When an employee comes forward wanting to negotiate their salary, you need to approach the situation correctly. This individual is coming to you because they believe their work is worth more than they are getting paid. You don’t want to cast a shadow on their value to your company, but you need to address their requests. The next time an employee or potential candidate wants to negotiate salary, follow these guidelines.
Research the Industry Averages
Before you enter any salary negotiation, you should know what other employers in your industry are paying employees. This information can help you be more competitive with your offer. It will also help prevent your best employees from leaving to work for the competition.
Use a Precise Number When Naming Salaries
Precise numbers are less likely to get a kickback from candidates and employees. For instance, if you name a salary of $48,000 per year, they are more likely to come back asking for more. Naming a salary like $48,790, and providing details on how you came up with the number, will help prevent you from getting stuck in negotiation.
Be Prepared for Counter Offers
That being said, if your employee has approached you about negotiating their salary, be prepared for counteroffers and additional negotiations. The best employees and candidates will receive counteroffers, but that doesn’t mean that offer is better. Work to show your employee that not all offers are as good as they seem. In fact, around 80% of employees who accept a counteroffer and move jobs only stay in the new position for six months.
Much of the time, managers are making high counteroffers because they really need someone in the job. Unfortunately, the company culture isn’t always a good fit, and there may be issues in the workplace that haven’t been resolved. Make sure your employee knows the grass isn’t always greener.
Talk to the Candidate/Employee About What Matters to Them
Knowing what is important to the employee or candidate can help you in salary negotiations as well. There may be something you can offer them beyond traditional salary/wages. For example, many employees want flexibility in their roles now. Being able to offer flexible hours or hybrid work options could be something that draws a candidate in or encourages an employee to stay. Benefits like health insurance paid time off, and other perks are also highly sought-after. Take the time to get to know what your employee wants.
Don’t Overdo It
Don’t overdo it when it comes to negotiating. Some employees will outgrow the organization or will need more than you are able to provide. You need to stick within your budget to maintain your business. Over-negotiating could hurt your company’s bottom line. Offer some transparency. Explain to the individual exactly how you came up with the offer by displaying research and numbers from the industry.
Find Top Talent Within Your Budget With A.C. Coy
A.C. Coy can help you find top talent that fits within your budget. Not to mention, we can help educate you about industry standards and trends. When it comes time to negotiate a salary, our team will take the reigns and discuss numbers with the candidate. If there are changes they’d like to be made or any other requests, we act as the middle man for negotiation. Learn more about how A.C. Coy can help your company.