While every industry may have a unique approach, any organization looking to add new members to their team should have a set of tried-and-true practices prepared to ensure that the salary negotiation process when adding new members to your team is successful for both parties. Based on our professional experience and the trends we are currently experiencing in the Canadian job market, we’ll explore effective salary negotiation tactics with two goals in mind throughout this article.
The first goal is not to overpay. But while that goal is relatively obvious, it needs to be tempered and guided by the fact that today’s hiring market is experiencing massive upheaval due to the wide-ranging effects of a global pandemic. The second goal is related to the first. While devised to save your company money, your salary negotiation strategies must also consider your broader business aims, many of which revolve around the quality of candidates you bring on board. Here are some of the best salary negotiation strategies for nearly any hire you’re looking to land.
Invest in Research
Before you begin crafting your job description, take the time required to be as well-informed as possible about the current marketplace and industry trends. Understanding your budget for the position is a must, but aside from that, you should have an excellent idea of salary ranges in your area and throughout other major cities in Canada. For companies specifically in Ottawa, we’ve developed a set of handy salary guides in the fields of Legal, Accounting, Finance, & Payroll, Corporate Services, Technology, and Construction. These guides will give you up-to-date insights into what companies are paying for hundreds of different positions.
After considering the existing economic conditions, broadly and within your industry, coupled with internal and external salary data, you’ll be able to better calibrate the job requirements. Throughout this process, you’ll also become keenly aware of what is reasonable and fair to ask of the potential employee. Of course, it’s also crucial to consider the scarcity or abundance of the skill-set you’re looking for, as well as the law pertaining to salaries and discussion of compensation. In some provinces, like Ontario, it’s illegal to ask a candidate about their current or previous salary history.
Specify a Salary Range Up-Front
Regardless of the legal status of posting salaries along with job postings within your governing jurisdiction, the practice of doing so is a sound one. Research shows that clarifying the salary range for any given position as early as possible while slightly narrowing the field of qualified candidates makes the entire salary negotiation process far more likely to yield a result both parties are happy with.
Clearly Identify the Job Level
The process of managing expectations between the employer and candidate is of paramount importance when it comes to salary negotiation. Ensuring that the job level or skill level is clearly presented and negotiated as early as possible will help avoid confusion and a dreaded mismatch of expectations.
Consider that when you add a laundry list of “nice to haves” in your job descriptions, you’re likely to attract candidates that are outside your salary scope and you could face difficulties while negotiating with overqualified or underqualified candidates.
Emphasize Career Advancement Opportunities
If there are opportunities for career advancement within your organization, don’t hesitate to mention them throughout the negotiation process. Candidates who want to learn and grow throughout their careers are an asset to any organization. Are there specific opportunities that you can see down the line for a candidate in this position? Is there a great mentor or mentee opportunity to be explored for the candidate? These potential future benefits can aid you in the salary negotiation process.
Highlight the Benefits of Working for your Organization
Consider that while many employees continue to look for the standard fare of benefits like a comprehensive health insurance package, more and more candidates are looking for intangible benefits.
If your organization offers a set of excellent benefits, advocate this to the candidate through the written job description and your communications with them. A competitive benefits package will often help temper your candidates’ salary expectations as they consider the totality of the compensation they could potentially receive.
Furthermore, don’t forget to showcase your company’s culture and include what makes it unique. Highlight excellent working conditions, professional development opportunities, stock options, tuition reimbursement, and other intangibles. Perhaps you have an extremely generous vacation policy, or you don’t mind providing the option of a hybrid working environment; offering the candidate the option to work from home shows flexibility within your management style.
Don’t Lead with your Top Offer
As the country begins to recuperate from a lengthy pandemic with business and consumer demand continuing to rise, we are observing a surging demand for candidates across many sectors. Salaries are growing quickly, and candidates are aware that the market is in their favour. As a result, it’s important to recognize that most candidates are aware that your starting offer is negotiable and will attempt to negotiate upwards with some measure of confidence. As a result, you should plan your opening offer accordingly.
Observe the Negotiation Closely and Calibrate Accordingly
Salary negotiation can be highly revealing, both for the employer and potential employee. While keeping in mind your organization’s goals for the new hire, always remember that they are likely to be judging both your competence and willingness to meet them in the middle. How a candidate negotiates may give you valuable insight into how they could perform in a specific position. Roles that require cross-functional collaboration with teams or employees may be ill-suited for a candidate that can’t successfully navigate a salary negotiation or look for alternatives.
As the entire process of back-and-forth continues, make sure you’re willing to calibrate your offer. Consider the following:
- Is the candidate at the start, middle or nearing the end of their career? This consideration alone may foreshadow their motivations.
- Attempt to understand what is truly important to the candidate, both now and in their expected working profession’s short and long-term career.
Be Ready to Communicate Why your Salary Offer is Competitive
Though you’ve done the legwork of presenting your offer as fair and equitable, there may still be an impasse. If this occurs, retrieve the data needed to bring your point to fruition. Ensure that you’re presenting the data empathetically to address the needs of the candidate.
And speaking of a candidate’s needs, actively listen to their points, and demonstrate an understanding as to why they have those specific needs.. Once this process is complete, pay close attention to the reaction of the candidate. Are they ready to accept, or will the negotiation process continue?
Be Willing to Let a Candidate Go and Communicate Often
Dismissing highly qualified candidates due to high salary expectations can be disheartening. However, overpaying for a candidate can be a long-term mistake as it can financially burden your company and negatively affect potential future negotiations.
It’s better to keep searching for a candidate or consider hiring a slightly less qualified candidate and dedicate internal resources to their on-the-job training to get them to your desired skill and experience level.
A salary negotiation process can be a stressful event for a candidate. After all, they are bargaining for their livelihood, and that can often have a very meaningful impact on the quality of life for both them and their family. Keeping that in mind, it’s necessary to hold a very robust and open line of communication with the candidate. Give them ample time to ask questions and for you to adjust the offer. If your organization is not in a massive rush to complete the hire, consider giving the candidate a healthy but still sensible amount of time to analyze the offer. After all, it’s a big decision.
The Bottom Line
How important is acquiring this potential hire? If you show a certain level of despair, your salary negotiation may quickly turn into a capitulation. Paying more than you can afford, not in line with the pay ranges of your current employees, or what’s commonplace in the market, can result in negative after-effects for both the candidate and your organization.
Following the strategies above will lead to long-term successful relationships with your employees and help you determine what negotiation tactics work for both you and your organization.