Negotiating & Structuring Compensation

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Hello friends.

Now that you have selected a potential candidate, it’s time to talk about how to negotiate the compensation and how can you structure or restructure an offered compensation.

So, there are some steps through which we will now know how to carry out this whole process.

Now, first of all, you need to reassure the candidate that you are on their side. Generally, what happens is candidates become a bit apprehensive about their expectations or what offer they are expecting. And somehow, their general point of view is you may be against them.

Therefore, you need to be open and honest in front of the candidate and reassure them that your top objective is to give them the best possible offer. By doing so, they will be eager to accept the offer and happy to stay in their new role for a long time.

Then, secondly, you need to show the candidate how your company culture will support their life. So, reinstate a few things about your company culture, then talk about the longevity of the employees. You should also emphasize talking about what kind of benefits and flexibility the employees get.

Plus, share about your culture upfront so that the candidate can see the holistic value of your company. Okay.

Then you should do complete research about the market salary. What are the minimum and maximum salaries for that particular role? Identify and keep that so that you can offer a fair salary range to your candidate according to your budget. (Clear?)

Now, you also need to understand what is important for your candidate. Whenever we do interviews, we try to know what is very important for the candidate. What is it that the candidate cares about the most? It can be flexibility to work from home or a hike in the pay salary. It can be anything. Okay.

Well, here you have to see from the candidate's point of view that if you were in the position of the candidate, how would you negotiate with the HR manager. With this, you will know how you can negotiate with the candidate, from a salary point of view and how you can make the candidate feel comfortable. (Got it?)

Now, if you are unable to match the starting salary request of the candidate because of some other reasons, then you can also link that entire deal with benefits. You can say that's okay, your cash component is so and so, but along with that we can offer you some XYZ things as well such as vacation time, group health insurance, etcetera. Okay.

What will happen? The candidate will get an additional value. Hence, the candidate will be able to assess what are the pros and cons and what things really matter for joining this organization. (Clear?)

Now the second aspect that you can consider is that you should not focus on the base salary, instead you can include different compensation alternatives, such as “signing bonus, performance bonus, pension, stock options”. So, you see how you can restructure their initial offer in negotiation to fit the candidate's requirement.

Also, you can mention about career advancements that the expectations may not be aligned initially when the candidate is joining but as he or she grows within the organization, then the second or third year onwards, their expectations will match at par. Okay.

By doing so, the candidate will also get a long-term view and they will be realistic about the compensation package and that’s how you can meet mid-way somewhere. Right?

Now sometimes what happens is that the candidates become aggressive or they do not want to understand your logic. Well, at this particular juncture you should consider thanking them for their time and move on to pass on this offer to another desirable candidate.

So, “when you decide what to do, weigh both the value they bring to the business”. And if “there are other available candidates with similar qualifications and experiences, then you can approach them too.”

So, you need to know, when you have to disconnect from this conversation or from a particular candidate and move towards a new candidate. (Clear so far?)

Now generally the representatives or recruiters of the talent acquisition team make some mistakes during the negotiation and you have to avoid these mistakes at all costs.

First of all, “do not trash talk other companies”. They may be your competitors, but you cannot talk ill about them. Of course, you can compare and put a benchmark that how your organization is different from the other organizations. How is yours better? But you cannot demean them…

Next, “do not be aggressive or impatient”. You cannot force any candidate to join your organization. You have to be very patient and calm while talking to them so that the person feels at ease while talking to you. Okay.

The third and the most important thing is, “do not ignore biases”. Now, as individuals, we all have some conscious and unconscious biases. And the sooner we understand them, we can avoid them totally and we can also identify to work around those biases. Okay.

Well, with this we come to the closure of this particular topic. I hope you were able to draw some additional value from how to negotiate with your candidates and how you can be a good representative of the organization who can make the candidate feel at ease and comfortable before joining the organization. Okay.

I will see you with the next topic very soon.

Thank you.

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