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Insider Tips from HR Experts on Mastering the Art of Negotiation

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Salary negotiations may seem like a budget item for companies, but for employees they can be a life-changing conversation. For this reason, HR managers need to know how to properly approach this discussion. Not only do employees feel cared for and respected, but the company can still meet its goals and financial obligations.

The question is not whether employees will negotiate their salary, but when. A Pay Scale survey found that 37% of employees have asked for a raise from their current employer. Another 42% of job candidates have asked for a higher salary when negotiating a job offer.

So how can you approach these conversations in a way that is both compassionate and pragmatic? What can you do to retain employees who want a raise if the answer is no? And how can you successfully negotiate salary as an employee?

Here are 10 salary negotiation tips that every HR manager and employee should know.

1. Practice your salary negotiation speech

Whether you're starting a new job or seeking a promotion, you should have a basic salary negotiation script in mind.

Too much depends on your speech, so you shouldn't give it extemporaneously. Instead, find a friend or mentor who would be willing to practice your speech with you. Then practice your "script" a few times until you're confident in what you want to say. After all, practice makes perfect.

While there's no guarantee that the interview will go exactly as you planned, having a rough idea will help you feel confident and convincing during the actual salary negotiation.

2. Be honest and transparent

Many employees do not know how their salary compares to that of their colleagues. This can make them reluctant to ask for changes, and many find it easier to simply change jobs. In 2021, 63 percent of workers said they left their jobs because of low pay.

But salary is not the be-all and end-all for retaining employees. Even if a salary negotiation with a current employee or applicant doesn't meet their salary expectations, you can address many of the reasons an employee wants to leave.

Explaining the “why” behind your decision can help employees feel heard and respected. The salary range depends on the role and its responsibilities, not the person performing it. Be transparent - let employees know what you have researched in the market and why you chose a certain number.

A successful negotiation illustrates what both sides have to offer in the context of the local labor market. For employees, this means they need to research the salary data for the job they want to get an honest idea of what they can expect. Then be prepared to justify the numbers you mention based on your skills and core competencies. This will give you more leverage in salary negotiations.

3. Negotiate salary with the right attitude

When you know your worth, you can change your frame of reference and view negotiations not as a win-lose situation but as a win-win situation. Negotiating doesn't mean arguing, it means communicating your needs to get what you deserve. Good employers want to pay you what you deserve in order to retain you long-term, so they need to know what you expect.

If you have an aversion to conflict that makes negotiation seem unnatural, understanding a job offer as an ongoing exchange may help you familiarize yourself with the mechanics and best practices of negotiation. If done right, your salary negotiation will lead to a future where your work contributes to the company's growth and your contribution results in increased compensation.

4. Ask targeted questions

The goal of a successful salary negotiation is to clarify expectations so that the employee or applicant can make an informed decision. Transparency on your part is important, but you also need information from them to fully prepare for their future employment.

Below are some areas to research in preparation for salary negotiations so you can avoid misunderstandings before they arise:

  • Job title and description: Make sure your job titles and descriptions are aligned with the applicant pool.
  • Applicant background and expectations: Consider where applicants are coming from - do they expect an exceptionally high salary compared to what you are offering?
  • Employee Needs and Values: Understand what is important to your current employees and what they value. Employee satisfaction surveys help you adjust your compensation so that it moves in the same direction as your employees.
  • Why people leave: Learn from your exit interviews. Ask about the reasons for the termination, what offer convinced them, and how you can improve your workplace for future employees.

From an employee's perspective, the way you behave and present yourself during salary negotiations is crucial to how well the conversation goes. Before the interview, research the company and the person you are meeting with. Then, during the negotiation, make sure you address the following topics:

  • Your manager's expectations and a clear understanding of the job requirements
  • What tasks and responsibilities you will have
  • How you will fit into the team
  • How success is measured - both quantitative and qualitative metrics
  • What long-term goals the company has, what steps are needed to achieve them and how you can contribute

5. Negotiate salary in the right environment

Digital interviews are a relatively new aspect of being effective in salary negotiations. What you wear still matters (at least from the waist up), but your screen surroundings also matter.

Try to avoid common virtual pitfalls by making sure you're in a room where you can put your best foot forward - find an area free of noise and distractions so you can focus on the conversation and can ask interesting questions. Finally, make sure your background is presentable and professional. Your space doesn't have to impress you, it just shouldn't be distracting.

