How to Navigate the Delicate Art of Salary Negotiations

20 of September, 2023

You know the drill. An employee comes knocking at your door wanting to talk about their salary. As an HR manager, this scenario can make you cringe. Salary negotiations are never easy, but they are a necessary evil.

The good news is, with some preparation and confidence, you can handle these conversations smoothly even if this subject were brought up in the recruitment phase. Follow this guide to salary negotiation and you’ll be negotiating like a pro in no time.

Do Your Research on Competitive Salaries

If you want to get the salary you deserve, you need to go in armed with the facts. As an HR manager, do your homework on typical compensation for that role. Check sites like Glassdoor, PayScale, and Salary.com to see the range of salaries for that position in your area.

See what other local companies are paying employees with that job title and level of experience. You’ll want to aim for the higher end of that range, so look at salaries of candidates with similar skills, education, and a proven track record of success.

Once you have a target number in mind, determine how much flexibility you have in your budget. As a hiring manager, think about how critical this role is and how much value they will add. Consider providing a range that starts at your ideal figure. That way you have some wiggle room in the negotiation.

Be Ready For Early Negotiations

When it’s time to make an offer, be upfront that the salary is negotiable within a reasonable range. Explain your research process and share the salary range you have in mind based on their experience and skills. Be open to hearing a counteroffer, as top candidates will likely have done their own research.

A fair negotiation is a two-way discussion. Compromise when you can, as keeping a desirable employee happy will be well worth it in the long run. If you reach an impasse, you may need to reevaluate the role and responsibilities to determine if additional budget is justified.

With the right preparation and mindset, you can have a constructive conversation about salary that leaves you both feeling good about the outcome. And that’s the first step to a great working relationship.

Know Your Worth and Set Your Salary Range

As an HR manager, determining a new hire’s salary range is one of the most important parts of the negotiation process. Do your research to find the typical compensation for that role so you can make a fair offer.

Know the Market Rate

Check sites like Glassdoor, PayScale, and Salary.com to see the median pay for that position in your city or industry. Look at the salary range, not just the median, to determine the minimum and maximum you’re willing to offer based on the candidate’s experience.

Consider the Candidate’s Experience

An entry-level employee fresh out of school won’t command the same salary as someone with 10+ years of experience. Gage where the candidate falls on the pay scale based on their skills and work history. You may need to adjust up or down from the median rate.

Leave Room for Negotiation

It’s expected that most candidates will want to negotiate their offer, so don’t start with your best and final offer right away. Leave a buffer of about 10-15% below your maximum so you have room to increase the offer if needed. That way the candidate feels like they won by getting a higher salary, and you still stayed within your budget.

Be Transparent About Benefits

Explain details about insurance premiums, retirement contributions, bonuses, and other benefits. This helps demonstrate the overall compensation and value of the role. Candidates who better understand their total rewards package may be more flexible on base pay.

With the right preparation, you can make a fair offer, have a productive discussion about salary and benefits, and set the stage for a long and mutually rewarding employment relationship. Following these best practices will help ensure you find the best talent at a price that works for both parties.

Timing Is Everything: When to Bring Up Salary

The timing of when you bring up salary in the negotiation process is key. If you mention it too early, you risk appearing greedy or uninterested in the work itself. Wait too long, and you lose leverage as they’ve likely already budgeted for the role and made an offer.

After the Initial Interview

Once you’ve had an initial interview and expressed interest in the role, it’s appropriate to have a broad discussion about salary expectations. Say something like “Based on our conversation so far, I’m very enthusiastic about this opportunity. I was hoping we could explore the salary range and compensation package for this position so I can determine if it aligns with my requirements.” Get an idea of their range so you can evaluate if it’s in the ballpark of what you’re looking for before investing more time.

Before the Offer

As the interview process progresses and they become more interested in you as a candidate, politely but confidently ask about their timeline for making an offer. Once you have a sense of when an offer may come, revisit the salary discussion.

You might say “I’m very hopeful we’ll get to the offer stage soon. Before we get to that point, I wanted to revisit the salary range for this role to make sure we’re aligned in our expectations.” Provide a reasonable salary range that you would be happy to accept.

