Negotiating pay with candidates can be a pain. Frequently, candidate expectations differ from what employers are offering, and any discrepancy can cause negotiations to fall through. Here are a few tips for discussing compensation with candidates… and for maintaining the upper hand in those discussions.
Know the Market Price for a Candidate
Remember that most job seekers will come to the negotiating table with a few ideas about what their skills are worth in the marketplace. Those ideas might be incorrect, or they might be spot on. Either way, it is important for you to know the appropriate pay for the position for which you are hiring—which may or may not coincide with the appropriate pay for the candidate.
In this job market, many candidates are applying to jobs below their experience level. Decide ahead of time whether you will be willing to pay an over-qualified candidate more money, but remember that you have to balance the position requirements with the candidate’s skills. It doesn’t matter if the person is a rocket scientist. If you are just hiring them to mop the floor in the rocket ship, you likely won’t ever see the candidate’s extra skills; and you shouldn’t be paying for them (ignore this advice if you reside in a Hallmark movie).
Once you know the market price for a candidate, you can begin to negotiate their pay with more confidence. You will also know when to let an overconfident candidate walk out the door.
Sell the Compensation Package
Many candidates will focus on their salary or hourly wage when they think about compensation. However, most companies offer a compensation package that includes health/dental insurance, vacation days, and a retirement plan. These parts of the compensation package can vary wildly, and can end up adding or subtracting thousands of dollars from an annual salary. Be sure to bring this up in your negotiations with the candidate.
Prepare for Counteroffers
Counteroffers can arise from a candidate’s current employer, or other companies who might be pursuing the candidate. Before a candidate leaves your office for the first time, try to cushion them against counteroffers. Perhaps mention that their current employer may try to entice them to stay with a pay increase, or some other kind of compensation. Remind the candidate about the other, non-monetary things that they enjoyed about your company. Lay the groundwork for the candidate to turn down any counteroffers.
Know the Rules for Top Talent
The above rules apply to most ordinary positions within a company. As most people know, the rules can change wildly when hiring top talent for high level positions. Determine ahead of time, with multiple stakeholders, how much your company can afford to pay top talent. Further, determine how much your company needs to have certain candidates on board. Some talent can truly be priceless, so be sure to nab them with a competitive salary!
These are tips for negotiating compensation with candidates… but should you negotiate at all? Check out this article, and report back. Leave a comment below, or send me a tweet: @ithinkther4iamb
IMAGE: Courtesy of Flickr by bark