6. Be tough but flexible

It's important that you prepare for the trial, but there's not much you can do in advance. Therefore, you should have a salary range in mind rather than a single number.

This helps you in two ways:

1. It sets your floor. If the offer is below your lower limit, the position may not be right for you. It gives you the freedom to set a firm limit on your worth.

2. A range gives you flexibility. The person making the final decision wants you to be happy, so a range allows both sides to tweak the numbers until a compromise is reached.

7. Think about the whole package

Sometimes a salary negotiation doesn't necessarily have to result in a higher salary. Companies have a lot of influence over their overall compensation package, and there are creative ways to tailor compensation to keep employees happy. Having a comprehensive compensation strategy before negotiating salary with employees or applicants will help you streamline these conversations and keep your employees happy.

Here are some things that should be offered as part of a valuable total compensation package:

  • Flexible PTO options or additional PTO days
  • Flexible working hours
  • Remote work or hybrid forms of work
  • Moving packages
  • Benefits for commuters
  • Health and wellness services
  • Subsidies for tuition fees or further training measures
  • Support in looking after children or relatives

To develop a valuable compensation strategy, you need to know what is important to your employees. Not every benefit is important to every employee, but you can tailor the package and your approach to employee preferences. Once you understand your employees' needs, you can communicate the value of your overall compensation package to both current employees and potential applicants, whether they demand a higher salary or not.

For employees, compensation includes more than what goes into the bank, so ask about the full benefits package for the position. Again, there may be a strict salary budget, but the hiring team wants to do everything they can to keep you! Human Resources supports them by developing programs and benefits tailored to employees' specific needs, helping their company stay ahead in the competition for talent.

If you're attracted to a company but aren't sure what your salary will be, there are a few programs you can inquire about:

  • Reimbursement of tuition fees
  • Training, professional development and certifications
  • Mentoring and coaching
  • childcare
  • health and fitness
  • Scheduling and work flexibility (e.g., remote and hybrid work arrangements, early or late shifts, and compressed workweeks)

8. Understand your limitations

Some employees or applicants may decide to leave the company. That's okay, because if their employment with you doesn't meet their needs, it will be difficult to keep them engaged and motivated. But the decision to break up doesn't have to mean the end of the conversation. You can work out the details to minimize resentment and leave the door open for a potential boomerang employee.

The departure of an employee is the right time to initiate the ideal transition for your company and agree on the length of the notice period. For hard-to-replace employees, this could include a one-time bonus to keep them around for an extra month or two while you find and train a replacement. Ultimately, however, the employee has the final say on when to leave.

Don't be pushy. Persuading someone to accept an offer they are not happy with will not result in a positive long-term solution for the company or the employee. Employees don't just want money now, they want a career that promises them more in the future. Short-term successes, such as Bailiffs, such as paying too much for a valued employee or applicant, can cause long-term damaging problems for your company. These include employee dissatisfaction, issues with unfair pay, and difficulty maintaining above-market salaries.

If you've done your research, know the value of the entire compensation package, and know what's important to your employees, you'll know you've done everything in your power to retain the employee. Knowing where to draw the line when negotiating salary will help you offer competitive retention options while keeping the company's overall goals in mind.

9. Keep the “human” in HR

One of the most important steps to ensuring employees feel heard and respected during a salary negotiation is to continue to act like a human being. Be honest, open and empathetic when discussing salary. Applying the ideas from the previous tips will ensure that the employee knows that you respect them as an individual rather than seeing them as an interchangeable cog in the machine. Pair your words with a consistent employee experience to make this clear.

Even if employees and applicants don't receive the higher salary or decide against a job offer, they will remember how your company handled the interview. Humanity can mean the difference between an employee returning to work or leaving, between a candidate choosing your company and similar options, or between scathing and glowing reviews from former candidates and employees.

10. Use HR software for salary negotiations

As with any job you want to excel at, you need the right tools to be successful. A good HRIS tool can make a big difference in salary negotiations. You need a tool that contains the necessary information and data so that you are better prepared for salary discussions, e.g.

  • Mood of the employees
  • Compensation and career history
  • Employee demographics

Gathering all of this information in one place allows you to sit down with employees and guide the conversation with empathy while the data supports you.

In conclusion, mastering the art of salary negotiations involves a blend of courtesy, punctuality, and a positive attitude. By implementing these tips and approaching negotiations as a collaborative effort with IceHrm's support, you'll boost your confidence and work towards achieving mutually beneficial outcomes in your career journey.

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