Minnesota is a job candidate’s market, and it’s been that way for the past few years. In fact, the state’s current 3.1 percent unemployment rate hasn’t been this low since July 2000. Good news for job seekers is bad news for business owners and managers, who know all too well how difficult it is to fill open positions — especially in the growth areas of IT, finance and healthcare.
Today’s employers must make an extra effort to woo job candidates and that includes negotiating salaries. But the compensation conversation requires delicate skills. At this stage in the hiring process, you’ve already invested a significant amount of time sifting through applications and interviewing short-listed candidates. You don’t want your top pick to get away, yet you also can’t blow your budget. Meanwhile, job seekers may not settle for the first salary figure you present them.
A recent Robert Half survey of U.S. workers found that among respondents in Minneapolis, 26 percent asked for a higher starting salary. Are you prepared to have this conversation with job finalists? If not, you need to be ready. Here are five tips for winning the salary-negotiation game:
Be as prepared as your interviewee. Most of your top candidates will have thoroughly looked into your company and its workplace culture. They will also have the most recent compensation ranges for an organization of your size. You should have the same salary data. Before you even post the position, have a good understanding of the going rates for that job title. Use resources such as the Robert Half 2018 Salary Guides to find out what you’re expected to offer if you want to entice top talent. Our Salary Calculator customizes the results for your Minnesota city. Thorough research into current salaries will help you feel confident that your offer is competitive.
Set a ceiling. Negotiations are all about concessions and compromises so that, at the end, both you and your candidate will have gotten most of what they want. At the same time, you need to establish a hard limit so you don’t risk wrecking your budget. To determine what that salary ceiling should be, ask yourself these questions:
How much financial flexibility do you have when filling this particular role? In other words: Is your budget strict or can it be stretched a bit?
Is this position relatively easy or difficult to fill? Candidates for niche programming jobs are typically harder to come by than, say, entry-level marketing coordinators.
How will a high salary ceiling affect your team? For example, if you offer 15 percent more than you originally planned, how would that impact existing staff’s merit raises?
What sorts of non-recurring incentives could you offer? For instance, could you offer a signing bonus?
Make a strong initial proposal. You may be tempted to lowball the first offer so you’ll have plenty of room to go up, but that may not be your best strategy. Why? Your top choice could be weighing two or more offers — a distinct possibility in this hot job market — and you don’t want to risk alienating the candidate with an insulting salary figure. At the same time, you shouldn’t play your best hand right off the bat.
Skilled workers are confident. They know what their abilities are worth, so consider starting at around the 75th to 85th percentile of the position’s salary ceiling. That way you capture the candidate’s interest while leaving some space to negotiate.
Be candid and firm. Candidates often presume employers have more bargaining room than they actually do. After a round or two of negotiations, be upfront and let them know you simply cannot go any higher. There’s no need to apologize or make excuses for a fair salary. Chances are good that if you’ve gone up from the first number and negotiated in good faith, they’ll accept the compensation package. If they insist on more money than what you can give, it may be time to cut bait and let them go.
Sweeten the deal with perks. If yours is a small or midsize business, you likely can’t afford the sky-high salaries that tech giants and multinational corporations offer. But you can compete in other areas.
Work-life balance, for example, is a major attraction. Employees are drawn to organizations that allow them to juggle professional and personal responsibilities. Candidates may be willing to accept a slightly smaller paycheck in exchange for greater flexibility. Here are some workplace perks that could help you close the deal:
Telecommuting. Allow responsible, self-motivated new hires to work remotely a few days a week. To make the offer even more attractive, reimburse them for the cost of setting up a home office.
Extra paid time off. Throw in a few more vacation days, including time off on their birthday and/or work anniversary.
Flexible scheduling. Allow people to come in early and leave early, or come in late and leave late — whatever works for them, as long as the job gets done.
Alternative scheduling. Whether they use extra hours to pursue hobbies or spend time with the kids, employees appreciate having large chunks of personal time. Let job finalists know you’re open to a 36-hour week, a compressed workweek (four 10-hour days), job sharing or other such arrangements.
The beauty of these non-salary benefits is that, in the scheme of things, they don’t cost much money but are extremely attractive to today’s workforce. While not all jobs are appropriate for telecommuting and flextime (such as those in manufacturing, hospitality, childcare or K-12 education), just like retail, more and more jobs are moving away from the brick-and-mortar model to the online sphere. Employers need to adapt or risk not having enough of the workers they need.
With Minnesota’s incredibly tight job market, employers need to rethink all aspects of hiring — from smarter branding and recruiting to sweeter compensation packages. Master the art of the salary negotiation and you improve your chances of landing the employees you need to grow your business.
