Salary negotiation is done ahead of issuing an offer letter. This is the heart of recruitment and selection process, wherein the actual worth of a right candidate will be evaluated. The remuneration offered should be balanced, acceptable and agreed by both the parties – the employer and the employee.
Some organizations have salary grades, which are already assigned for each and every position, hence the new employee also receives the salary as per the grade for which the candidate is qualified and selected for.
The negotiations should be a win-win situation, where both the candidate and the employer should benefit.
If the candidate expects and demands for a higher salary than the offered salary, then the employer can raise the package (if the budget permits) in the following cases −
Sometimes there is high demand for a skill and the market does not have sufficient supply of qualified candidates to fill the gap. In such cases, the HR team offers lucrative packages in order to attract talented professionals.
Hiring managers, most of the time, have a budget for each position and they are under pressure to hire the right candidates without overshooting their assigned budget.
Hiring managers should keep the following points in mind while negotiating salary with a potential candidate −
Research about the job posting well in advance and have a clear understanding of the demand and supply of skilled professionals in the job market.
Make the candidates understand the break-up of the total package that is offered.
Do not let the candidate know the maximum salary that can be offered.
Do not reject a candidate if his expectations are beyond the budget, rather try to make them understand the fringe benefits that is being offered in the package.
Salary negotiation is extremely important, as it can either make or break a selection. Sometimes, hiring managers tend to go overboard and offer an extraordinary package to attract a right candidate. At other times, a potential candidate rejects the offer because it was not up to his expectation. Hence, it is very important to maintain balance between hiring the right candidates and working within the boundaries of the assigned budget.