When the job market skies starts to clear and the economic sun shines down on your business, your employees might start thinking of approaching you for a bump in pay. Just like your employees are likely to be nervous about coming to you about a raise, you’re likely just as anxious about broaching the subject. To ease some of your stress, learn three fundamental tactics for salary negotiation for employers.
1. Do Your Research
If your business has been especially profitable, or if the market has been graced with good fortune, it’s good for you to anticipate employees coming to you for raises. Do your research beforehand as to how much other professionals with the same amount of experience are getting paid to perform the same job. This is a good starting point, and you should be sure to adjust your findings according to your company budget, the size of your business and employee work performance. Salary negotiation for employers is all about awareness; awareness of the current economic climate, the job market, your profitability and the needs of your employees.
Something else you and other business owners should research is your staff. Which members are deserving of the highest wages and which need to prove they’re worthy of raises No matter how long an employee has been with your company, if he or she only does the minimum requirement and doesn’t show initiative, that individual may not deserve much in the way of a raise, and that’s even if she or he deserves a raise at all.
2. Brush Up on Your Communication and Diplomatic Skills
Just as you have to properly communicate your company’s needs when it comes to finding qualified individuals to help you grow, you also have to communicate properly when it comes to salary negotiation for employers. What this means is you have to communicate what you can and can’t do when it comes to fulfilling an employee’s desire for higher compensation. Once you’ve listened to a reason as to why an employee deserves a raise, be clear as to whether you agree or disagree, why and how you are able to meet his or her desired salary (if you are able to, that is).
Once you start talking salary, you’ll want to refrain from leading with your top amount. In most cases, employees are aware that the initial amount you present them with is negotiable, which may make them see if they can wheedle more out of you, even if the amount you offered is exactly the one they were hoping for. After all, can you blame them for seeing just how much they can get
3. Have Backup Forms of Compensation
Just as there are some employees who will approach you with reasonable salary demands, there are some who will ask for a increase in pay that’s simply out of your budget. Rather than dismiss the request outright, this is where the negotiation aspect of salary negotiation for employers comes into play. Rather than potentially risk insulting the employee with a much lower offer than what he or she requested (which could result in a loss of that employee), try to meet the salary as much as you can and throw in a few perks to compensate for the rest of the proposed salary.
One example of such a perk is health insurance. Benefits have become a major concern for many employees, especially with the uncertainty that often comes with retirement and future health. Besides health insurance, you can see if the employee would like having the ability to telecommute and work away from the office. While working from home isn’t the same as an increase in pay, it can be quite an increase in convenience. The employee doesn’t have to endure morning or evening traffic, and she or he might be more comfortable working at home or from a local coffeehouse. Another card to play from the deck of salary negotiation for employer is to offer to reimburse the employee for her or his tuition costs. The employee is able to further his or her education, which is likely to be of a big help in future career prospects and future earnings as well.
Rather than view salary negotiation as something that makes you squirm, view it as a way to retain your company’s best employees and show them how much you value their hard work. For more tips on building a better business and making all-star hires, check out more of Mighty Recruiter’s tools and articles.