With the Offer

When they make an official offer, evaluate it carefully. If it’s within the range you discussed and you’re satisfied with the overall compensation, you’re in a good position to accept. However, if it’s lower than expected, be prepared to negotiate.

Explain how you would be an asset in the role and reiterate your previously stated salary requirements. Provide evidence to support your desired pay level. You have the most leverage at this stage, so stand firm in what you’re asking for.

The key is balancing showing enthusiasm for the work with advocating for fair pay. Discuss salary expectations early, revisit the topic to reaffirm as needed, and negotiate an offer if required. With the right timing and approach, you’ll reach an agreement that satisfies both you and your new employer.

Negotiation Strategies: Tips for a Successful Discussion

As an HR manager, guiding an employee through a salary negotiation requires finesse and strategy. Here are some tips to help you have a successful discussion:

Come prepared

Do your research ahead of time. Review the employee’s responsibilities and contributions, as well as the salary range for that position. You’ll want concrete examples and data to support your offers.

Focus on the job, not the person

Frame the discussion around the value of the role to the company, not what the employee needs or deserves. Explain how you determined the salary range. This helps demonstrate that the offer is fair and equitable.

Discuss compensation beyond just salary

Consider other options like extra vacation days, flexible work schedules, retirement plans, or performance bonuses. Some employees may value these types of benefits more than a higher base pay.

Be willing to negotiate

Expect the employee to counter your initial offer, and go in with a range rather than a fixed number. You can then make incremental increases within that range. Ask the employee to provide reasonable data to support their request.

Explain future opportunities

If possible, discuss the potential for salary increases in the future based on performance and experience. This can reassure the employee that there are opportunities for advancement.

Focus on interests, not positions

Try to understand the underlying interests and priorities motivating the employee. This can help you find alternative ways to meet their needs that also work for your organization. Taking a collaborative approach will lead to the best outcome.

Be transparent

Explain any rules or policies around compensation at your company to avoid confusion and frustration. The employee will appreciate your honesty and willingness to have an open discussion.

With the right mindset and preparation, you can have a successful salary negotiation with your employee. Approach the conversation with a spirit of openness, fairness and cooperation. Both parties can come away feeling heard, valued and satisfied.

After the Negotiation: Follow Up and Evaluate the Offer

Once you’ve finished negotiating the offer with your candidate, your work isn’t done. Follow up and evaluate how it went to improve for next time.

Send a formal offer letter

Put the details of the negotiated offer in writing. This protects you and the candidate by clearly outlining salary, benefits, start date, job title, and any other key points you agreed on. Have the candidate sign and return the letter.

Stay in touch

Continue communicating with your new hire leading up to their start date. Send updates on onboarding tasks and paperwork. Answer any questions they have. This helps them feel engaged and excited to begin working for your company.

Review and evaluate

After the negotiation, analyze how it went. What worked well? What could you improve? Talk to others involved in the hiring process to get their feedback too. Look for ways to strengthen your skills in explaining the company’s position, addressing objections, and coming to mutually agreeable solutions. The more you negotiate, the better you’ll get.

Track your metrics

Use a tool like Sesame HR to record details of the negotiation. Log the candidate’s desired salary, your initial offer, the final agreed number, the value of additional benefits, etc. Over time, this data can reveal trends in your industry and location that help you make stronger first offers and have more productive negotiations.

With the negotiation complete and your new hire onboard, you can consider this a job well done. By following up thoroughly, evaluating your performance, and tracking key metrics, you’ll continue to improve your ability to hire the best talent at a salary that works for both parties. Keep up the good work!

Conclusion

So there you have it, a complete guide to handling salary negotiations like a pro. Remember, go in prepared. Do your research, know the role and responsibilities, and determine an appropriate range. Have confidence in yourself and what you’re offering as an employer.

Be transparent about the budget upfront but don’t make the first offer. Ask open-ended questions to get candidates talking about their expectations and needs.

Look for win-win solutions and options that work for both parties. And if things start to break down, stay professional—you never know if you’ll be negotiating with this candidate again in the future.

Follow these tips and you’ll be negotiating salaries like a seasoned HR manager in no time. Best of luck!