4 Best Practices for How Employers Should Discuss Compensation

2 min read
Nov 14, 2016

Workplace compensationYou’ve spent a long time to arrive at this point. You’ve sorted through resumes, discussed candidates, and conducted interviews. You’ve settled on someone who you believe is a good fit for the company. Now comes the moment of truth — offering a compensation package that will work for both sides.

It might be easy to think that the pressure is solely on the job candidate, but this is difficult for human resources professionals too. Here are best practices for talking about compensation with potential employees:



The candidate is definitely going to be prepared. With salary information for any profession easily available, they’re going to come in to the interview with clear expectations for salary. It’s your responsibility to learn the same information.

Some hiring managers will simply ask the candidate what they’re making now, then present their salary as a better offer. But this is poor practice for a number of reasons. First of all, it’s rude. How would you feel if the candidate asked how much money you’re making? Second, you have no idea if the candidate is lying to you. Lastly, it makes it look like you’re trying to lowball the candidate.

Don’t make an offer based on candidate’s past pay. Make an offer based on the market value of the position.


Don’t Focus Just on Salary

Poll after poll shows that employees actually value some perks more than a boost in salary. Talk about your company’s retirement plan, vacation days, and parental leave policy. Many perks that employees value won’t cost you a dime either, such as allowing employees to work from home sometimes.

You can also provide the candidate with a tour and introduce them to their potential new colleagues. Ultimately, you want an employee who is excited about your company’s culture, not just someone who is interested in a better salary.


Present the Offer in Writing

WritingSOURCE: giphy.com

The writer of this piece once had an HR manager who told the entire staff that he preferred “oral communication” when discussing compensation details. He immediately lost the trust of everyone in the room and would regularly agree to things only to reverse his decisions later.

Providing the offer in writing eliminates any potential confusion. It shows that you’re being upfront and that you want the candidate to have all the information possible. After you present the offer, give the candidate some time to read through and consider it.


Know Your Limits

Before entering negotiations, know exactly what you’re willing to give up. If you have equally talented candidates waiting in the wings, you have more flexibility if the candidate plays hardball.

If the employee asks for something outlandish, don’t cave in. While you’ve invested time and money in seeking out this candidate, sometimes you have to write that off as a sunk cost. If you give them a salary that’s considerably higher than market value, expect that other employees will find out. Bringing on a single employee isn’t worth harming morale.



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