Why is salary negotiation important?
Whether you want to attract talent or retain them, the level of salary will be important.
While there is a range of factors involved when choosing somewhere to work or apply for, the level of salary, for most employees, is number one. So, you need to ensure that your organisation offers a great salary that is fit for the role and within budget, which can be difficult to judge, especially during a salary negotiation. Getting the offer right can help to cultivate a feel-good factor within the workplace.
Understand your budget and range
Before going into salary negotiations, you need to understand and identify what is possible. This means knowing exactly what you have to play with financially, but it shouldn’t just be in relation to the employee you are discussing salary with.
It is also good to know where other employees stand salary-wise, and whether their range is within reason compared to what you may offer someone who has asked for a negotiation.
Make sure you don’t offer employees a broad range of salaries unless there is a justified cause or reason. So, bear this in mind, otherwise, you’ll have numerous employees asking for a salary negotiation, and you may not have the budget for that.
Salary negotiation tips for employers
How should you handle the negotiation though? Well, we have a few strategies for salary negotiations that look at the specifics of the offer, from both points of view.
Be prepared for a counter-offer from the employee you are discussing salary negotiations with. This isn’t a bad thing though, in fact, it’s a sign that they see their future with the company. Therefore, it’s good practice to ensure that you are prepared to move your initial goalposts to handle this offer and reach an amicable conclusion.
A signing-on bonus
If the salary negotiation is with a potential new employee, then why not entice them with a signing-on bonus? A bonus of 3 or even 4 figures would potentially help them to sign on the dotted line with instant gratification. In addition, a buddy programme to make them feel welcome could also help.
Time is important
It is important to understand that not everything has to be decided at the time of the meeting and that time can let things settle for a decision to be made. So, a great strategy after an initial or counter offer is to make sure a decision isn’t made there and then. It gives both sides a chance to weigh up their options and allows them to make sure they make the right decision.
Looking for the next step?
Are you looking to hire the best in class at a range that is suitable for you? Or are you looking for your next role at a salary level that suits your needs. Get in touch with us here at PE Global to find your next step.