Negotiating salaries is a crucial moment in the relationship between an employer and employee. These discussions, whether they occur during recruitment, annual review, or role changes, require a balance between empathy, market knowledge, and strategic communication. Facilitating these conversations in a fair and transparent manner is crucial for HR professionals to maintain employee trust and motivation.
Understanding the context of salary discussions
Salary discussions can be initiated by employees for a variety of reasons.
Job Offers : Candidates can negotiate to match offers with market standards and personal expectations.
Performance Review: Employees may seek to raises that reflect their achievements and contributions.
Role changes: Promotions and expanded responsibilities can often lead to a reevaluation of compensation.
Recognizing the motivation behind a concern helps HR departments to address concerns and formulate appropriate responses.
Factors that influence compensation decisions
Consider the following when evaluating salary adjustments:
Experience: Evaluate the individual’s expertise, tenure and unique contributions.
Geographical Location : Take into account regional differences in cost of living and local market rates.
Size and Resources of the Company: Aligning compensation strategies to organisational capabilities.
Use salary data from reliable sources such as Ashdown Group, LinkedIn Salary Insights and Glassdoor to help inform your decisions. Compensation is a multifaceted issue, as it’s influenced by many factors, including market trends, budgets of organisations, and performance.
Approach and Timing of Salary Negotiations
Salary discussions that are effective and timely must be well-structured.
During the Recruitment Address expectations of compensation after an offer has been extended but before contracts are finalised.
In Current roles: Encourage discussion during scheduled performance evaluations or after major project completions.
When assessing salary adjustments, ensure that you take into account the financial health of your organisation and its strategic goals.
Structure the Conversation
Promote a constructive dialogue by:
Encourage Preparation : Advise staff to highlight their achievements, and market research.
Clear Expectations – Define what your organisation is capable of offering, including salary levels and benefits.
Explore Alternatives If salary increases are not possible, consider other forms of recognition such as flexible work arrangements or professional development opportunities.
Supporting Early-Career Employees
First-time negotiating parties may require additional guidance and information on market norms. Offer resources that will help them to understand industry standards, and encourage open communication. Discuss compensation in a relaxed environment without worrying about negative consequences.
Align their expectations to the organisation’s capabilities and their career progression paths, while balancing aspirations with realities.
By negotiating salaries in a way that is both structured and empathic, HR professionals are able to achieve fair outcomes for employees and organisations.
