Okay, so your team has liked a candidate and now it’s time to take on that tricky challenge – closing salary and making a compelling offer.
Most new recruiters and founders often start this on a wrong footing.
Let’s dive into how you can negotiate salaries with candidates in a way that benefits everyone.
Remember: It’s Not a Zero-Sum Game
The cardinal rule of salary negotiations is this:
You don’t win if they lose.
It’s easy to fall into the trap of thinking that every dollar you save on a candidate’s salary is a win for the company. But that’s short-sighted thinking.
Even if you are able to make the candidate accept your inferior offer , they will join reluctantly and will not perform as well or worse – will keep looking for a better offer soon.
The candidate should naturally feel excited to join your company. Else your offer has failed.
Build Rapport and Trust Early
We all know – negotiating with strangers is hard. That’s why it’s crucial to build rapport and trust with candidates early in the hiring process. Don’t wait until the final stages to start building a relationship.
Have candid conversations throughout the interview process. Share insights about your company culture, challenges, and vision. Encourage candidates to open up about their career aspirations and concerns. These earlier interactions will make the final negotiation much smoother.
Focus on Their Overall Interests
When we are looking for something, we have a larger goal or interest in mind.
For e.g. when I am asking for health insurance, my interest is to protect my kids. When I am asking for flexibility to work from my home town for a month, my interest is to stay with my elderly parents.
Understanding these interests is far more powerful than just noting down my ask.
The more you know about what drives them, the more options you have to craft an appealing offer. Read on.
Tailor-make your offers
When you understand the “interests” of the candidates, beyond their “asks”, it opens up several possibilities.
For instance:
- If they have elderly parents in their home town, you can offer them 1 month of WFH every 6 months or so.
- If you know a candidate is passionate about continuous learning, you could include a generous professional development budget in their offer.
- For someone with young children, enhanced parental leave or childcare benefits might be the deciding factor.
These customized benefits might not cost you much, but they can make the candidate feel understood and valued. Thus not only just making them join but also making them stay for longer at your company.
How to minimise salary negotiations
Since you have read so far, here is something to consider.
At Cutshort, like some other companies like Buffer, Sahaj Software, Even Health, we have eliminated salary negotiations altogether. We’ve developed an Objective, Fair & Transparent (OFT) compensation model that calculates salaries based on the value of the work, not on a candidate’s negotiation skills.
You can read more about it here: https://medium.com/cutshort/we-dont-negotiate-salaries-anymore-and-it-feels-liberating-9dd6d7971d63
This approach has allowed us to make competitive offers right off the bat, often surprising candidates with offers higher than they expected. It’s eliminated the stress of negotiations for both sides and ensured that we’re treating all candidates and employees fairly.
This doesn’t mean we can’t personlize the offers for each candidate. Options can be shuffled while staying within the overall budget suggested by the model.
While this model might not work for every company, the principles behind it are universally applicable. Be transparent, focus on fairness, and always aim for a win-win outcome.
Conclusion
Negotiating salaries with candidates doesn’t have to be a battle. By focusing on building trust, understanding candidates’ overall interests, and crafting customized offers, you can turn this process into a collaborative effort to find the best outcome for both parties.
Remember, your goal isn’t just to fill a position—it’s to bring on board an excited, motivated team member who will contribute to your company’s success for years to come. A little extra effort in the negotiation process can pay dividends in employee satisfaction and retention down the line.
So, the next time you’re preparing to make an offer, think beyond the numbers. How can you create an offer that not only meets your budget but also makes the candidate feel truly valued? That’s the key to successful salary negotiations.
