You’ve found the perfect candidate to fill a key role; one that your hiring manager swears is vital to delivering on annual goals. There’s only one problem: the candidate is demanding more than your budget allows. What now? How do you craft a deal to not only land this superstar, but keep them for the long haul? Here are five necessities when negotiating:
Know the market
Negotiation involves give and take, so be sure to know your parameters going in. Before you dismiss the candidate’s request as “too high,” research industry competitors of similar size and location. In other words, understand your competitive environment.
You can count on your candidate being prepared. Online salary surveys and company review sites make comparing compensation among companies only a few clicks away. Your candidate is likely aware of their worth in the market place, but they may not be comparing apples to apples when it comes to organizations. So, be prepared to counter their demands with this type of information.
Payscale’s Compensation Best Practices Report shows that medium- to large-sized companies are more likely to pay higher for competitive positions that impact the organization the most. If you are in one of those categories, realistically you may have to stretch to get the ideal candidate.
Move away from even numbers
Inc. Magazine suggests getting off even numbers when negotiating salary. Most people tend to counter offers in round numbers, usually $5,000 increments. If your candidate is asking for $70,000, consider countering with $64,000 or $66,000 rather than $65,000. It shows you’re thinking about the offer rather than just reacting with a $5,000 number.
They also suggest not making an offer too close to the next $10,000 level. Raising a $68,000 offer to $71,000 may head off the candidate’s counter of $75,000.
It’s more than just salary
Discuss total compensation, not just salary. Although salary may be the initial focus, research shows choosing a job is not always about the money. The AFLAC Workforce Report reveals that 60 percent of employees are likely to take a job with lower pay but better benefits. Also, not surprisingly, they found employees who are satisfied with their benefits are much more likely to be satisfied with their jobs AND less likely to look for a job in the next 12 months.
For instance, healthcare is a main concern for employees, including increasing out-of-pocket medical expenses, the rising cost of health insurance, and the possibility of losing certain health benefits such as spouse coverage. Total rewards planning can include reliable health insurance, stock options, bonuses, gym memberships and wellness credits, which all serve to beef up your total compensation package.
Careercast identifies the top five benefits a job seeker should look for as health insurance or defined contribution health plan, dental and vision insurance, wellness programs, and time off. Use these to counter a high salary demand.
Pay for performance
In many companies, the base salary may be just the starting point. If you have an incentive plan in place, show your candidate he/she can make even more than the original asking price if they meet certain defined goals. Most strong candidates believe in their own ability to perform and are willing to “bet” on themselves.
Your pay for performance plan should be tied to your organization’s strategy and goals so that if your candidate receives the incentive, both the candidate and the company benefit.
Be Honest and Transparent
How you handle yourself in the negotiation will make an important impression on your candidate. If they think you’re not being honest and open, you can lose them regardless of the compensation you offer.
Start by making sure your offer is competitive. Lowballing with the intent of raising the bar later can be off-putting to today’s candidates, and can sour the negotiation right from the start. If you feel the compensation request is unreasonable, explain why using facts and figures versus emotion.
Don’t make vague promises that the organization may not be able to keep. That may get a candidate in the door, but won’t do much for long-term retention.
Making your organization a place where candidates want to be gives you a significant advantage when negotiating a compensation package. To find out what candidates find attractive and to improve your appeal to job seekers, download our free guide, The PeopleFluent Guide to Being a Candidate’s First Choice.