How to Handle Salary Discussions When Hiring

Jul 4, 2023
HR and Recruiting Industry Information, Recruiting Best Practices, Recruiting Software

When it’s time to bring on a new hire, it can be a challenge to know how to handle compensation. This is especially the case when you’re filling a brand-new position without an established salary range or looking to bring on someone who is more experienced than the individual they’re replacing. Our guide to handling salary discussions in the recruiting process can help you move forward with confidence.

When to Discuss Salary

The first question that often comes up in the hiring process is when to start discussing salary with a potential candidate. The consensus is generally to at least include a range in the job listing to avoid wasting everyone’s time. A potential applicant may not want to take the time to apply for a job if the salary isn’t close to what they expect to earn. Additionally, it wastes the hiring manager or recruiter’s time when reviewing applications and interviewing people who aren’t really interested because of the salary.

Still not convinced? In our recent webinar with Indeed, we discussed some interesting stats with participants. Approximately 12 percent of job postings include salary information (up from 8 percent in 2019), yet more than 60 percent of candidates say that pay is the most important aspect. Your listings can stand out in a sea of competitors when you include pay information, offering transparency that jobseekers will appreciate.

Of course, you don’t have to give an exact number right away. Providing a range or asking the candidate to provide an expected salary when applying helps to ensure that everyone is on the same page.

How to Discuss Salary

It can also be challenging to discuss salary requirements if you’re not familiar with the process or comfortable talking about numbers. Take some time to familiarize yourself with common salary negotiation tactics and average pay rates for similar positions. The more information you have, the better equipped you’ll be to have a discussion.

Steps to Manage Salary Requirements

Ready to get started? Follow these steps to better manage salary requirements and discussions in the hiring process.

Start with the listing

As mentioned, your salary consideration should start when you create the posting for the open position. Whether you’re replacing someone or creating a new role, do some research on salary ranges in the field and similar positions. You can get a lot of useful information on sites like Glassdoor and LinkedIn, helping to ensure that your range is competitive and will attract top candidates.

Establish a top-end figure

It’s also important to establish a number that represents the very highest you can go for a new hire. Most candidates will negotiate the initial offer, so creating a top-end figure helps to ensure you’re not going over your labor budget in the process.

Be open to discussion

If you’re unwilling to negotiate on salary, a potential hire may walk away as this can signify a lack of flexibility. Candidates may also perceive this action as a knock on what they would bring to the role, such as specific abilities or experience. Be open to discuss the salary and consider what else you can offer if the pay scale is rigid.

Understand where the candidate is coming from

When you’re considering a new job, is salary important to you? The answer is likely yes. So, you can understand where someone else is coming from when wanting to know what to expect in terms of pay.

Try to put yourself in your candidate’s shoes when discussing compensation. This individual is considering a significant change to their situation by taking on a new role and all that comes with such a shift. They also need to support themselves and any dependents they have, so salary is certainly a top consideration when deciding whether to make a professional change.

FAQ about Salary and Hiring

Explore some of the most commonly asked questions from employers around salary details in the hiring process.

Should you include a salary range in your job listings?

Yes, it’s generally recommended to include at least a range in your job listings. New legislation in various cities and states will also require the inclusion of salary data in postings. It’s worthwhile to get in the habit of including it when filling positions, even if your city or state doesn’t require it at this time.

What should you do if a candidate wants to negotiate salary?

When a candidate comes in ready to negotiate salary, the best thing you can do is be prepared. Arm yourself with information and data so you can back up the offered range. It’s also important to be open to discussion. If an applicant has unique skills or extensive experience that will be particularly useful in the role, they likely deserve to sit at the higher end of the range rather than the entry point.

What should you do if you can’t go higher on salary?

Budgets are essential to a successful business. Going way over your established labor budget to secure a top candidate probably doesn’t make sense, especially if you run a smaller company. But you do have options!

Consider other benefits you could offer. For example, you could offer additional paid time off or a more flexible work schedule as a way to sweeten the deal. Other considerations include waiving or shortening the standard waiting period for health benefits, increasing a retirement contribution match, or providing upgraded equipment for personal use.

By taking a careful yet transparent approach to compensation, you can improve your hiring process while attracting more candidates to apply for your open roles.

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