Salary Negotiation

A competitive job market filled with innovative candidates means it’s crucial to conduct interviews and make good offers and salary negotiations on a regular basis if you want to make sure you hire the right people. To attract (and keep!) talent both long-term and permanently, the right compensation package is essential, but there are a lot of factors involved. 

Table of contents

  • Know the law
  • Discuss numbers
  • Consider publishing a salary range
  • Consult salary data
  • Consider a trial run
  • Add bonuses and commissions
  • Salary negotiation template

Know the law #

Depending on the country and province, there are some cases where it is illegal for employers to inquire about a candidate’s salary history, or what they are earning now. The management should ask candidates what their salary expectations are, and ensure that these expectations align with the salary range for the position, particularly in a country such as Canada where it is not legal to ask candidates about their salary history.

Discuss numbers #

In the early stages of the process, it is important to discuss numbers. Regardless of whether you are making an offer or not, it shouldn’t be the first time you discuss numbers and compensation with a candidate. It is important that you discuss this matter at some level throughout the entire recruitment process so that you do not get too far into a process before you realize that your expectations are not in line with reality.

Consider publishing a salary range #

For some jobs, it may be a lot easier to just publish the salary range upfront, rather than to give a specific salary range for each step of the process. People who won’t be able to meet the salary range will not apply, which will save you both a lot of time and effort.

However, there is another downside to this system. It will attract applicants who aren’t fully qualified but who want to get the salary you’re offering and who are willing to apply. However, you might find those applicants who aren’t entirely qualified won’t ever make it to the final interviews.

Consult salary data #

In case you have a job at your company already, you already know what your salary is there. But what do you think the job is worth on the market? If you have a better understanding of the market and the budget you have for the job, you’ll be better able to balance it. And make sure you’re offering enough to attract and keep qualified candidates.

Consider a trial run #

It is possible that you could be in a position where a candidate asks for, say, $100,000, and you think they are a great find. However, you do not want to pay more than $85,000 for them. Often, companies offer a lower salary to a candidate as a trial run, with the promise of a performance review after a certain period of time to determine if they are worth it.

Add bonuses and commissions #

A bonus structure or a commission structure gives you a bit more flexibility to adjust a candidate’s salary if they have earned it, or if their base salary cannot be changed, while still maintaining their base salary within a certain range if their salary numbers are not tweakable.

It’s up to you whether you receive it, but it’s a way for employers to say to employees, ‘Hey, I’m willing to give you a little bit more money if you work hard here and perform well,'” our HR director says. “It’s a way for employees to respond by saying, “Well, I’m willing to pay you more if you work hard here.”

Furthermore, you have the option of negotiating the frequency with which bonuses or commissions will be paid. For instance, a company may pay bonuses or commissions quarterly, semi-annually, or annually, depending on its business model.

Salary negotiation template #

Email subject line: RE: Job Offer from [Company Name]

Dear [Candidate Name],

We are pleased you’re considering our job offer for the [Job Title] position. We’ve discussed your requests with the Head of [e.g., Customer Service] department and our Finance team, and we’ve decided to extend our initial offer with:

  • A [e.g., 4.5%] increase in the annual compensation to a new [mention the new salary] salary
  • A signing bonus of $[X]
  • Flexibility to work from home three days/week or commute reimbursement
  • Company stock options
  • Re-negotiation of compensation and benefits package after an early performance review [e.g., four months after start date]

Please consider the above offer and reply by [Date]. In the meantime, if you have any questions, feel free to contact me at [provide contact details].

We look forward to hearing from you.

Best regards,

[Your name]


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