Unlock the Secret to a Strategic Salary Offer

Two people are negotiating a salary offer after an informal interview in a cafe

By Rod McMillan

Finding the right candidate is just the beginning; the real magic happens during salary negotiations. Today’s job seekers come to the table well-prepared and with clear expectations about their pay. Here’s your guide to crafting offers that fit your budget and match what your candidates are looking for.

Conduct Thorough Market Research

Make sure you do your homework on the market rates for the job. It’s outdated (and not cool) to base your offers on what a candidate earned before. It’s not yet illegal to ask about past salaries, but it’s definitely not best practice. Instead, focus on understanding the role’s market value. Utilise tools like the Office for National Statistics (ONS) or to gather data on average salaries for similar roles in your area and industry. Remember your hiring competitors are not always your commercial competitors.

Open With a Competitive Salary Offer

Starting the negotiation with a fair offer shows respect for the candidate and sets a positive tone for your working relationship. For instance, if the salary band for a role is £35,000 to £45,000, starting at £35,000 may seem prudent …but offering something in the middle of the range is far more effective. This approach shows the candidate that you value their potential contribution and leaves room for negotiation without straining your budget.

Establish Clear Salary Ranges

When setting salary ranges, make sure they’re based on solid research and reflect the experience and skills needed for the role and how similar positions are paid within your company. Here’s what to think about:

Internal Alignment: Check that your offer matches what others in similar roles are earning. It’s all about fairness.
Flexibility: Be ready to stretch that salary range for candidates who bring something extra to the table.
Market Value: You’ll probably need to go above the average salary to draw in the best talent and make your company shine. If your pay isn’t up to scratch, you won’t just have a hard time hiring; keeping your current team could become a struggle, too.

Whatever you do, don’t set salary expectations high in the job advert and then pitch low. You’ll quickly lose the best candidates, and hurt your employer brand.

Look Beyond the Basic Salary

When discussing salary, it’s crucial to consider the entire compensation package, not just the wage itself. Candidates place significant importance on the full range of benefits, and clearly outlining these can make your job offer far more attractive. Here’s how you can effectively highlight the total compensation:

Detail the Benefits: Clearly explain what’s included beyond the basic salary—things like bonuses, pension contributions, health and life insurance, and any performance-related incentives. Providing specific figures or percentages can give candidates a precise idea of their potential earnings and security.
Highlight Work-Life Balance: Be sure to promote flexible working options such as remote working, flexi-time, and generous paid leave policies. These are major selling points for candidates looking for a better balance between their personal and professional lives.
Professional Development: Point out how your company supports career advancement. This could be through funding for training courses, opportunities to attend industry conferences, or clear paths to promotion. Demonstrating that you invest in your employees’ futures can make your offer stand out.
Unique Perks: Shout out abouyt any distinctive perks that set your company apart, like gym memberships, wellness programmes, company cars, or even smaller benefits like free lunches and office snacks. These little extras can be cliched but might also be just the thing a candidate needs to tip the scales in favour of your offer. Rememeber a ping-pong table and beanbags is no replacement proper pay, but may add a cherry to the cake.
Long-Term Incentives: For roles designed to attract candidates with a long-term view, discuss options like equity stakes or long-term incentive plans. These can be particularly persuasive by linking a candidate’s financial goals with the success of the company.

Be Firm, but Fair

Salary negotiation is not just about bagging a new hire; it’s also about setting up long-term job satisfaction. A Chartered Institute of Personnel and Development (CIPD) survey found that competitive compensation is crucial in retaining employees and reducing turnover.

Negotiating salaries isn’t just something you do when someone first joins. It’s super important to keep those talks going. As your team grows and tackles more responsibilities, revisit and adjust their pay regularly. This isn’t just about making everyone happy—it’s about keeping them motivated and fully committed to our goals.

Effective salary negotiation is critical to both attracting and retaining top talent. Conduct thorough market research. Start with a competitive offer. Clearly communicate the total compensation package. You can make compelling offers that attract standout candidates.

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