You’ve found a person who seems like he or she will be a perfect fit, not only for the position your business has open, but also for the culture and personality of your company. The next phase, and the phase that can make or break the hiring process, is negotiating salary and benefits. In a perfect world, you’ll offer a sum, the candidate will accept, and you’ll have a great new employee. But, since that is often not what happens, knowing how to interact with and respond to a candidate during a negotiation can help you land on a salary that works for both of you.
Don’t Rush Things
It might seem like a good idea to ask candidates for salary requirements up front, as that way you can eliminate anyone who’s too expensive and zero in on the candidates who seem more affordable. But, talking about salary before a candidate has a full understanding of the job or eliminating a candidate on the basis of past salary alone can be detrimental. Instead, wait until nearly the end of the process before you discuss salary. That way, you won’t scare off any potentially excellent candidates.
Figure Out Market Value
Any potential employee worth his or her salt will do some salary research before meeting with you. You’ll want to do the same, to make sure the amounts you are offering are competitive. When figuring out the range of salary and benefits you can offer an employee, look at what similar companies offer to those with comparable experience levels. You don’t want to risk offending a candidate by offering a salary that is significantly lower than the going rate. But, you also don’t want to pay more than needed to land a hire.
Understand When the Ball Is in Your Court
When you’re hiring, there will be times when the ball is in your court and there will be times when the ball is in the candidate’s court. If you advertise for a position and you get a lot of stellar applicants, the ball is usually in your court as far as salary negotiations go. There are plenty of people who would be perfect for the job, so you probably won’t have to offer the top amount you can pay. But, if the position is very specialized and difficult to fill, the ball is likely to be in the candidate’s court, meaning you have less leverage when it comes to negotiating.
Remember It’s Sometimes About More Than Salary
For many candidates, the amount of money they take home each pay period is just one perk among many when working at a company. During your negotiations, if a candidate asks for more money than you can afford and there aren’t a lot or any other options out there for you, try to negotiate areas other than salary. For example, you might be able to offer a candidate a higher match on his or her 401(k) contributions or move up that date on which he or she is vested in the plan to make the position more appealing. You might consider offering more flex time or vacations days, in exchange of a lower salary than the candidate hoped for.
If your company has a set salary structure and a desirable candidate is requesting a sum outside of the pay grade, one option is to offer a signing bonus instead of increasing the salary offer. A signing bonus won’t solve your problems if you’re on a strict budget, but it can make a candidate happy and help you avoid distorting your company’s salary scale. Additionally, a signing bonus can be a great way to discourage job hopping. You make the bonus continent on the employee staying with your company for at least a set amount of time. You worked hard to land the right employee; you want to make sure he or she is going to stick around.
If you need help figuring out how to work the salaries of new hires into your company’s financial plan, the virtual CFO services offered by New Direction capital can help. Contact us today for more information on how you can streamline the hiring and salary negotiating process.
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