When should you, as a recruiter or hiring manager, start to discuss salary during an interview — and what can you do if you come up short?
These are two of the most important, and least understood, aspects of the recruiting process.
You shouldn’t start too soon – but you shouldn’t wait too long, either. The best time is when both parties are somewhat serious: usually at the end of the first interview or just before the second interview.
If you wait until the offer stage to settle the details, it’s too late. By then, the candidate will know he/she’s the finalist – and this gives him/her the upper hand. But if you talk about salary too soon, before you and the candidate know each other, it creates an awkward situation. Then it often becomes just a yes/no filter to determine if each party wants to proceed. This precludes the chance of any trade-offs, and often turns into a classic case of missed opportunities on both sides.
I suggest developing the framework for an offer package early in the assessment process – and in small steps. The process becomes smooth and virtually painless this way. It minimizes the awkwardness of the typical negotiating session, when you put everything on the table at the end.
This gradual approach also gives the candidate the perception of a stronger negotiating position: the key is to get concessions along the way, when you still have leverage and something to offer. You can negotiate pieces of the complete offer this way – and test sincere interest at each step. You can do this by assessing the candidate’s competency at the same time as you’re recruiting them and closing the deal.
If salary becomes a major issue before a final offer has been made, it’s easy to ask the candidate just how flexible she is on this point. If she’s open to discussion, your objective is to switch her interest in the job to its more strategic aspects: better growth opportunities, more challenge and more impact.
An early review (less than a year) can sometimes compensate for a lower starting salary. Sign-on bonuses are always popular, and special performance-based bonuses can also help meet some salary objections. Make sure you review the benefits package: this might well include some hidden gem which helps sell the deal.
If the candidate doesn’t appear to be flexible on salary, pull the offer back. Since you haven’t made a formal offer, it’s easy to say, “I don’t think we can go any higher.” Involve the candidate: “Are you suggesting that if we can’t meet your salary needs, you’re withdrawing from consideration?” If the answer is “Yes,” you have two choices: say, “I’ll see what we can do,” or terminate the process.
If the answer is not quite so definite, you can keep the process alive by bringing up things like promotional opportunities, increasing the scope of the job and upgrading the chances of long-term advancement. Providing examples of current employees who have pulled this off always helps.
Another way to negotiate salary is to introduce an element of competition – real or imagined. A few years ago, I created a salary cap on a production manager’s position in the food industry by telling the candidate that if we were to go any higher on salary, we’d be forced to look at candidates with more experience. We had enough data on hand to show the candidate that his salary demand was more consistent with directors than managers – and he wasn’t yet at that level. With this data, and our strong stance, we convinced the candidate to stay within the salary range we had originally targeted.
Presenting an experience can also overcome salary problems and make your opportunity more compelling. A candidate for a CFO position who doesn’t have enough experience still might have a very high salary: you have to convince her that a move to a smaller company with a broader focus is essential for her continued growth – even if she has to give up a little salary as a trade-off. To move past salary problems, it’s up to the recruiter to present a compelling long-term opportunity that overrides all of the short-term monetary issues.