Salary Negotiation: Tips for Managers to Run the Process Smoothly

Salary negotiations are often about reaching a general agreement between the employer and the potential employee. The article below outlines essential points and tips for managers to keep in mind when negotiating a salary fairly.

The candidate must feel valued by the company and fairly paid. High-level strategy and careful planning must be part of salary negotiation planning for the long-term success of a company’s business. It is necessary to discuss the candidate’s salary from a position of respect.

What is salary negotiation?

Salary negotiation is a conversation an employer should have with their potential employee to discuss a compensation package. This package usually includes wages, benefits, and a bonus system.

Salary negotiations are usually conducted by a recruiter, human resources specialist, or hiring manager, depending on the company. Such negotiations always occur during the hiring process at the interview, even before the candidate accepts the job offer from the company.

Studies have shown that about 58% of Americans accepted the original offer at their current level without negotiation, which is not correct.

What is salary negotiation for?

Potential employees need to ensure they receive the necessary compensation package corresponding to the value of their knowledge and skills in today’s labour market. Studies have shown that 22.6% of millennials need to learn how to negotiate their salary.

Honest employers are always open to salary negotiations. Many often even expect potential employees to talk about compensation. Employers need to attract new employees to work in the company, whom they could pay properly, depending on their experience and position. It will also help to retain the employee for a long time in the future.

Before the negotiation

Before negotiating a salary with a potential employee, do some internal research and determine a few things for yourself.

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  1. Decide how badly you need this particular person. Candidates may be asking for a higher salary than what you offered. In this case, you need to consider how much time and effort a new search will take. You can solve this problem in three ways: make a counteroffer to candidates, agree to their terms, or insist on your own. When making a decision, it is vital to consider the value they can bring to the campaign, as well as the presence in the labour market of other candidates with similar skills.
  2. Define your ceiling. Analyse the already existing salary level in your company for a particular position. By hiring a talented candidate with a higher salary, you risk losing existing employees if they find out that a new employee earns more in a similar position.
  3. Think over non-cash compensation. If you cannot pay salaries at the request of candidates, consider reviewing other parts of the compensation package. If such a package is attractive to candidates, they may agree to a similar apparent wage compromise. Professional development opportunities and benefits can be as appealing to potential employees as high pay.
  4. Work on when to walk away. If candidates are difficult to contact or are noncommittal, chances are they are waiting for other offers besides yours, keeping you in reserve. At the same time, if you are still confident in selecting these candidates and their value to your company, tactfully try to find out why they are hesitant. If the candidates are playing some kind of game, thank them for their time and move on to find the right employee.

Helpful tips for negotiating salary with candidates

The modern job market is full of talented candidates and attractive job openings. Interviewing a potential candidate and a good salary offer and working conditions are the main keys to understanding that the company employs the best talent.

The right compensation package helps employers hire and, last but not least, retain valuable employees in the long run. According to research, 19% of recruiters say that salary negotiation can positively impact the hiring process. But this process consists of many key points that every employer needs to consider.

Here are some tips on properly negotiating salary with a potential employee.

The manager must know the law

In some Canadian provinces, asking candidates about their previous salaries or how much they earn at their current job is illegal. However, it is essential to ensure that candidates’ expectations align with the salary range for a particular position.

Luckily, this information is now widely available, and numerous platforms track the tendencies even for the most fast-developing career spheres.

Set salary ranges

Employers should ensure they have upper and lower pay limits for each position for which new employees will be hired. The salary floor must be aligned with industry standards and attractive to potential candidates. This will help guide your approach to salary negotiations.

You can easily find industry standards for wages in government resources such as the Bureau of Labor Statistics or on private websites. Employers should understand that the candidate will use such resources to determine their working conditions requirements and to negotiate salary.

Discuss the numbers at the beginning of the negotiation process

A job offer should never precede salary or reward negotiations with candidates. This conversation should be present throughout the hiring process. This will help prevent diving deep into the interview process before both parties realise that expectations don’t match.

In every conversation with a candidate, whether by phone or in person, it is worth mentioning the company’s expectations so that the potential employee can make accurate estimations and accept or decline the job offer appropriately while there is still time.

