#006 The 4 Action Strategies to Negotiate Salary

Negotiating salary or total compensation with some candidates can be tricky. Candidates are negotiating their salary more than ever before, which is okay, but it should not result in a deal breaker. So, handling such sensitive conversations tactfully is the key.

With that in mind, I thought of sharing a few practical tips to make salary negotiation with your high-potential candidates as smooth as possible.

Let me tell you, there is no one-size-fits-all strategy when it comes to salary negotiation. I am going to walk you through a couple of ways that work for me, and I hope the same for you.

The first and the foremost strategy that goes into salary negotiation is to:

Strategy #1: Build rapport and trust with your potential candidates to gain their confidence: In today’s digital era, candidates have easy access to salary data. They conduct due diligence when it comes to checking what other companies are paying for a similar role. They reach out to various sites that provide salary insights such as Glassdoor or LinkedIn Salary Insights to seek info on how much a similar role is worth on the job market.

Speaking of that, let your candidate know well in advance that an offered salary hinges on multiple factors, such as —

On a candidate’s front, it depends on how well a candidate does in an interview and their level of expertise.

On a company’s front, it rests on internal equity which means what existing employees are making in a company, how niche the skill is, the level of the position, work location, and how badly a company needs to fill this role due to revenue loss.

And finally, on the industry side, it is determined by the availability of talents related to specific skill and the market pay-range or cost of labor.

Having said that, dig deeper with your candidate during an initial conversation by asking why do they want to make a change? Or in other words, what does a candidate aspire for in a new job?

Most of the time, you hear candidates giving a generic response— “better opportunity.” Ask them to be as specific as possible so you can help them get what they really want in the next job. Seek if it is money, toxic environment, remote work, benefits, growth progression, or anything else, that’s forcing them to make a move. It could also be a combination of several such things.

Knowing the exact reason for a job change, let your candidate know that you have their best interest in mind, and you will try your 100 percent to match their expectation. Let them know why it is important to you. Tell them frankly, if they don’t get materialized, then it doubles the work for you.

Alright!

Strategy # 2: Get your candidate’s salary expectation: Ask early on, what is the number that they are looking at?

I have come across many candidates who do not reveal their numbers until you share a position’s budget with them. Some of them say it’s too early to talk about salary.

They wanted to know more about the position, scope of the work, growth within a team, people who they would be working with, company culture, benefits and so forth.

And that’s the reason, I would say be honest and transparent to address such expected questions early on in the process. If there is something you don’t have an answer to, let them know that you don’t have the info handy, and you would get back to them by a certain date. Be specific. Give them a sense that you really care about them. You understand that it's a big move to make, and you love to answer all their queries and concerns before they make their educated decision.

Now, it’s a candidate’s turn to let you know the bare minimum number below which they wouldn’t think of making a move. Or to be more precise, ask them what they believe is a deal breaker.

It’s really important to get their salary exception early on to sense if they fit the bill. Be assertive and tell them respectfully that you don’t want to waste anyone’s time and effort just to know at the end that it’s going nowhere.

Either a candidate will share their minimum expected salary, or they will persist you to share a pay range with them.

If you ask me, I’m not a great fan of sharing a pay range with a candidate. And here is why. I have experienced this many times, when I go ahead and tell them a salary range, they always hear the top of the range. And most of the time, companies settle somewhere at the midpoint. This makes candidates unhappy —- they feel as if they are being underpaid —- That’s where they start renegotiating the offer.

Just to avoid all this mess, I always prefer to share the minimum range and make them sure that this is something I can offer at this point, but as we move along the process, if anything changes such as if they really perform well during the technical interviews, I can try my 100 percent to get them a better offer. So, when we offer candidates say 5 to 15% more than what we discussed initially, it will make them happy.

There could also be a situation when a candidate says straightaway “no” to your minimum range. In that case, I would recommend telling them the upper range provided you tell them that an offered salary will be based on multiple factors as I explained in strategy #1. If they are not okay with the upper range too, then educate them that there are other components too that make the total comp. package.

And this leads me to explaining different parts of total comp in Strategy #3.

Strategy #3: Elaborate different components of a total compensation to a selected candidate before extending a written offer:

Educate candidates that every company is different, so is compensation structure and flexibility around different pay components.

Never rush to extend a written offer without explaining it verbally. This way, you clarify many doubts in the moment and gauge their interest level too.

For instance, if you are paying a little less than the market rate, try to make up salary shortfalls with one of the following options, such as, signing or joining bonus, remote or hybrid work, more vacation days/PTO (paid time off) , relocation expenses, annual bonus, reimbursement on completing certifications and so forth. It totally depends on what your company is most flexible with.

Strategy #4: Rebuttal more salary expectation, competing or counteroffer: If a candidate demands more salary, ask candidates what made them come up with that high number. Ask them to justify why they are worth more than what they have been offered so that you can prepare a business case and present in front of your leadership or comp team for a better package.

Also, if they are holding another offer, ask them to produce one so you have some base to review their case for offer revision, only if that’s a possibility.

With that, now you have four concrete action strategies to have that smooth salary discussion with your candidates over the entire hiring process and hopefully turn your offered candidate into a successful hire.