Salary negotiation is one aspect of being an employer that most of them dread. On the one hand, it is a necessary aspect of dealing with employees. But, on another, it can seem like a difficult skill in its own right that few employers grow to master.
To help you better handle employees, we will give you a couple of salary negotiation strategies for employers.
With luck, these should give you an idea of what salary negotiation entails and how to best approach it.
6 Salary Negotiation Strategies For Employers
Successful salary negotiation is always a compromise. Neither you nor your employee gets exactly what you wanted, but you both are reasonably satisfied after the ordeal.
To make this possible, you need to understand what your employee feels during the negotiation process and what factors can turn the process in your favor.
So, let’s examine various strategies that will set the right playfield for fruitful negotiation and enable you to achieve satisfactory results.
1. Be Aware of Industry Standards
How well your salary negotiations go is primarily based on how well you prepare. A part of your preparation is what you are doing now (learning about negotiation skills). But, the other part is learning about industry standards and salary ranges.
By knowing what your employees are likely to be paid in other companies, you can set the bar for your and their expectations. Furthermore, you cannot be caught off-guard if the employee claims they received a substantially better offer from a different company.
It would be best to look into employment availability and whether your employee has better options in the local area. The better you understand your competition, the better you can set yourself up to look like the better option. And, if you also learn how to screen your employees, you will know what offer they will deem as fair.
2. Set A Clear Range
Once you have a good understanding of the industry standards, you can look to set a salary range. Begin at the industry average, see how low you expect the employee to accept, and how high you are ready to go.
The idea here is always to lowball it and gradually come to an agreeable sum. Start at the minimum range, and work your way up. If the employee tries to go over the maximum, explain why that won’t work for you.
With a premade salary range, you can be far more comfortable during negotiations and set boundaries to what does and what doesn’t work for you.
3. Be Transparent
One thing that all employees appreciate is for you to be transparent with them. From the get-go, explain what your expectations of them are, what you hope that they’ll bring to the company, and what their salary range is like.
Keep in mind that your employees are feeling you out to get the most. Therefore, while they are hopeful, they are also navigating uncharted territory. So, try to make them feel at ease by explaining your company’s goal, how well you are doing so far, and what your needs of them are. The more they understand your company’s situation, the more likely they will accept your offer.
4. Different Benefits
Besides salary range, you can also look to offer your employee different monetary benefits for signing up. For instance, most employees that plan on relocating for the job could benefit from a welcome bonus. This benefit can help them set themselves up and ease their transition.
Others can benefit from you handling their transportation needs or paying for daycare. You can even offer to pay for personal trainers or provide company-wide refreshments during work hours.
The more you research your potential employees, the better you can outline where a benefit can help convince them. And most of these benefits are far more cost-effective than a simple salary increase.
5. Try Non-Money Based Options
It is worth noting that not all employees are simply looking for money when considering jobs. Some may value longer vacations. Others may prefer flexible working hours or a choice between working in-office or working from home.
Try to outline which work options are suitable for your company, and offer them to your employees. Multiple studies have shown that the bigger the net worth of an employee’s salary is, the less they value money. So, if you employ some high-payed people, it is worth exploring the non-money-based benefits you can offer.
6. Be The One That Starts The Negotiation
Finally, it is worth noting that you should start the salary negotiations. If you are performing the job interview, make sure you drive the conversation towards salary. This may look trivial, but it sets you as the instigator and ensures that you are the one that guides the conversation.
If you are talking with an employee about raising their pay, be the one that calls them in. By recognizing their improvement and contribution to your company, you can look to offer them a pay increase before they are aware that they deserve it.
In that case, the negotiations themselves won’t last long. And your employee will feel far more appreciated than if they had to approach you for a pay raise.
While there are other salary negotiation strategies for employers, it is worth noting that understanding strategies isn’t enough.
Negotiation is a skill that takes experience to hone properly. So, don’t expect that reading up online will make you a master. Instead, try to work on your skills and see them gradually increase.
Good negotiations skills can also help you reap benefits from performance reviews, as you will be able to outline what your employees need to improve. So, if you plan on working as an employee, don’t skip on this vital skill. Instead, try to work on it regularly.
Before long, you’ll be able to drive negotiations as you see fit. And you will make sure that you only hire employees worth their merit.
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Author Bio: Curtis Brown has worked as a business owner and marketing manager for over 15 years. He now primarily focuses on consultation work and writing helpful articles for companies like Peasley Transfer & Storage.