Why do people negotiate salaries?
If candidates are clear about their excellence and why they deserve higher salaries than what is being offered, they will not just quietly accept any amount put on the table. They tend to not be the most agreeable in the context of money, but then candidates who are agreeable often earn lower salaries over their career. Also, bonuses and raises are calculated as a percentage of base salaries; hence, negotiating the salary is important from the long-term career perspective, too.
For an HR employee, the negotiation is part of the process of matching the budget available for a candidate with the price the candidate is looking for. The expenses must stay within the budget and the approval of supervisors must be obtained. The process is stressful, but once it is concluded, there is the satisfaction of welcoming the right candidate to the company.
For these reasons, a successful salary negotiation process is of the essence, and certain careful steps and best practices will help.
Gather enough data and the right data
There are broadly three sets of data that the HR employee must gather:
- Market data: It is important to research the market and the general economic climate. Good pointers will be similar companies with similar team sizes. It is important to get the right data for each open position, and this can be obtained through HR surveys as well as contacts built by networking with other HR employees.
- Company data: The HR employee needs to be aware of where the company is headed, its budgets, and other decisions regarding salaries and raises. These are helpful in understanding the business priorities and the parameters to use to determine salaries.
- Team data: Salaries to be offered are constrained by budgets, so there must be strong reasoning behind the need to offer higher than what was planned. Offering a higher salary to one candidate could mean another candidate will get a lower offer than planned.
Speak to the candidate
Once the offer amount has been determined, it is important to listen to what the candidate wants and is looking for. The recently-drawn salary and benefits are a good starting point, and it is advisable to ask about the expected salary during the application process. Ask relevant questions of the candidate, and listen carefully so that you can judge how much room there is for negotiation.
Communicate properly and effectively
Present a clear, rational, and properly-communicated offer. There is a budget that the offer must be within, and additional points that can be presented to the candidate include sick leave, signing bonus, paid vacation, tuition assistance, and severance. Benefits, in fact, can be a significant part of the offer and often sway candidates in favor of the company. It is best to be upfront and frank about the reasons for not offering certain benefits and other terms and conditions, as the process is long and it is best to conclude it quickly and productively. An often-overlooked part is the job description, so do ensure it well-drafted and error-free.
Negotiate the price
Be prepared with some numbers and data: the maximum salary you can offer, the available benefits, and your price ceiling. It is advisable to not start with a very low offer, as the candidate is not likely to or might hesitate to counter when the difference is too vast, and the candidate might just turn down the offer. It is best to make an offer a little short of your ceiling so that there is room to negotiate.
A great way to build up your negotiation skills with candidates, as well as the other required competencies for an HR role, is to get an HR certification. This is proof of possessing skills in different aspects of HR, including soft skills like negotiation and communication as well as knowhow of HR software and others. A certified HR professional is an essential asset to a company in its search for the best candidates.
The negotiation process is a key step in attracting the best talent, so use the above suggestions when you next look for a candidate!
