What’s Negotiable When You Make an Offer of Employment?

Leora Baumgarten —  July 1, 2015 — Leave a comment

The finish line is in sight. You clicked send, and the employment offer is now in the hands, or at least the inbox of your future employee. You let out a sigh of relief. You and your team have been at it for months, and you have finally found the ideal candidate for a key hire. I bet you feel eager and excited to move along and get this person onboard. I know that’s how I feel when I get to this part of the recruiting process.

But your heart sinks when you read the candidate’s reply asking for a time to chat about the details of your offer. The finish line seems to be getting further away.  Don’t panic! Here are a few key things to wrap your head around as you launch into the final stretch of the recruiting process.

negotiation

It’s normal.

Salary negotiations are a normal part of business, just like contract negotiations. A quick Google search on salary negotiation yields nearly 3 million results. Most of the blogs and articles I looked at are geared towards coaching candidates, which suggests that neither you nor I should be surprised when a candidate negotiates salary or benefits.

Take heart, especially if negotiating is part of the job expectations (work behaviors) for the position you’re hiring for.  If negotiating is a job skill you’re expecting (for example sales reps, purchasing managers, or project managers) then you might actually be pleased to see the skills in action. Soon enough the candidate may be an employee using these same strategies on your company’s behalf.

Don’t go in blind.

Craft a strategy and a negotiation plan. Employer’s negotiating strategy can be strongly impacted by the job title and experience level needed.  Every position does NOT carry equal opportunity for negotiation. Consequently, candidates applying for entry level positions, or positions where a larger pool of qualified talent is available, are likely to find negotiations less fruitful. While candidates with high level technical skills or advanced experience or education may find that they have more leverage.

If you expect the candidate to negotiate, have an understanding of your budget and know when you are willing to walk away.  Consider what parts of the compensation package you are able to negotiate.  Total compensation is more than just the employee’s salary, consequently it is advisable for the employer to uncover what the candidate may value and won’t increase the base pay but will build good will and reward top talent for a job well done.

Here are a few ideas for negotiation:

  • vacation days – especially around public holidays
  • work from home options
  • available perks
  • bonuses on success
  • paid training
  • travel
  • mentoring opportunities
  • time to volunteer

Build rapport.

During an employment negotiation you are building a working relationship and laying the foundation and tone for the future. Both parties should behave professionally. Look for common ground that will satisfy the candidate and not break the bank.  Look for win-win opportunities. Consider the risk and cost of losing this candidate and having to go back to square one with recruiting.

Other influences.

The state of the economy, in particular the employment market, may impact the negotiation. A recent report from the Wall Street Journal confirms that the job market is heating up. Non-farm payrolls are on the rise, and unemployment is falling. Additionally, the aggregate weekly hours of all employees is as high as we’ve seen in a decade. While wages are not yet reported to be on the rise, there is considerable pressure suggesting that may change. It’s not 2009 any more and there is competition for top talent.

Candidates are well informed, and knowledge is power. Candidates use a variety of resources to know what constitutes a competitive wage and benefits package in their industry and geography. Candidates also have access to online employer reviews and may use social media to network to current or past employees. The online resources available to candidates have increased substantially and this knowledge can empower candidates when they negotiate.

Remember that every job deserves the right person and part of the process of getting the right person might well include a salary negotiation. This negotiation is a dialogue between two people intending to reach a mutually beneficial employment outcome.

Leora Baumgarten

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Leora is Vice President of NewHire and a pro when it comes to hiring & recruiting for SMBs. When not at the office, you can find her swimming in Lake Michigan or spending time with her family in Chicago’s Hyde Park neighborhood. Connect with her on Google+.

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