Salary Negotiation Strategies for Employers

Salary Negotiation Strategies for Employers

When it comes to negotiating salaries, employers often have the upper hand. After all, they’re the ones with the job openings and the power to hire (and fire) employees.

But that doesn’t mean you should take a hard-line approach to negotiating salaries with potential employees. In fact, there are several salary negotiation strategies you can use that will benefit both you and the employee so that everyone feels satisfied with the outcome.

Here are some of the top ones!

1. Don’t Lowball Initial Offers

When you first make an offer to a potential employee, don’t lowball them. Not only is this bad for morale, but it also sets a precedent for future salary negotiations. If you start low, the employee will likely expect that you’ll continue to lowball them in the future.

Instead, make a fair initial offer that aligns with what other employers are offering for similar positions. This will show the employee that you’re serious about attracting and retaining top talent.

Make yourself aware of industry averages for the position you’re hiring for so you have a good starting point. Glassdoor,, and the Bureau of Labor Statistics are great resources for this.

2. Set Ranges, Not Specific Numbers

When you make an offer to an employee, give them a range instead of a specific number. For example, say something like, “We’re looking to pay between AU$X and AU$Y for this position.”

This allows the employee some room to negotiate and shows that you’re willing to be flexible. It also takes some of the pressure off of you to come up with a specific number on the spot.

When you’re upfront about the salary range, it also shows that you’re transparent about your budget and what you can realistically afford to pay.

3. Consider Non-Monetary Perks

In some cases, you may not be able to (or want to) increase the monetary salary offer. But that doesn’t mean you’re powerless in the negotiation.

There are plenty of non-monetary perks and benefits you can offer that will sweeten the deal for the employee. These could include things like:

  • Flexible work hours
  • Working from home one or two days per week
  • Additional vacation days
  • Tuition reimbursement
  • Gym membership reimbursement
  • Entertainment allowances
  • Childcare benefits
  • Commuter benefits

Get creative and think about what would be most valuable to the employee. In many cases, these non-monetary perks are just as important (if not more important) than a higher salary.

4. Listen to Their Counter Offer

When the employee counters your offer, really listen to what they’re saying and try to understand their perspective. They may have valid reasons for asking for a higher salary, and if you can see eye-to-eye, you may be able to find some middle ground.

Remember that counter offers usually are a normal part of the salary negotiation process, so don’t take it personally. Just stay calm and level-headed, and be willing to compromise if the employee has a good case.

You could always come back with a counter offer of your own, but make sure it’s reasonable.

5. Be Ready to Walk Away

If you’ve made a fair offer and the employee is still unhappy, be prepared to walk away from the negotiation. If they’re not willing to budge, then it’s likely that they’re not going to be a good fit for your company anyway.

However, don’t turn your back on the negotiation entirely. Instead, let the employee know that you’re open to revisiting the conversation if they change their mind and that this is the maximum you’re willing to pay.

That way, you’re not burning any bridges, and you’re still leaving the door open for future negotiation.

6. Consider a Signing Bonus

If you really want to sweeten the pot, you could consider offering a signing bonus. This is a one-time payment given to the employee when they sign their employment contract.

Signing bonuses are typically used as an incentive to get the employee to accept your offer, and they can be a great way to close the salary negotiation. Immediate gratification in the form of a big, fat check is hard to resist!

Just be sure that you don’t offer a signing bonus that’s too high, or you could end up blowing your budget.

7. Give it Time

If you’re really stuck, sometimes the best thing you can do is take a step back and give it some time. Let the employee think about your offer overnight (or for a few days, if possible) and see if they come back with any counter offers.

In most cases, people are more reasonable when they’ve had time to think about things, so this could be a good way to get the negotiation moving again. Most employers fall into the trap of thinking that the employee will just move on, so they force a decision on the spot.

But if you give the employee some time to mull things over, they’ll usually come back with a more reasonable offer.

8. Promise a Review in Six Months

If the employee is really pushing for a higher salary, one thing you could consider is promising them a review after six months (or whatever timeframe you feel comfortable with). This way, they know that their salary will be re-evaluated down the road, and they may have a chance to get the raise they’re looking for.

This strategy can be a great way to buy some time and placate the employee without necessarily committing to a higher salary right away. One of the fears of employees is that they’ll be “stuck” at their current salary, so this can be a great way to ease their fears and show them that this isn’t the case.

People Over Process

At the end of the day, you want to make sure that you’re hiring the best person for the job – not necessarily the person who’ll give you the least headaches during salary negotiation.

If you get too caught up in process and protocol, you could end up missing out on a great candidate. So, while it’s important to have a plan and process in place for salary negotiation, don’t be afraid to deviate from it if you find the right person.

After all, the goal is to build a strong team that will help your business succeed. And sometimes, you have to be willing to bend the rules to make that happen.

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