Preparing for Salary Negotiations For a New Employee
Negotiating a salary for a new hire is not a game of gamble. While it may feel a bit like playing Poker, negotiating salary is more methodical than one might believe. It’s a process of evaluation, comparables to other positions within your company, experience of the candidate, legislative requirements, and ultimately what your top dollar is. With new online compensation resources, businesses can now stay competitive in the marketplace, while not giving away the bank. Here are five tips to help you negotiate pay.
Comparables:
Chances are candidates have looked at similar jobs in the marketplace to see what the job description is, including salary. Your HR staff will probably do the same. Make sure that as you compare similar positions, 70% of the description matches up with what you expect out of the job you have written. This becomes your base when the time for negotiating salary comes around. At PrideStaff Financial, we use an advanced compensation portal that gathers data from a variety of sources to ensure your salary is in the correct range (if you would like a free report contact us today).
Candidate’s skill level:
Once a base is determined, it’s time to look at a candidate’s proficiency or skill level. If a candidate’s experience is a perfect match for the job description, expect to negotiate a higher salary than you might have originally anticipated. If a candidate knows the skills but hasn’t applied them in the field, then their proficiency at the job comes into play. They may have that “go getter” attitude you’re looking for and will quickly learn the job, but their lack of experience are still in question. This is when evaluating their worth for negotiating salary is vital.
Scarcity principal:
Everyone wants what they don’t have. This is familiar statement and it carries weight when it comes to running a business. If when creating the job description you target specialized skills, then you may need to compensate higher to find the right fit. If the job is in a specialized sector, what are you willing to pay a candidate that meets or goes beyond those qualifications? This is an important piece and it requires an analysis of other comparable jobs in the marketplace so that you can stay competitve with what other businesses may offer.
Stay consistent with pay structure:
Reviewing both external information and internal information is a necessity when determining your company’s pay structure. There can be mulitple levels or job catagories that have minimum and maximum salary caps. Having a metric or standardized way of developing heirarchy among job groups will give you a better indication of what a salary should be for any given job you hire for or create.
Do you participate in surveys?:
Pay surveys are usually done by region, job category or sector. Getting involved with surveys can play a vital role in how you write a job description and determine its pay. Being able to connect with other employers in the same market will give you access to necessary information about the base of your company’s compensation practices. Surveys are also a great way to understand the cost of living index and how it affects your company’s compensation packages; giving you more accurate information to negotiate with when salary discussions take place.
Competitive salaries are vital in the current marketplace. Recruiting and retention are both directly impacted by staying up to date with salary fluctuations. PrideStaff Financial stays on top of current trends and analysis of compensation negotiations. Contact us today to learn how we can help you meet your business needs and provide accurate salary data.
