How to win at the salary negotiation table
They say money talks, and for the majority of job candidates, salary is the number one factor when it comes to considering an offer. That’s what 73% of respondents said in Monster’s 2020 State of the Candidate survey; and more than half (54%) said they’ve changed jobs solely because the one they had wasn’t paying enough.
For recruiters and hiring managers, that may come as no surprise, especially in this competitive hiring landscape where there are more open positions than qualified candidates. In fact, nearly three-fourths (72%) of candidates revealed that they feel comfortable negotiating salary when accepting a new job. What’s more, younger job seekers are more likely to reject a lowball offer – with 63% of Millennials, 60% of Gen X, and 52% of Boomers saying they’d walk away.
“It’s not like the old days where the boss puts his feet on the desk and says, ‘what can you do for us?’” says Brian Binke, President/CEO of the Birmingham Group, a Berkley, MI-based recruiting firm. Today’s candidates expect companies to woo them – but does it always have to be money-oriented?
The fact is employers don’t always have the ability to meet candidates’ great (salary) expectations. “It’s a Catch-22 where for years and years, people were just happy to have a job. Then, all of a sudden, business is booming, so companies start paying more money. But how do I bring in the new guy and pay him more than the guy who’s been with me for 15 years?” says Binke.
The good news is maybe you don’t have to. In Monster’s State of the Recruiter survey from September 2019, only 27% of recruiters said that candidates had the upper hand when it comes to salary negotiation.
“For those who are actively employed but looking to make a change, other factors are often at play beyond salary,” says Binke. So while money may be the most important factor to start for some, people often end up taking the job at which everyone seems happiest. “Recruiters need to get candidates to consider: Would they feel comfortable working 50 hours a week at a place with a culture they don’t love for an extra few dollars a week?” says Binke.
In order to help you approach today’s money-focused, savvy and confident candidates to convince them to sign on, and still stick to your bottom line, we connected with recruiting professionals and dug deeper into the survey findings for some salary negotiation strategies that work.
First, know the salary negotiation landscape
Companies need to evaluate their compensation packages to ensure they are competitive, says Michael Solomon, managing partner and co-founder, of 10x Ascend, a salary negotiation coaching firm. “The cost of not being able to fill that important role may far outstrip the increase in base salary that may be needed to get the deal done,” he says.
Also important is for companies to try to get the best sense how their offer compares to their competitors, adds Binke. “Once you understand that, you have an idea of where you need to differentiate yourself,” he says. “Everyone in your interviewing process needs to knows what’s the ‘wow’ – why should somebody leave their company to come work for you?” If you can’t articulate what’s different about your opportunity, then the candidate is going to go with the higher bidder.
Get to know your candidate’s motivations
If your base salary on its own isn’t drawing top talent, it’s your job to point out the other valuable aspects of your compensation package – all of which candidates care a lot about. In the survey, in addition to salary, candidates said that other factors including time off/vacation days (39%), flexible work hours (34%), retirement benefits (33%) and company perks/benefits (33%) weighed heavily in their decision.
“I’ve seen people offer a candidate more money, when really what the candidate wanted was flexibility with hours or more vacation time,” says Dean Kaplan, CEO and president of The Kaplan Group, who regularly negotiates with high-level candidates. Make sure you’re listening to what their concerns are, then try and solve them, he says. If you’re competing with places that will pay at the high end of the market, but they also demand 18 hour days while your company offers work/life balance or flextime, that’s something you can point out.
Asking the right questions can help you find out what makes candidates tick, says Binke. “Ask them why they see your company as a good fit – let them tell you,” he says. Then, follow their lead to show how your company’s values align with theirs.
Discuss the value of your total package
If salary budgets are tight, ask yourself: are there creative ways around it? Things like a sign-on bonus, a relocation allowance, stronger benefits and perks, or a promise to revisit the salary in six months instead of a year can help.
“We’ve seen candidates take offers that were below someone’s ideal salary when any number of other variables (paid time off, remote working, title, continuing education budget, equity, etc.) was in line with or exceeded their personal goals,” says Solomon.
“Nearly every candidate in this market has multiple offers and we see that most are looking at offers more holistically,” says Peter Renault, senior talent acquisition manager for Cornerstone, a people development company. Sure, they want to be paid, but other factors like learning opportunities, career advancement tracks, flexible work schedules, the company culture, and the interview experience itself can help close the deal.
In fact, other than getting a raise, 42% of job candidates say their biggest goal for 2020 is to learn new skills. “It’s important to candidates that they can join a company that will invest in their growth,” says Renault. This may mean being able to attend conferences, have access to internal trainings, and financial support for continuing education.
Give them a glimpse into their future
“Candidates know starting salary is what their next raise is based on,” says Vicki Salemi, Monster’s career expert. However, being able to visualize growth within a company might make a lower offer worth considering.
Binke recommends inviting a staff member who was originally hired for the same role, who has since risen in the company. This can demonstrate upward mobility, and convince an unsure candidate that in the long run, they will be a lot better off pursuing the long-term opportunity with your company, rather than going for a slightly bigger paycheck in the short-term.
In fact, adding personal connection to your recruiting and hiring process can help spark that all-important chemistry with candidates. “We are much more likely to get a candidate to accept when they got to know our managers more and develop a more personal connections,” says Kaplan. “Offering little things like setting up a pre-hire lunch sets your company apart from the standard technical interview.”
The bottom line: “In the past, salary was taboo. Now it’s much more common to come up in the first conversation,” says Salemi. You want to try to be sure that the job seeker and the company are on the same page money-wise by at least discussing a range that is comfortable for both. From there, you can sweeten the deal by illustrating all of the other ways in which the company and the candidate are a good match. If in the end they still decide to go for a higher salary offer elsewhere, then you were probably dealing with the wrong candidate in the first place.
Salary can be a sticking point at the negotiation table, but it doesn’t have to prevent you from closing the deal. For more salary negotiation tips, sign up for Monster Hiring Solutions and prepare yourself for that next confident candidate you’re trying to hire.