How to negotiate wages – recommendations for employers from HR-PRAKTIKAJanuary 29, 2021
How to negotiate high wages with an employer
This article is not about that. And not about how to make the employer be the first to name the number of wages, and then systematically “squeeze out” a lucrative offer.
Thousands of manuals have been written about this, in which, by default, it is assumed that impressionable and incompetent negotiators who are easy to manipulate are “playing” on the employer’s side.
I cannot agree with this, although I cannot say that employers are not at all affected by the tricks and techniques of job seekers. Recommendations for those whose work is related to negotiations with applicants, I think, will be useful.
How to negotiate a salary with an applicant
First of all – honestly, because the Labor Code allows the employee to refuse to continue the employment relationship at any time, while for the employer the failure to fulfill the obligations assumed is unacceptable.
Unsuccessful negotiations, on the one hand, are fraught for the employer with the risk of dismissal of an employee who is dissatisfied with the size of wages, on the other hand, with the risk of taking on overstated obligations.
An employee who felt that he was “bent” during the negotiation of wages will not give up the dream of reciprocating the employer.
Blackmailing by dismissal and demanding a revision of wages at the most inconvenient moments for the employer is the easiest way to “recoup”.
This is why negotiating wages is a difficult and demanding task that must be solved by trained employees.
To understand the basic techniques and techniques of negotiation, it is enough to master the classic book “The Way to Conciliation or Negotiation Without Defeating” by Roger Fisher and William Urey – it contains everything you need to know about negotiations.
Who is the employer in the wage negotiations
Of course, the buyer. It is he who decides how much to pay for the “human resource” needed by his business, he has the ability to choose, compare and make a “purchase” decision.
It is generally accepted that an employer “sells a company to a job seeker”, but this phrase should not be taken literally. The job seeker may not agree to the employer’s offer, so the latter is interested in increasing the attractiveness of the future deal. But, again, the payer – the one who pays for the work – is the employer.
From this, it follows that he is the leading negotiator and has every right to be the first to ask the applicant the question “How much do you assess your qualifications?” and wait for a response. The phrase may be different – I like to ask this question like this.
How to determine the optimal salary for a position
It is up to the employer. Prepare your offer and enter the labor market with it. The degree of its attractiveness will determine the activity of applicants and the results of employee selection.
If you are ready to bargain, choosing the best value for money, then it is worth learning how to evaluate the competitiveness of the proposal and the market value of the applicant.
As Fischer and Urey, the authors of the method of principled negotiations, write, a fair proposal would be a proposal, in the development of which objective criteria were used.
It is unlikely that the job seeker with whom you are negotiating wages will challenge the objectivity of the realities of the labor market if you are willing to refer to it when justifying your proposal.
How to negotiate when bargaining is inappropriate
If you have already determined the exact amount you are willing to pay, indicate it in the hiring announcement or name it when you invite the applicant for an interview.
It is not uncommon for a job seeker who responded to your job ad with a specified salary to agree to an interview to impress us in person, in the hope that you will agree to his requirements, even though they are obviously higher in the amount declaration.
You need to take this calmly and once again announce the amount that is provided for this position. If the applicant is really interested in your proposal, there is a chance that he will agree, if not – you just have to thank him for the time spent on the interview.
If the applicant, who indicated in his resume the amount exceeding your offer, nevertheless expresses his readiness to accept it, be sure to specify whether it really suits him and whether there is an understanding that the offer is final and will not be revised.
To minimize dissatisfaction with the failed bargaining, you can explain to the applicant that the proposed salary is determined by the company according to its rules – see 10 ways to decide how much to pay an employee.
This will save the applicant from the unpleasant thoughts that they refused to negotiate with him due to underestimation of his experience and qualifications.
How to negotiate wages if you are willing to bargain
Publish a hiring ad without specifying a salary, or with a “vague” range, such as “from”, “to” or a fixed amount, the calculation of which will be discussed.
Determine for yourself the maximum amount of salary that you are willing to offer the applicant. You are inviting applicants for interviews whose salary, indicated in the resume, does not exceed the maximum specified by you.
For applicants who did not indicate the expected amount of remuneration in their resume, find out their expectations regarding the desired amount of salary. To do this, by phone or by correspondence, ask the question “How much do you assess your qualifications?”.
If you are asked a question about the amount of salary by phone or in correspondence, you answer that you are ready to discuss the amount of salary indicated in your resume, if it does not exceed your limit. During the interview, if the applicant is interesting, do not hesitate to repeat the question of how much he estimates his qualifications.
If the applicant claims that the size of his expectations depends on the content and volume of work – provide him with all the necessary information. If the applicant insistently requires you to voice your offer first, patiently explain that you are a representative of the company in the labor market, and your task is to choose the best value for money.
And that without receiving information about the “price”, you will not be able to submit a candidate for the next stages of selection. As a rule, such arguments are enough for the applicant to name the desired amount.
How to make an offer to the applicant
Evaluate offers from other employers, assess the market value of an employee, determine how attractive the candidate you want to make an offer to for you, formulate an offer, prepare arguments for justification.
It’s up to you to decide who is more profitable to hire – an applicant who meets requirements A and B for 500 dollars, or an applicant who meets requirements A, B, C, D for 1000 dollars.
It’s up to you to decide what your proposal should be if applicants who meet the requirements of A, B, C, D are offered no more than 800 dollars in the labor market, and the one that you like asks for 1000 dollars.
Probably, it is worth offering 800 dollars, justifying your proposal by comparing it with the proposals of other employers and assessing the employee’s market value.
For example, referring to the fact that 1000 dollars on the labor market are offered to those who also meet the E and F requirements, which your application cannot boast of.
No one bothers you to ask the applicant to express their views on your proposal and counter-arguments to substantiate your expectations or say they are not.
Regardless of the outcome of the negotiations, you cannot be accused of incorrectly conducting them – you justify your proposal and express your readiness to listen to the arguments of the other side.
The likelihood of satisfaction of the parties from the transaction and the perception of it as fair will be much higher if the offer is reasoned than if you rigidly announce the amount that will be less than expected by the applicant by -15-20%.
If a proposal is harshly and unreasonably voiced, which is significantly lower than the expectations stated by the applicant, he can refuse it only because he considers consent to be a “loss of face”.
Or agree with the hope of revenge. The main principle in negotiating wages is the validity of your proposal and the willingness to consider the arguments of the other party.
What else is worth discussing during wage negotiations
The size of its permanent part can be less or more than the one that is set after it ends. In the latter case, the total amount of wages can be maintained or increased due to the variable part.
Terms of resumption of salary negotiations based on performance
If you have come to an agreement on the amount of salary, but the applicant is ready to prove by deed that he deserves more, you can agree on a period after which you agree to resume negotiations.
If you are not ready to formulate the criteria for evaluating the work of an employee for calculating the variable part of the remuneration, determine the period within which you will agree.
Deadline for accepting an already formulated proposal
Always give the applicant time to think about your offer and take time out to consider the applicant’s counteroffers.
Mutual concerns and risks
It’s no secret that some job seekers seek to get an offer not to change jobs but to safely demand an increase in wages at their current place of work.
If you have such suspicions, it is worth asking a question to the applicant – will it happen that, having accepted your offer, the applicant will receive a salary increase at his place of work and change his mind about quitting.