How to negotiate salary as an employer

Four business people in an office, negotiating a deal.

Follow these tips when you negotiate salary to impress your candidates

Salary negotiations can be a stressful time for both parties. The last thing you want to do is offend or even lose your top candidate, so it’s important to come to the negotiation prepared.

As a small business owner or new hiring manager, it’s best to prepare for the possibility of negotiating salary from your very first hire. 

Your average employer will expect to negotiate salary and benefits when they make a job offer, and a significant amount of candidates do too. But more men than women take the risk: 46% of men negotiate offers but only 34% of women do the same.

So when such a significant proportion of job hunters risk negotiation, you can’t risk being unprepared.

Things to consider:

  • The seniority of the role and whether they will be managing any other employees
  • The value your new hire will bring to your company
  • How in-demand the skills are in the job market
  • The industry standard pay for this role type and seniority
  • Your organisation’s standard pay
  • The maximum salary that you can afford for the next 12 months
  • Your benefits, training and development packages including possible promotions

The most important thing to remember is that every candidate will be different. Some may expect a salary that’s double your budget and be quite aggressive with their negotiation tactics. However when it comes to juniors you can expect a more careful approach.

Be sure to make it clear that you’re excited to work with your candidate and come to a mutually beneficial agreement. It’s easy for candidates to feel like they’re on the opposing side of the employer when they negotiate salary, but that’s not the case. You both want to reach an agreement that makes you happy and in most cases, a little transparency can help.

So if you can only offer a fraction of your candidate’s desired salary before your funding comes through in a few months, try to communicate this. If you haven’t had the time to create a great benefits package but you’re eager to create one with the help of your team, communicate this too. And if you’re open to flexibility, remote working or trying new trendy working styles, this can be extremely attractive to candidates.

When will I negotiate salary?

Salary negotiations tend to happen after you make a formal written job offer. Although salary expectations can be brought up in interviews, it’s more standard to begin negotiations right before you issue a contract.

An employer and happy candidate in business attire negotiating salary.

Five salary negotiation tips for employers

1 – Start strong

Advertising your role with a salary band will help you in negotiations. It will guide candidates with their demands too – unless you end up hiring someone far more senior than the job description calls for, your candidates will know your limits and manage their salary expectations.

Most candidates won’t ask for a salary that’s higher than the one you advertised. And if they do, you can refer back to it to reinforce your decisions.

2 – Make it public

A controversial tip is to add the word ‘negotiable’ to your salary band. We’ve already mentioned that 13% fewer women negotiate their salaries than men. Men are offered higher salaries than women 60% of the time, so when men then go on to negotiate an even higher salary, the pay gap widens much more.

By adding ‘negotiable’ to your job description, you make negotiating normal and expected. Hopefully this will make more women come forward to negotiate with you. 

Even if that prospect doesn’t excite you, the opportunity to lessen the gender pay gap in your organisation should.

3 – Benefits can be negotiable too

Salary and benefits negotiations don’t have to centre around money.

Whether you’re not open to salary negotiations or have a strict budget for the year, many candidates will be open to negotiating their benefits instead.

They might ask for an increased training budget, weekly lunches, more paid time off, a smartphone or commission on any sales they make. Perhaps you could offer a flexible working package, early finishes on Fridays or the option to regularly work from home too.

4 – It’s about compromise

Neither party should feel like they won in a salary negotiation.

You should hopefully come to a mutually beneficial agreement that makes both parties happy, but it’s important to stick to your limits. After a gruelling hiring process, it’s easy to feel a little desperate to impress your candidate and keep them sweet. 

However, desperation can lead to some disastrous decisions.

So set some hard limits before you enter the negotiation and be prepared to manage expectations.

5 – Talk about the future

One of the best ways to get a candidate excited about a role and ready to achieve great things is to talk about the future.

Perhaps you can offer great development opportunities or a great yearly raise – either way, get specific with the promotions and salary your hire could achieve years down the line.

For example, mention:

  • Previous candidates in this role have gone on to become Business Development Managers, earning £85,000+ within 18 months at the company.
  • After one year in the role expect a raise of £3,000 to reflect your growing contribution to the company.

You can include this in your job description but it’s important to mention it throughout the process too.

If you need any additional help making both candidate and employer happy when you next negotiate salary, our expert recruitment team can help. Reach out to us on 020 3951 8891.

About post author

Hi, I'm Daisy. I'm using my passion for writing to work with DigitalGrads on their content and social media campaigns.
Posted in Hiring Graduates