Determining the compensation package for new hires is important, as it will often determine whether or not they choose to remain with your company. A great deal of effort goes into finding and interviewing qualified candidates, but if the compensation package isn’t up to par it could become largely a waste of effort and time. Conversations involving money are always delicate matters, below are some tips to help you do it the right way.
Confirm the Scarcity of Talent or Demand for the Position
Your goal as an employer is to provide new hires with salaries that are attractive while remaining within the company budget. Doing this requires you to do your homework on prospective candidates and the position you’re hiring them for. If the talent needed for the particular job you want to fill is rare and highly competitive, then you should expect to pay the new hire more than usual. Alternatives to higher hourly pay could include stock grands or lucrative sign up bonuses.
Know the Market and Going Rate for the Position You Wish to Fill
Knowing the market and average going rate for the position you want to fill will put you in a stronger negotiating position when corresponding with new hires. You will be able to determine if the asking price is too much, and you’ll be able to negotiate a salary which is desirable for both parties. As an employer you don’t want to overpay or underpay a new hire, but they should be offered a compensation package which is attractive.
Consider Offering Variable Pay
A growing number of businesses are providing new hires with variable pay. It is commonly seen in jobs which are non-management related, and will typically be driven by performance. In other words, new hires that go above what is expected of them will earn additional pay on top of their base earnings. However, should you opt for this solution it is important to keep abreast of your industry to make sure your variable payment plan is competitive.
Make Sure Your Timing is Impeccable
Employers who negotiate the best salaries for new hires and themselves often have a keen knack for timing. They understand that making an offer at the proper time will influence the attractiveness of their salary package. For example, enterprises which have an incentive or merit system that is determined by a specific anniversary date with cut offs for eligibility criteria present opportunities for new hires to join before the deadline.
Most new hires that recognize an opportunity to receive a pay increase could be enticed to accept the offer. Oftentimes this will function as an incentive for new hires to follow and provide them with the spark to work diligently and demonstrate to their managers that they hired the right people. The company should be open about the eligibility details for the compensation package so that management can attract superior talent. As you can see, there is a great deal of finesse that is required for the successful negotiation of new hire salaries.