Compensation analysts and administrators play an important role in attracting high-quality employees and keeping costs down. Salary negotiations are especially important when recruiting people to fill executive and professional positions. You need to offer an average salary that is competitive with other employers in your industry, but you cannot offer such a high salary that it would hurt your company’s profitability. Use these tips to work through salary negotiations and answer questions from candidates and employees.
Remember salary negotiation is never a one-way street. Most people assume the job candidate is the one sweating the negotiation process, but this is also a critical time for HR professionals. If you do not offer a high enough salary, your top candidate might accept a job from a competitor. You must conduct a salary survey before you interview candidates or else you will not know what to offer them during salary negotiations. If your three major competitors pay an average of $50,000 per year for a certain job, find out if you can offer a great candidate $51,000.
Avoid asking candidates what they make at their current jobs. Some candidates will tell the truth, but others will not. It is also very difficult to verify salary information for consultants or people who do contract work, so you may not be able to determine what they are really making. Start the salary negotiations with a little wiggle room to move up or down. You might not be able to offer a candidate $60,000 per year, but if you start off with an offer of $52,000, you might be able to negotiate up to $55,000.
When you are answering questions about the average salary of a current employee, you have to walk a fine line between revealing too much information and clamming up whenever the employee asks a question. If you are not willing to answer questions, employees might think you are paying them less than they are worth. In Cheyenne, Wyoming, city officials recently found out it would cost nearly $700,000 per year to bring employee salaries in line with recommended pay levels. The city wants to keep the public out of talks to discuss the new pay structure, which creates the appearance that officials are hiding something. Give employees as much information as possible, or you might spark a backlash among your most outspoken workers.
Compensation professionals determine the right salaries for new employees and collect data to help determine pay raises for existing employees. When you are handling salary negotiations, you must conduct a salary survey ahead of time and determine how much money you have available to make an offer. If an existing employee asks a salary question, you must give a truthful answer without revealing confidential financial information. Managing salary negotiations is one of the toughest jobs in the HR field, but you can do it well if you are prepared.
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