Finally, the interviews have ended and you’re making an offer to a candidate.
Then the candidate pushes back, negotiating salary, perks, or some other aspect of the position. How you respond is critically important—not only to the candidate experience, but also to your employer brand.
Negotiating during the hiring process isn’t unusual. Here’s how to reduce tension during the negotiating process and land the candidate.
Provide Information At The Start
In the spirit of full transparency and pay equity, listing the salary range in the posting is becoming a best practice. As an added benefit, it sets the stage for salary discussion at the start of the interview process, which makes the offer process smoother.
Additionally, some states are starting to make listing salary ranges mandatory, such as New York’s pay transparency laws that take effect in September 2023. Even without these laws, many employers are choosing to be more transparent about pay practices. According to a survey conducted by the Society for Human Resource Management (SHRM), 73% of U.S. workers are more likely to trust organizations that provide pay ranges and are less interested in applying to jobs that don’t list pay ranges.
Although many candidates will negotiate salary, it’s import for organizations to have a budget for a position and be honest about communicating that salary or range. Deliberately lowballing an initial listed range or offer has several drawbacks:
- It will eliminate potentially strong candidates who choose not to apply because the listed salary is too low.
- It signals that the organization prioritizes negotiating over recruiting the best possible candidate.
- It damages the organization’s credibility.
Lowballing a particular candidate/offer can make a candidate feel as if you don’t value their skillset and could be a red flag.
Organizations should have a logical compensation strategy in place, based on prevailing wages in the industry, the organization’s needs and budget, equity with what other employees are earning, and each employee’s or candidate’s experience and skillsets.
When a candidate attempts to negotiate a job offer, employers have three options:
- Counteroffer. “We can’t give you that, but we can do this.”
- Agree to it.
- Stand firm in your offer.
Depending upon how desirable the candidate is, employers should determine what’s really important to the candidate and what factors besides salary can sweeten the offer. Maybe the candidate would value non-salary perks, such as the ability to work remotely on some days, a more flexible schedule, or additional paid time off. Maybe the initial offer was below industry averages for the position, and the organization needs to increase its budget. Many employers can negotiate the following:
- Start date
- Travel benefits (keeping frequent flier miles and rewards points)
- Signing bonus (contingent on staying employed for a certain period)
- Commuting allowance, which can go a long way
- Commission percentage increase
- Tuition reimbursement
It’s also important to know when to walk away. If a candidate seems evasive, difficult to reach, or generally not engaged, move on. Those are warning signs that, if hired, the individual will keep looking until he or she find something that pays more.
On the flip side, if an organization has put a promising candidate through a couple of rounds of interviews but is reluctant to extend an offer, the candidate may wind up elsewhere. There are many cases where a suitable applicant was “put on hold” while the organization kept searching “in case we find someone better,” and then lost the candidate to another organization.
Above all, no matter what happens, don’t get irritated. Negotiating is part of the process and shouldn’t be taken personally.
Keep in mind that a positive work environment—culture, development opportunities, opportunities for advancement—can be more compelling than pay. That’s what people are often looking for. Building and maintaining that type of environment can go a long way towards attracting and retaining valuable employees.
What Recruiters Need To Know
Both in-house and outside recruiters also should work to understand a candidate’s salary expectations, which is easier if the candidate knows and agrees to the salary range.
If the candidate expects a salary well above that range, a good recruiter should find out why. Does the job description sound more technical or higher level than the actual position? Is market rate for that position well above the organization’s stated range? Is the candidate overqualified?
If a candidate is looking for a salary considerably above the upper range but says they’ll consider something lower, that’s a potential red flag. If the person doesn’t have a job, he or she may be willing to take any position and continue interviewing.
Sometimes, though, there are creative workarounds. In one instance, a candidate really wanted a career change and wanted to work for a nonprofit but had salary requirements well beyond what the organization could pay. In this case, the candidate really believed in the organization’s mission and was happy to accept a lower-level position for less money. That isn’t common, but recruiters should explore these types of tradeoffs with strong candidates if possible.
The Lindenberger Group can help organizations design and manage a compensation strategy that benefits both the organization and its employees, and use that strategy as the foundation of an efficient, successful recruiting campaign. For more information or to discuss your HR needs, please contact us at 609-730-1049 or send us an email.