The Science Behind Salary Negotiations: A Game Plan for Employers That Actually Works

Gusto Editors

From flea market finagling to begging pets at the dinner table, negotiations power every corner of our lives. So the moment you fall for an incredible candidate, everything in your being probably tells you to fire off that offer letter and lock it down right away. In reality, there’s one final hurdle you need to get through before handing over that onboarding packet: The much-dreaded salary negotiation.

Yes, there are a ton of books and courses about the highly-debated subject of negotiation. But when you’re just trying to seal the deal, there’s no time for sifting through all those pages of research. Use these crib notes to focus the conversation and make your dream candidate accept that tantalizing offer.

Salary negotiation tips for employers

Playing hardball is kind of hard, no matter which side of the table you’re on. Your candidate is thinking about a million things during the actual negotiation, so it can be difficult to follow one strict philosophy instead of feeling out the situation. Here are a few ways you can make the process go smoothly while still communicating the actual substance of the offer.

1. Before you begin, get comfortable with the salary range for the role

The highest and lowest you’re willing to pay will give you guardrails as you walk into the negotiation. Are you the one throwing out the opening bid? If you lead with the salary number, try not to pick the highest amount you can possibly pay. Let’s say your candidate bounces back with a counter-offer and you can’t meet them any higher. Without having room to expand with salary and benefits, it can make your candidate feel a bit crushed.

The funny thing is, even if the offer is enticing, just accepting it straight out can also make both sides feel weird. In the book Secrets of Power Negotiating, author Roger Dawson explains that this phenomenon doesn’t just occur because people want the best deal possible. His research shows that if a person agrees to the first offer or counter-offer, either side can have these two reactions.

  • They wonder if they could have done better, or
  • They think something isn’t right

Both of these can cause damage to the relationship down the road or make it more difficult to finish the negotiation. That’s why it’s key to carve out some wiggle room before entering the ring.

2. Take a crash course in the candidate — and then personalize the offer as much as you can

Don’t underestimate how powerful it can be to connect with someone before barreling forward with a number. During the interview process, it’s important that you and others on the team get a solid handle on what your candidate is looking for in the role and what’s happening in the rest of their life — things that an average resume can’t quite capture. With this information in tow, you can tailor the offer to exactly what makes sense for their situation. For example, if they have a growing family, a flexible work schedule or health benefits may be more appealing to them than employee equity or other perks.

What should you do? Use your discussion to explain how the package maps to your excitement for bringing them on the team. What shouldn’t you do? Rehash issues that came up during the interview process. If you’re extending an offer, hopefully those issues are small enough to forget about anyway.

3. Schmooze it up

It’s up to you to decide how much information you feel comfortable sharing. However, Wharton professor Adam Grant says offering up extra information not only makes you more trustworthy, but it also encourages the person on the other side to feel more relaxed. This then leads them to offer up something as well. Grant cites a Stanford and Kellogg study that found when a group of people only shared their email and names during negotiations, they struck up agreements 40 percent of the time. But when that same group opened up about things that weren’t essential to the negotiation, 59 percent were able to strike a deal.

4. Offer your support

Make no mistake — emotions play a big role in the compensation conversation. Fortunately, the more you understand your own emotions and anxieties, the more you’ll be able to understand your candidate.

Common anxiety triggers include feeling a lack of control of the situation and a high level of uncertainty that comes with being part of an unsure process. But by making yourself available,  you’ll be able to better manage those anxieties for both you and your candidate.

First, give your candidates ample time to make a decision. Then, offer your time to help them think through any parts of the offer. You can suggest that they come back to the office to chat or even take them out to coffee.

Here are a few examples of what you can say:

  • “Take your time thinking things over — this is an important decision for you.”
  • “I’ll check in with you later this week.”
  • “You’re awesome and we really want you. Let me know how I can make that happen.”
  • “I’m here for you if you want to talk about any part of the offer.”
  • “If you want to talk to anyone else on the team, I’d be happy to set that up.”

And finally, don’t forget to give them a date for when you want to hear their final decision.

5. First salary rodeo? Practice makes perfect

Notice how when you shake a snow globe, it creates an entirely different scene each time? Negotiations are pretty similar. Each one is completely unlike any other before it, which is why it’s so important to get experience with the process before you jump in.

It might feel awkward at first, but ask your friends and colleagues if you can role play with them (without baring all about your candidate). It can be eye-opening for you to take turns playing the candidate and having a friend play you. This helps you tackle a real challenge of regular negotiations: You rarely get a real-time reaction. Once an agreement is reached, you usually don’t hear from the other party about how you came across — unless you explicitly ask for feedback. But through roleplaying, you can better prepare yourself for the next time around.

Salary negotiations might feel a little scary, regardless if you’re the one hiring or the one trying to get hired. But with these pointers in mind, you’ll be able to mosey into any negotiation and clinch the candidate you want.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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