One of the biggest expenses for any business is labour. Business owners have to be frugal when it comes to hiring and employing talented people, but they can’t be considered penny pinchers. If word spreads that your company isn’t willing to pay for the best employees, you risk losing an edge on recruiting. Instead, you can use sound methods for money-saving during those first initial salary negotiations. Here are five ways to help reign in the costs when you and your new employee start talking pay.
- Have a Salary Range Set in Advance
The first thing to do before going to the negotiating table is to have a set salary range already in mind. Talk to your human resources department and other managers to determine what the company can afford. Avoid letting the potential new hire take over the discussion. It’s also helpful to have this range published in the job posting from the start.
- Offer Perks and Other Subsidies
Don’t forget to consider adding additional perks and bonuses to the compensation package. Some companies can save money by curbing in high salaries but adding high-value subsidies to the overall offer. Employers may want to offer perks such as transportation stipends, extra vacation time, flexible hours, bonuses, or stock options. Some of these perks are cheaper for the employer to offer than more salary money.
- Discuss Benefits
When a potential candidate is weighing your offer over another company’s, health insurance, retirement, and other benefits also matter. If your company doesn’t offer a comprehensive health benefits package, that may end up costing you the most talented employees. Companies that have a solid benefits plan can offer less money upfront for salaries. Consider full coverage of health insurance and dental, retirement matching, and other benefits that increase wellness and productivity.
- Research Pay Rates
Another important tip before you get to the negotiating stage is to do research on the position’s pay rate. Use a salary calculator to get some guidance during this step. Get information from your competitors or others in your industry who employ people in the same role. Chances are, your potential new hires may be interviewing with these firms as well. Check out salary levels for the position in different experience ranges and education levels for the most accurate results.
- Be Professional and Upbeat
The last tip to help you get what your company needs during salary negotiations is to simply be professional. If you and your job candidate can’t come to an agreement, move on and make an offer to the next applicant. Sometimes people aren’t on the same wavelength when it comes to value and salary. Maintain a professional and upbeat demeanour during all stages of the negotiation so your company doesn’t end up looking foolish or cheap. This way, you can retain some of that dignity if things don’t work out.
Salary negotiation can end up costing you big time if you don’t go to the table with a cost-saving plan. Check out these tips to help you and your company get closer to a solid number that both you and a new hire will agree to.