In this second part of his article Rahul Krishna, Manager – Talent Acquisition at Espire Infolabs, talks of the other four components of a successful salary negotiation for an HR professional. Read, learn, grow.
1. Present the offer as a total reward package
When making the offer, present it as an itemized total reward package so people can see the true value of what is being offered to them. So, include: salary, size of any bonus, size of any retirement fund with monetary value of contribution, plus value of any health insurance premium value, number of vacation days, company car value, personal training budget, etc. Also, itemize any non monetary perks like flexible working and casual dress code.
2. Leave some negotiation room in your offer
Research shows that most managers tend to leave some negotiation room in their offer. This is not necessarily the same as ‘shooting low’, because if you make too low an offer, a candidate can be insulted and you might force him/her into driving a harder bargain than intended. Always make a fair offer based on their current salary, their need for advancement and market expectations; but leave enough room to negotiate. Don’t forget, many people like to negotiate and see it as part of a relationship building process.
If an employee refuses your offer and requests a higher salary, ask them what their expectation is and ask them to provide economic evidence for their position. Also, ask them to detail their past achievements and likely contributions to justify their requested starting salary. This is a strong defensive play, which firmly pushes the ball back into their court. Who knows, they may persuade you they are worth it, or they may be forced into a reality check, which could make them more accommodating.
4. Bargaining tools
You should also have an array of bargaining tools—based on your accumulated knowledge of the candidate—at your disposal that you can offer in exchange for salary. For example, perhaps the option of working from home, or a compressed week may be more attractive to your candidate in preference for salary. Perhaps you could make pay raises conditional based on achieving agreed performance goals. You could enhance their bonus. There are many other options available to you in the event that the candidate rejects your initial offer.
There is no magic formula for handling a salary-negotiation, but I hope you can see there are steps you can take to perform more effective salary negotiations more of the time. A well thought out negotiating and closing process is critical to your success!