Negotiating the right salary with a new hire
Offering the right salary is crucial when looking to recruit top talent: offer a package too low and there’s a threat of losing a great candidate, offer a package too high and you could leave your business vulnerable to budget overspend, or your other employees finding out about higher wages and forcing salary negotiations across the board.
With this in mind, Aaron Wallis Sales Recruitment has collated some essential tips for offering the right salary package:
1. Review all possible factors – both internal and external
Every job role will be different and for this reason, it’s impossible to give a ‘one size fits all’ blueprint for offering the right salary. It’s important to consider all of the internal and external factors that could feed into your salary offer decision, giving yourself the full picture of factors to review.
Useful external factors to consider include how readily available the skills of a candidate you are after are and the fair market rate for your geographic area: which could suggest a higher salary offer if your business is located in London and the sort of skills you’re after are in high demand.
Internal business factors can play a large part as well, for example, the length of time that you’ve been recruiting for a position and the amount of recruitment budget you have to play with. If you’ve been recruiting for a role for over 6 months without any traction this could mean an urgency to fill the position: which may mean increasing your salary offers.
2. Consider implementing salary bands / grades
A combination of salary bands and job grades can be a great tool for communicating expectations to your employees. Job grades are the definitions of your roles, assessing how junior or senior someone is by a specific job title and salary bands are the ranges of compensation that can fit within a job title.
Having transparent salary ranges by job title can help guide your hiring managers around the ranges of salary they should offer candidates, as well as providing a clear motivation for your employees to work their way up a band through high performance.
3. Think carefully about bonus schemes / packages
An appealing bonus or commission scheme can be a key pull factor for attracting top talent to your business, especially in a sales environment. Try to create a bonus scheme which creates a ‘win-win’ for both your business and the employee, where meeting targets will translate into a higher reward for both parties.
Equally, as crucial as an attractive bonus scheme can be to recruiting staff, it can often be a common pitfall for businesses. It can be hard to change a bonus scheme once an employee has signed a contract, it’s important to ensure that your commission systems are sustainable and that your not placing your revenues under threat.
4. It’s more than just money
Think about the whole package, aside from the monetary reward that comes with the job. Things like the amount of annual leave you receive within a role, as well the opportunities for flexible working and the workplace culture of your business can really count for reasons why a candidate should choose your company. Similarly, if your business expects long working hours, outside of the normal 9-5, you could suggest that you may need to offer a higher salary to entice a candidate to join your company.
5. Be prepared to walk away
As a hiring manager, the last thing you want to do is lose your target and have to start the recruitment process all over again. Maybe you had a second choice, but even having to go crawling back to them is not without its own issues. However, you can’t be held hostage, and every role has its pay cap. If you’re simply not getting your candidate to see sense, be prepared to walk away.
Robert Scott, Managing Director at Aaron Wallis Sales Recruitment said: “Offering an appealing salary in the context of the role and your company’s expectations is essential to attracting staff who will hit the ground running. Often it’s a balance between keeping your budgets on track but also providing an incentive for the top talent out there to join your business”.