How to Successfully Negotiate Salary with a New Hire

It’s no secret that companies are having a hard time hiring talent. In fact, one report found that 52 percent of small businesses are struggling to find qualified people to fill positions. In the age of the so-called Great Resignation, it appears as though employees have the upper hand in today’s job market. 

In other words, don’t be surprised if the next candidate you assess asks you for more money.

Keep reading to learn about what you can do to successfully navigate the salary negotiation process with your next new hire, ensuring you end up with a great new employee who’s happy to be there and feels they are being paid what they’re worth.

Understand their motivation. 

As you begin negotiating with a new hire, it’s important to figure out their motivation behind seeking a higher salary. In today’s job market, it could be because they have higher offers elsewhere. Or maybe they want to see whether there’s more meat on the bone. Are they only interested in negotiating a higher salary? Or might they be enticed by non-monetary benefits, such as additional paid time off or the ability to work remotely?

Use Labels™ and Mirrors™ during the conversation to pinpoint the new hire’s underlying motivation. Once you’ve figured it out, use a Summary™ that encapsulates their entire perspective to the point they can only respond with two magical words: That’s Right™. 

At this point, it’s time to pivot and share what’s on your mind.

Understand what you can give.

Ultimately, as a hiring manager, you need to make sure that your new hire feels that you understand their desires and where they’re coming from. At the same time, you need to recognize your position as a hiring manager and determine what is realistic in terms of compensation.

For example, can you add to the salary you’re offering? If not, can you adjust the commission or offer extra benefits, such as the ability to work remotely?

If you get to this part of the process without knowing what you can do and where you are flexible, the conversation will become much more difficult.

Be as honest as you can.

At the end of the day, you need to be honest with your new hire. The last thing you want is the candidate to feel they’ve been led on with promises of higher salary when you can’t deliver.

If you have no wiggle room from a monetary perspective, you can say something like this: Although we can’t budge on salary, we can look at making this a hybrid position. Many candidates have tunnel vision when it comes to salary, but additional perks can make a huge difference in work-life balance (e.g., remote work). When a candidate is only interested in making money and doesn’t care about other benefits, it may indicate they are not planning to be with your company for the long haul.

Ultimately, honesty is crucial in these situations. If you want to cultivate a strong, long-term working relationship, you need to be honest with candidates about what you can and can’t do. 

Ask a Proof of Life™ question.

At some point during the interview process, the Proof of Life™ question will materialize: With all the companies in the area, why do you want to work here? Depending on the new hire’s response, this could be a good time to insert yourself into the conversation and ask some Calibrated Questions™.  

Here’s an example of how this could play out: Last time we talked, you mentioned reasons you wanted to work with us. Now we’re in a position where it seems like the package we’re offering you is not sufficient. You said all of these great things, and now it’s not good enough. . What’s changed since our last conversation?

Use an Accusation Audit®.

Employees have the upper hand in the job market, and there’s a good chance they might be pursuing multiple opportunities. Using an Accusation Audit® (AA®) can be a great way to get ahead of what your potential new hire is thinking: I imagine this is one of a handful of interviews you’re a part of. You probably have a bunch of offers on your plate and are comparing us against other companies to see which is the best fit. 

Compare this approach with the run-of-the-mill hiring process filled with templated, automated emails that are off-putting. Using an AA can be a great way to differentiate your organization from the pack and prove to the candidate that you understand where they’re coming from.

One last takeaway: Don’t be too rigid going into these conversations; you will have to have flexibility if you want to land top talent.

Strong relationships aren’t built on compromise. To learn more about how to negotiate contracts that work well for all parties, download our free e-book, Never Split the Difference: Negotiating Contracts.