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Eliminate guesswork from salary negotiations

By Jennifer Sharpe

The ultimate goal for salary negotiation during the hiring process is to create a win-win situation for both the employer and the new hire, where both sides feel they have reached a positive outcome.

To achieve this, employers need to do their research. Just as a prospective employee researches salary ranges for open positions, an employer needs to know what those ranges are as well. Websites such as glassdoor.com and salary.com help shed light on acceptable salary ranges for comparable jobs. If both parties come in to negotiations with the same understanding of what the market is offering in terms of compensation, it will be easier to find common ground.

“As an employer, asking an employee for their range is a good place to start at,” said Andrew Challenger, vice president at Challenger, Gray & Christmas Inc., a Chicago-based global outplacement and career transitioning firm.

“Some employers do not publish a salary range in the job posting, but I see it differently,” said Anna Jacks, president-elect for the Oklahoma City Human Resources Society. ”I prefer to publish the range and ask candidates when they interview what their requirements are. I advise that this helps the business make a fair offer should we make one. If candidates are unwilling to state a figure, I can ask them if they are good with a figure within the posted range. I also think it further determines the candidates who do decide to apply. They will know up front what we are willing to pay.”

Eliminating the guesswork from the start helps promote a sense of comfort throughout the process.

When trying to determine what amount to offer, consider all variables. How long has the position been open? Do you have strong backup candidates? Also, market variables are another factor to consider.

Challenger said the present labor market is tight because unemployment is low. There is not a large pool of available candidates in urgent need of a job.

“It is important to know coming into a situation whether your candidate will be getting multiple offers,” Challenger said.

A limited applicant pool in a tight market might command an offer that is higher than what would be appropriate when a lot of talent is available to choose from.

Even though a salary range should have already been discussed upfront, Challenger said, “Don’t throw any numbers out until you make a firm offer, and make it a strong offer.”

A strong initial offer gives the employee a sense of value, and creates trust and respect. Most people are uncomfortable with the negotiation process, so many candidates, if the offer is attractive enough, will take it without making a counteroffer.

“Sometimes, with the right initial offer, you can avoid the negotiation process altogether,” Challenger said.

Flexibility and creativity when it comes to benefits can make a difference.

“Be willing to consider requests for perks other than salary such as extra vacation and PTO (paid time off),” Jacks said. “We get a variety of requests such as for a company car, relocation and more.”

These other benefits can help fill any gaps between the salary the company can offer and the overall compensation package the employee desires.

“Consider benefits beyond salary, such as stock options, health care, and flexibility, like the ability to work from home,” Challenger said. “You always want an employee to feel like they are winning in the salary negotiation process.”

Despite best efforts and intentions on both sides, the negotiation process can be stressful.

“Sometimes there are still misunderstandings,” Jacks said.

Lori Anderson-Snyder, associate psychology professor and distinguished faculty fellow for the Office of the Vice President for Research at the University of Oklahoma, said, “Reactions to a negotiation situation are based on several aspects of the experience: the outcome of the negotiation (satisfaction, benefit/loss), feelings about how the individual (self) behaved in the negotiation (my behavior matched my values, I maintained pride), feelings about the process (the negotiation counterpart listened, the process was fair), and feelings about the relationship with the counterpart (I trust the counterpart, there is potential for future relationship with counterpart).”

Coming out of the negotiation process, the ideal for both employee and employer is for both to have a sense of satisfaction, where both parties acted professionally throughout the process, which then translates to the formation of a trust relationship that will carry over into working on the job together.

“Feelings and emotions around a job offer matter,” said Challenger. “The hiring process is time-intensive and costly, in terms of both time and resources. If you bring someone in on the wrong foot, and lose them in three months, it is a huge cost to the company to start the hiring process all over again.”

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