When it’s time to sit down at the negotiating table with the best candidate in your applicant pool, you’ll have one goal in mind: Obtain the highest quality labor for the lowest possible cost. No goal could be simpler, and no process could be more straightforward…right?
No quite. As an employer in the current marketplace, you may feel that you hold an advantage when it comes to salary offers, and this feeling may be validated by the long line of candidates for this position who submitted resumes and attended interviews with varying levels of desperation. But if your excellent candidate comes on board and leaves within a year, the company will suffer in the long run. So it’s wise to recognize the perils of an offer that’s too low, not just one that’s too high. Here are a few tips to keep in mind.
Start with research.
Review the standard market rate for this type of work. Then unpack the data you find and determine the average rates for employees at this level, and for similar types of work—at this level—in other industries. Factor in the geographic area and cost of living. And factor in the salaries your closest competitors are offering for similar roles. Come to the meeting armed with these numbers after checking and double checking them using multiple sources.
Start low, but not too low.
Expect the candidate to respond to a low offer with a counter offer. But if your offer is too low, expect her to disappear and accept a position elsewhere. The more research you conduct, the more you can tighten the range around a target number.
Show caution when asking for a salary history.
Of course it’s acceptable to ask the candidate to present a number (or range) first. But think twice before you expect a candidate to produce a documented salary history. Her offer should– and usually will—be based on what she’d like to make and what she believes her work is worth, NOT on what she’s been paid in the past. Besides, this is very personal information that she’s wise to withhold.
Consider the intangibles.
The candidate’s commute and the stresses of the job may not matter much to you. After all, you’re paying for the work she completes, not the sacrifices she makes to complete it. But these things matter to her, and you’re about to embark on a human relationship in which both parties must be happy for either one to profit. So consider these intangibles, and if you can’t afford to raise your offer, highlight the perks of your workplace during the negotiations (for example, free parking, flexible hours, access downtown attractions, the company gym, etc). Of course, you’ll also need to highlight the insurance benefits and bonus opportunities you provide.
For more considerations and tips regarding the salary negotiation process, contact the NC staffing experts at PSU.