wages of the employee can go. In addition, it serves as a basis on how to set the salary based on their position, experience level, and other factors.
Knowing the current salary trends helps employers explain the reasoning behind their counteroffer. It also helps employees understand how the salary was decided upon and why they are offering a certain amount.
It is advisable for employers to watch out for the most in-demand skills and roles within their company and industry and adjust their salary ranges accordingly.
Employers should understand what the employee needs when negotiating a salary offer. A salary offer relies not only on the wage but also on the other benefits and compensation offered. If a pay rise is challenging to offer, maybe adjusting other employment benefits such as leave credits, health benefits, flexible work arrangements, allowances, and bonuses could appeal to the employee.
Employers should create an employment agreement that is more accommodating towards the employee, all the while making the company feel good with providing it. Asking the candidate what they look for in a compensation package can help employers form the best employment package to offer.
It is essential for employers to explain their decisions based on facts and data. But sometimes, these points do not come across as intended due to poor explanation or missed points when explaining. To combat this, employers need to be prepared with the key points to correctly point out how the company’s process works and how the results came to be. Explaining the critical points to employees allows them to understand the company a bit more and to see whether they are a good fit with the company culture and what they can negotiate for.
It is wise for hiring managers to have notes and data on hand as support to the key points and to help answer any follow-up questions the employee might have. Practicing the delivery of the critical points before the negotiation is a great way to ensure the employer knows what to say to avoid any miscommunication or forgetting to mention any details.
The way the words are delivered during a salary negotiation is just as important as its context. Therefore, employers need to be confident and trust in their decision-making and salary negotiation processes. When employers are confident, the more likely employees are to trust them and will be more considerate of the employer’s offer.
Employers need to find the right balance when it comes to confidence. Having too much confidence can lead to employees viewing them as arrogant and boastful. Meanwhile, lacking confidence could lead to over-explaining or looking disinterested in the employee’s requests. It is best for hiring managers to confidently give a clear, brief response that covers all the relevant key points and explain further in detail when there are any follow up questions.
Transparency and honesty are important in every salary negotiation. For example, suppose the employee asks for a raise that is beyond what the company can offer at that moment. If the employer gives in to the request so as not to lose the interest of the employee, then the company would have difficulty keeping up with the salary payments in the long run. If the employer offers a low pay rise that is unfair to the employee, the same goes. If one party is not satisfied with the results, then it is well in their right to voice out their concerns to avoid any conflicts in the future.
Employers should also be honest when setting employment packages and offering an updated pay rise. Misleading employees with a salary increase lower than the average for their role and expertise can lead to unhappy employees. They could even become a legal issue in the long run. Being fair and honest with the salary packages being offered should be the topmost priority of employers.
Read more: The science behind salary negotiations
When dealing with salary negotiations, employers need to be firm while staying open to all options available. Employers need to keep the lines of communication open during negotiations and to give the employees the opportunity to voice out any suggestion or concerns before shutting the idea down.
