The Negotiation Norm
The negotiation stage is unarguably one of the most important parts of the application process. As the employer, you want to be careful not to overspend or cause rifts within the existing team by paying too much. From the candidate’s perspective, you want the best deal possible and to be paid well for the value you provide. This can cause challenges for both sides and in my opinion, so many companies out there could be doing this way better.
Just imagine it from a candidate perspective for a second. You apply for your dream role. The company’s great, location is easy and the role sounds perfect. You clearly state your desired salary at the start of the process (for the purpose of this example, let’s say 65-70K) and the company invites you for an interview. You nail it, spend hours on the subsequent technical assignment and that gets the nod of approval. Finally, you get to the last stage and the company decides to make you an offer. You’ve been building up to this moment for weeks, remembering the role ticks all your boxes, and then the offer comes through.
It is 64K. Yes, it’s only 1k less than the minimum but as a candidate you were hoping for more, after all you did say 65-70K!
Why managing expectations is so important
How is the candidate feeling at this moment?
In one word, deflated. Their balloon of excitement has been well and truly popped. Remember, the decision for any candidate to apply for a new job is mainly logical. But as the process nears its end, emotions have a much greater part to play. The candidate in this example has gone from sheer excitement at the start of the process to now feeling like they’ve been short-changed at the final moment.
On top of this, they now face a tough decision; do they begrudgingly accept the offer or face the awkwardness of negotiating and the risk of losing their dream role? There’s a chance they may feel anger towards the company after they felt they were clear from the beginning when it came to salary demands.
Even if the rest of the application process has been amazing, as humans, we’re way more likely to remember how we feel at the end of an experience rather than the start (immediately after a roller-coaster ride, you remember the feeling of elation at the end, not the nervousness beforehand).
This means that by negotiating at the end of the process, the company has turned an enthusiastic candidate into someone feeling disgruntled.
Whether the candidate takes the offer in this example or not isn’t the point, your aim as a company in hiring mode is to have candidates finishing your interview’s feeling that was the best application process ever and if possible, loving the company (even more) come the end.
So how do you achieve this and be able to negotiate?
There is a better way
The two key factors when it comes to managing the negotiation phase are managing each others expectations early on in the process and not hitting anyone with a nasty surprise right at the end!
Some ideas to prevent this include:
- Have clear salary brackets for each role and communicate these to the candidate right at the start of the process. If the candidate is asking more than your company structure allows, discuss it now, not later.
- Create opportunities to discuss salary expectations at different parts of the application process. Once you’ve completed the first interview, if the candidate’s knowledge & experience isn’t adequate for their salary demands within your company structure, have that conversation. Again, it stops any nasty surprises later down the line and a good candidate will appreciate the honesty now rather than wasting hours of their time only to disappoint at the end. //Another great opportunity is after technical assignment stage.
- Employ fairness within your negotiating phase. If a candidate has been clear from the start with their salary expectations, these demands are doable within the current pay structure and their interview process backs-up these demands, don’t try and low ball that person at the end of the process just to save a couple of thousand for the hiring budget. Yes, you’ve made a short term saving, but for what in return? //The candidate might now not even take your offer (think of all the time wasted) or does but now has a bad taste in their mouth. //Are they now spreading the word when it comes to your brand or telling all their friends (who could now be potential hiring targets) how crap it was that they had to come down on salary? That 2k saving could come back to bite!
In Summary
- Have a clear salary structure for each vacancy and know what a candidate needs to achieve within that banding to achieve their desired salary – make sure this is communicated to the candidate early on!
- Don’t leave salary negotiation to the end of the process – instead have the conversation throughout the process so that everyone knows where they stand and expectations are managed.
- Don’t try and low ball candidates at the eleventh hour just to save a few Euros! It could cost you a lot more in the long run!