Consult salary details

It is worth ensuring that the company offers a sufficient salary to attract and retain good talent. If the company has been operating for more than a year, the employer already knows what salaries are paid to employees.

But what is the salary of each position in the labour market? The more managers know, the better they can balance the company’s budget for employee salaries with market data.

Be transparent, but not to the detriment of the company

When accepting a job offer, candidates need to understand what they are worth to the company and how they can take it relatively to the company and more than fair to themselves. Managers need to meet the demands of candidates and stay within the company’s financial constraints.

Be sure to ask what the candidate is looking for in terms of financial rewards. This question will avoid uncertainty in the future. Often candidates give a clear answer to this question.

Beware of discrimination

Managers should be careful when negotiating wages because employees will receive unequal pay. For example, in the United States, women earn 84% of what men earn in the same position. This can be explained by women feeling less comfortable in negotiations.

The manager makes an offer to the women, which they hastily accept, ending the salary negotiations. But it will eventually happen if you offer the same salary to men, and they negotiate for a higher salary. This needs to be solved. If such situations continue to occur time after time, then men in the company will receive higher salaries than women in similar positions.

It is worth remembering that managers must pay comparable wages to men and women.

Put people first and numbers second

Managers should consider candidates’ wishes and needs within reason, even before salary negotiations begin. You must understand what is essential for each candidate – vacation, flexibility, compensation, and health benefits.

Creating a compensation package that will make the employer feel good and the candidate is vital. This approach gives managers the understanding that for candidates, in the first place, only money or there are other essential things.

Coordinate a trial run with the candidate

Employers may find themselves in a situation where, for example, a candidate asks for a salary of $90,000, but the budget for this vacancy in the company is at most $85,000. In this case, it is worth assigning a trial period to candidates, after which it will be possible to evaluate employees’ effectiveness and decide whether they deserve a higher salary. Typically, the trial period can be from 3 to 6 months. This is enough for employers to assess the attitude of employees to work and their technical skills. It will also allow candidates to try the job and managers to understand whether it is worth paying more.

Additional financial compensation

Attractive offers for potential employees without compromising the company and base salary often include bonuses for performance, company shares that accumulate at different stages of work, 401(k) plans and other benefits.

According to research, about 70% of managers agree that candidates should discuss their salaries and benefits. So that candidates can appreciate the full value of the compensation package, they should voice these options in the early stages of salary negotiations.

It is also crucial to give candidates time to consider the offer from employers. Candidates should be allowed to ask questions and revise the proposal if necessary.

Watch out for rejections

Candidates will not have negative feedback on offers from the company if the managers have done all their work correctly. By setting its expectations, the company receives feedback from candidates throughout the process. But if the candidates refuse the offer, the employer must find out why. This information is crucial for correcting further work with candidates and the company’s job offer.


Who actually decides the salary?

The salary range is always set by employers. By analysing the labour market, they set the maximum and minimum amount for a particular position that candidates and employees will accept.

Does a salary negotiation occur only at the initial hire?

No, salary negotiations may take place throughout your working relationship with employees. They may ask for a review of their pay based on their performance over time or the company’s growth, which may allow for higher pay for team members.

When is the salary non-negotiable?

Don’t start negotiating a salary before getting an employer’s firm offer. You also can rely on something other than internet ratings if one company has more to offer than another. You don’t have to focus on money at all. When choosing a job, paying attention to other factors, such as the type of position or location, is essential.

How many times should you make a counteroffer?

Before negotiating, you should define your salary expectations. Consider how much experience you have in this position and your skills. Repeatedly resisting an employer’s salary offer is not a good approach.


There should be no surprises at the end regarding a job offer to a candidate based on the results of interviews. The salary level should be negotiated with the potential employee, keeping the entire negotiation process as transparent as possible. When hiring, managers need to understand candidates’ salary expectations before they offer them a job at the company. Having studied all aspects of salary negotiation, each employer can easily understand for the first time what is necessary for applicants and their requirements for compiling a compensation package.

About the Author

Tania Doshko is a motivated and avid content creator who believes in the power of quality writing for business success. She finds her inspiration in careful observations and amazement with the fastly developing world.

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