Every hiring manager should be gunning to hire the best in the market while staying within budget. There is nothing worse than investing countless recruitment hours into a top quality candidate and then losing them in the offer negotiation stage. Here are some tips to help you effectively manage the negotiation process.
1. Decide on Your Dollar Limit and Be Creative with Perks
Start by setting your limit, meaning the maximum amount of salary dollars that you are allowed and/or willing to pay to fill the role. Then start thinking about what perks you can offer; which factors, outside of salary dollars, would motivate you to want to work there?
Many companies offer work from home days or an additional week off during Christmas or slow periods. You may consider an annual performance bonus, shares in the company, or retention bonuses that are paid out at various periods of longevity (the longer you stay, the more you get). If you provide a company car, perhaps you can sweeten the pot with favourable fuel and maintenance package, including upgrades based on performance. Whatever you come up with, make sure that all added perks are legal, tax efficient and appropriate.
2. Know What the Competition/Market Is Offering
Whether you are interviewing a candidate or networking with your competitors, you should always be asking about current salary ranges within your industry. If you still aren’t sure what your competition is paying, headhunters are always a valuable resource to tap for current compensation ranges.
Some industries, like software, technology and finance, are very transparent and it’s relatively easy to find out where the low and high thresholds sit. If your industry is more secretive, you can also turn to the web for answers. There are many salary surveys available for purchase in almost every vertical. You can also research sites like payscale.com, glassdoor.com, and salary.com that will point you in the right direction.
3. Be Strategic
Negotiation 101: Don’t start with your best offer. If your salary range is $80-90k, sell candidates on the $80k salary throughout the interview process. If they ask for more and you think they are worth it, give them $90k. Your candidate will be very pleased with your flexibility and generosity.
If the employee is happy to take the job at the first salary offered, you’ve saved some salary dollars from the bottom line!
4. Present a Fair, Written Offer in Person
It is important to put the offer in “black and white” to prevent any miscommunication caused by a verbal explanation of the offer – especially if the compensation structure includes a detailed bonus or commission structure.
By presenting the offer in person, you can review the offer with the applicant line by line and answer any questions that come up. It is important to make the candidate feel comfortable during the offer presentation. There is no harm in leaving the room to allow your candidate to digest the information, for example.
5. Sell Your Company and the Opportunity
Salary will always be an important consideration for candidates. Reduce the stress of negotiating the exact dollar amount by selling the value of your benefits package, profit sharing, bonuses or any other perks such as retirement or tuition reimbursement and any additional vacation allowances.
In addition to the non-financial benefits, be sure to discuss the candidate’s future opportunity for advancement. A top quality candidate may compare your offer to another but prefer your company because of the growth potential… or maybe it’s your company’s culture, product, or office location that will sell them. Share as much information as possible to “sell” your company and the opportunity.
6. Let Your Headhunter Do the “Heavy Lifting”
The first stage of salary negotiation begins with sourcing and interviewing. Be open and honest with your headhunter about your salary limit and what is possible with respect to non-financial perks.
A good headhunter will only present candidates that are attracted to your offering, saving you the time and headache of interviewing people you can’t afford. A good headhunter will also act as a neutral third party mediator to help bridge the gap during negotiation without erasing any goodwill you and your future employee built throughout the interview process.
Ask your headhunter to get the candidate’s verbal buy-in before presenting the written offer. Sometimes a candidate’s expectations are unreasonable or they will leverage another offer to try drive the salary up. Do not proceed to present a written offer if you don’t have the verbal buy-in.
As a headhunter, it’s part of my job to help hiring managers and candidates negotiate salary. Over the years I’ve seen all sorts of salary negotiations, some that have gone really well, and some that haven’t gone so well. What I’ve learned is if you want to land that A+ candidate, make sure to follow the 6 tips above to effectively negotiate salary with top talent.
IQ PARTNERS is a Recruitment Agency with offices in Toronto, Montreal, Vancouver, & Halifax. We help companies hire better, hire less & retain more. We have teams of specialist recruiters in Financial Services & Insurance, Marketing Communications & Media, Emerging Tech & Telecom, Consumer Goods & Retail, B2B & Industrial, Technology, Accounting & Finance, HR & Operations, Energy, Mining & Engineering, Life Sciences, and Construction, Property & Real Estate. IQ PARTNERS has its head office in Toronto and operates internationally via Aravati Global Search Network. Click here to view current job openings and to register with us.