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Tips on Negotiating Salaries with New Employees

Fri, Aug 24, 2018


While it’s pretty well known that many (if not most) new employees will try to negotiate their salary once they’ve been provided with an offer, hiring managers still find themselves blindsided by the prospect of actually negotiating. Do you always need to meet them in the middle? Should you ever decline to negotiate? What do you do when there’s really no wiggle room in the budget at all?

Here are some tips for dealing with the finer points of salary negotiations.

Know in advance what your range really is.

If you’re a manager in a larger business, your ability to negotiate often relies on someone else’s authorization. Find out how high you can reasonably go with this employee. If you’re the boss (or at least boss enough to be making these kinds of calls independently), then give yourself some time for reflection before making an offer.

Setting the Perfect Salary - free PDF download

Consider making your initial offer slightly lower than what you expect to settle for in the end. If the employee turns out to make a convincing case for why they’re worth more to your business (either by saving you money or bringing more in), you may want to turn around and go to bat for them with your higher ups. But make sure you base this on a solid track record, not just empty arguments.

Keep in mind the entire package.

Compensation isn’t just about salary. If you truly can’t raise that part of the package, consider other concessions in response to your potential employee’s negotiation.

  • Additional vacation time
  • Relocation or hiring bonus
  • Flex time
  • Remote work opportunities
  • Paid training or tuition assistance
  • Stock options
  • Seniority
  • Quicker vesting of 401k matching
  • Bump in title

Some of these cost you little to nothing, while others have significant costs that are probably still less expensive than a higher salary.

When a negotiation seems totally out of touch with reality.

Sometimes, you’ll make an offer and then get a response back that is so far beyond what’s reasonable for the role, you’ll wonder whether you’re living in the same universe. There are a few different reasons this can happen.

  • The candidate is unaware of norms in your field or geographic area and genuinely feels that you’ve lowballed them.
  • The candidate has received bad advice about how to negotiate appropriately and wants to be seen as someone who takes charge of the process and demands what they want.
  • The candidate has poor judgment.

The only way to find out which of these are in play is to ask them. “That’s a pretty big difference from our offer. Can you tell me more about how you got those numbers?” Then you’ll realize whether they’re still thinking like a New Yorker when you’re in Cincinnati or whether they’re an egomaniac who truly believes having them as your customer support specialist is going to be the best thing that ever happened to your company.

When a negotiating candidate says they’re willing to walk away if you don’t offer them what they want.

Take them at their word. How do you feel about your backup candidates? If they seem relatively strong, it might be worthwhile to let this one go. Why?

  • If your highest number is their lowest, will you still be able to afford them in a year or two?
  • Will they be equally ready to walk away when negotiating their next raise or asking for a promotion?

Sometimes there’s simply not a good fit between a given employer and employee. It’s sad when the factor that breaks the potential relationship is salary, but it’s just one of many factors that can lead either of you to decide to go in a different direction.

Not even sure of where to start in a salary negotiation?

As an employer, it’s your responsibility to make the first offer. If you haven’t hired people for this role before, it can feel like a huge burden. For guidance on this process, download How to Set the Perfect Salary for free, and you’ll be ready to take that step with confidence and ease.

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