Negotiating salaries is an integral part of the onboarding process. If done correctly, everyone should feel satisfied with the outcome. You can feel good about staying within your budget constraints knowing your employee is satisfied with their pay and benefits.Here are some tips on how to negotiate salaries effectively with your employees.
Do your research
When it comes to salary negotiations, it is important to do your research. Having a clear understanding of industry standards will make it easier for you to remain within your budget while still making a competitive offer.
You should research what the average salary range is for employees at different skill levels. Consider crowdsourced market data to find out what similar companies in your area can offer their employees.
Know the laws in your state
In a salary negotiation, it helps to know what the other party makes at their current job. Nonetheless, you should be cautious before asking that question.
In many states, employers are prohibited from asking about salary history. There are currently 21 state and local bans in places such as California, Colorado, and Missouri.
However, the laws do vary from state to state – for example, California enacted a statewide ban that applies to all employers. Missouri’s ban, on the other hand, only covers employers who work for the city and Kansas City.
Know what job candidates expect
During your initial discussions with potential candidates, it would be a good idea to ask them about their salary expectations. If you wait until the offer stage to discuss salary, you may find that their expectations are too far off from what the company can pay.Although the candidate’s initial asking price may be higher than you’re willing to pay, it’s not a deal-breaker. It is common for people to start high, knowing that they will need to negotiate the price down later.
Publish a salary range
You might find it helpful to include salary ranges in job postings for certain positions. If you do this, you’ll save a lot of time since applicants who find the salary range unattractive won’t apply.
But you should also know what factors will place an employee in the higher or lower ranges, and you should be prepared to explain your reasoning throughout the negotiation process.
Make your initial offer
To start payroll negotiations, first, provide the applicant with a specific number. You should expect that person to come back to you with the opposite offer.
Negotiate salaries, when possible, but remain transparent once the salary limit is reached. From there, you can give the person time to review your offer and weigh the pros and cons of the job.
Don’t forget about benefits
If you can’t afford to pay that much for this position, you can add additional benefits to make it even more attractive. According to a SHRM survey, 60% of employees agree that social benefits make a significant contribution to general work satisfaction.
And there is no limit to the types of benefits that can be offered to new employees. The benefits of additional paid leave, remote work opportunities, and training are attractive benefits for potential employees.
You can also consider offering a one-time cash contract to new employees. This is a great way to motivate applicants standing on the fence about it.
Find out why job candidates say no
Hopefully your payroll negotiations will be successful, and you will find a compromise that you and your new hires are happy with. However, the applicant may decline your offer. When that happens, you must follow up with the person and find out why they said no. You may not be able to negotiate well with this person but understanding that they did not like your offer will help in future salary negotiations.
Clearly, negotiating salary can be a very tasking process. But it can deliver significant benefits for your organization.