Creating the right foundation for making a compelling appeal to your ideal candidate begins before the first interview.
When you’re looking to hire for a new position, it’s best to determine upfront the must-have characteristics of the new team member. Do they need to have certain certifications, years of experience or established contacts in the industry? Focusing on fulfilling these characteristics helps you make a more rational decision once you’ve found the right person.
You’ll want to consider what makes your company different and what you have to offer besides salary. Then, during the interview process, pay close attention to what each individual candidate says. In these discussions, if they focus more on rate of pay, salary and bonuses rather than a mix of compensation and company environment (culture, core value fit or professional growth), then they may not be the best choice. After all, studies have shown someone who is primarily focused on salary is more likely to be lured away, perhaps even as early as 18-24 months after starting a new job.
Just because you find yourself with a candidate seeking a higher salary than you can afford, that doesn’t mean they’re entirely off limits and you should end the recruitment process with them as soon as you see a number you weren't prepared for.
Hiring top talent is a crucial goal for most recruiting strategies, but should it be at the expense of your company’s budget? How do you navigate a salary negotiation that starts out of your range?
Take a deep breath in… and now out. We’re going to go a little further into this as it's a conversation we had recently with a leader in our community that we thought was so valuable in our current landscape of 2020. We’re going to guide you on what you should do if your candidate’s desired compensation is out of your budget.
Let’s first talk about expected or desired salary.
Expected or desired salary is exactly what it sounds like — it’s the expectation your candidates have for whatever role they’re applying for. It's usually in line with what they're used to making or have seen after some research about the role.
Many companies will list specifically the ranges they are paying for the roles they are hiring for right in the job ad, though it's not necessary, it is helpful in allowing candidates to rule themselves out of the role.
How to respond if a candidate's salary request is higher than expected or more than your budget.
It can be discouraging to find a great candidate for your open role, only to discover they’re asking for a higher salary than you can afford.
First things first, check to see if there could be room in the budget to meet their salary expectations. Great talent can sometimes come with a higher salary, but that might also mean great output and potential for growth.
A great place to start is by determining the current market value for the role in question.
To get the best results, opt for fresh, accurate data so you can confidently move forward knowing exactly what you should be paying someone in this position. Great resources for this are sights such as Indeed and GlassDoor.
If their desired compensation is truly out of reach, there’s only one thing you can do: be transparent about your budget restrictions.
Be open early in the process that the requested range is too high but you want to understand better what the candidate is looking for. You can ask something like “Aside from pay, what are the most important things you look for in a job and/or company?”
If you believe a candidate’s target salary/compensation is ridiculously too high, you might want to consider responding with the following:
“I just want to be honest with you. Your target salary is outside our range. If this is still negotiable, I would like to invite you for an interview and further discuss the role with you. If not, I understand and will not be wasting anymore of your time.”
Keep in mind, the majority of people will work for purpose and the ability to grow. If the company has a clear vision, core values and a great culture almost anybody would take less for growth opportunities and to be in the right place.
If people can jump in and prove their worth and really solve problems and contribute at a high level, that should be rewarded. But there has to be some proven results and behavior- this means you may be able to start lower but create a path to eventually get there.
Be sure to respond to their salary expectations with an honest, transparent conversation about the issue — and make sure to include what you are willing to pay, so your candidate has actual numbers to think over.
Consider this- people are acutely aware what the landscape is right now- they know companies are desperately searching, they may have thrown out a higher number just wondering if you would say yes. Don’t make it a deal breaker on the interview, but don’t allow yourself to be held hostage by people taking advantage of the landscape either. Be fair, set clear expectations and have open/honest communication.
This communication is crucial, so be thoughtful about it!
How to help potential (and existing) team members understand the difference in base rate vs the entire salary/benefit package.
Sometimes team members may have a limited perspective and we can help them understand that compensation is so much more than hourly pay. If you have a great benefit package- health benefits, 401K, PTO etc. But a variety of other benefits can often help tip the scales in your favor with job candidates you can’t afford.
For example, the opportunity to work remotely is growing in popularity, a trend that shows no signs of slowing. You also might consider offering additional paid time off, profit sharing, training opportunities, talk about team health events, or a bonus tied to company performance.
It’s likely they would be willing to adjust their desired pay knowing how much a company is willing to invest.
What if after all that, they say no? Worst case scenario? They reject your offer.
Unfortunately, there’s nothing you can do but let your ideal candidate go — but make sure to not burn your bridges! Assure the applicant that if a relevant role turns up that fits their salary expectations, you’ll make sure to keep them in mind.You shouldn’t give up on a candidate who wants a higher salary than you have budgeted.
Remember, when seeking talent, that personal preferences and professional goals may outweigh dollar signs for many candidates. Then, in the interview and negotiation stages of your search, sell the candidate on those realities.
Remember in today’s landscape, culture is everything, and might just be the thing to help you “sell” your candidate on wanting to join your company.