How Employers Can Successfully Negotiate Salary With the Best Talent

While salary negotiation is always a daunting task for candidates, this doesn’t mean that employers can do whatever they want during this important discussion. Just like candidates, employers and their HR professionals also need to prepare for a salary negotiation. As the job market continues to see fierce competition for talent, the right salary might just be the difference between gaining a new hire and restarting the talent search.

According to Jobstreet’s Future of Recruitment report, financial compensation – which includes salary and bonuses – is the top deal breaker for Singaporeans when considering a job offer. In Singapore, companies continue to employ salary-related strategies to help entice candidates to their firms. Data from the Singapore Business Federation found that more than half of businesses in Singapore (67 per cent) plan to increase wages over the next 12 months. There is also a growing trend in pay transparency among Singapore job listings.

These trends go to show that salary is still very much an important part of the job recruitment process. Employers would do well to prepare for salary negotiations to ensure they can hire the right talent for their team.

With today’s tight job market, every candidate might have several job opportunities to consider. By offering a competitive salary, the employer is showing the candidate that they are valued as vital additions to the team.

Negotiating salary can also give further insight into the candidate. By asking the right questions during the discussion, an employer can find out what the candidate expects from the company in terms of compensation. This can help both parties manage expectations in the long run.

Do the reading. To know what a competitive salary looks like, you have to check out the competition. The JobStreet Salary Report 2022 has a comprehensive look at salary information in Singapore, categorised by industry, specialisation, and position level. Once you have an idea of what the industry standard is, you can better understand whether your company’s offer is reasonable or not.

Assess the candidate. Is this individual your top choice or are you considering other options? What are their financial needs, i.e., transportation expenses, cost of living expenses, etc.? How valuable is their skillset to your firm? How much experience do they have in this role? These kinds of questions can help you figure out the salary range you want to offer, especially the ceiling you want to set to avoid offering too high a value.

Consider non-cash compensation. Candidates consider factors other than financial benefits when deciding to accept a job offer. Offering employee benefits such as flexible working hours, childcare assistance, and learning and development programmes can go a long way in boosting workforce morale and making candidates want to join your organisation.Jobstreet’s 2022-2023 Outlook: Hiring, Compensation & Benefits report can help guide you in discerning what would attract candidates the most.

According to our Future of Recruitment report, candidates value honesty, transparency and clarity from an employer. While this applies to the entirety of the recruitment process, this especially rings true during the salary negotiation, a discussion that involves crucial information for both parties.

Evaluate whether the candidate is a good fit for your organisation. Salary discussions start as early as the initial job interview. But before you drop the all-important question, evaluate the candidate if you want to pursue the hiring process with them further. For HR professionals, is this person someone you will endorse for an interview with the hiring manager? If not, it’s best not to ask them about their expected salary. This saves both of you time and effort.

Ask about salary expectations. Once you’ve decided to pursue the hiring process further, ask the candidate: “What’s your expected salary range?” Be transparent with them and let them know whether their range is within your company’s budget. This helps you manage expectations from the very beginning.

Offer the right compensation. Being willing to negotiate doesn’t mean you can lowball the candidate on your first offer. Remember that candidates can easily figure out the industry standard through research and will most probably already have an idea of the salary range for the role. A negative experience with the employer can leave them with the wrong impression of your company and make them less inclined to accept your offer. Offer the right amount, and give yourself some wiggle room in case they decide to negotiate.

Show the full picture. Throughout the recruitment process, make sure you’re showing the candidate a clear understanding of what the job entails. Letting them know what their day-to-day at the office will look like can help inform their salary expectations.

Anticipate the candidate’s responses. While you can never predict what they’ll say, it’s best to be prepared for common outcomes, such as:

• Hearing a number that’s higher than your budget – Best to check with the hiring manager about their ceiling. If you receive an amount higher than what you initially prepared for, is the candidate worth matching the amount or would you look into other candidates?

• “I need time to think about it” – It’s the candidate’s right to take their time in deciding on a job offer. But how much time is your company willing to give? Check on your recruitment timeline and decide how long you can wait before you move to other candidates.

• “Can I renegotiate the offer?” – Candidates might leave the job offer discussion and come back asking for more compensation. Again, check your ceiling to see how much more the company is willing to offer. If you’ve reached the maximum, entice them with the whole package, including the non-cash benefits your organisation offers.

Salary negotiations can be a tricky business. However, it is an important part of the recruitment process that helps you acquire the best talent for your organisation. By being clear and honest with the candidate on salary expectations, you gain their respect and trust while also keeping the conversation straightforward. By doing right by them, the best talent will come to you.

When should you negotiate a salary with a candidate? Salary expectations can be discussed during the initial job interview. But negotiations should happen further down the line when you are ready to make an offer.

What if you can’t meet the candidate’s salary expectations? Check with the hiring manager on their ceiling for the salary offer. If the maximum limit has been reached, consider other forms of compensation (e.g., childcare benefits, flexible work hours, learning and development programmes) that may entice the candidate to join the organisation.

How often should a salary negotiation happen? Salary negotiations aren’t just for potential hires. Employees can also request a raise in their pay. In these cases, consider their performance as well as your company’s financial ability to offer higher pay. Note that salary increases keep morale and employee retention rates high.