There’s little question that, especially in this labor market, that employers have the upper hand when it comes to negotiating salary. However, as a small business owner you have special concerns. You have to ensure that you are paying a competitive salary to attract the best talent in the field. You also have more reasons to keep overhead down than your larger competitors.
Tips for Salary Negotiation For Small Business
Just as there are tips for employees who want to get the maximum salary out of an employer, so are there tips for you to keep employee wages down. Remember that you still must be competitive, but saving a couple dollars an hour here and there can add up very quickly.
- Know the going market rates for the position advertised. This means not knowing just the average, but the average for where you live and what people with different levels of experience are making. Perhaps most importantly, know what your company pays.
- Be ready to discuss salary at any time. While it’s generally considered a faux pas to bring up salary, that doesn’t mean that somewhere along the line your preferred candidate won’t broach the subject. Be ready for it to happen.
- Don’t be afraid to move a little bit. In this economy some people simply can’t take a job because it doesn’t pay enough. Ask yourself if what the employee is asking for is so much that you’re willing to lose him to the competition.
- Remember that salary negotiation is more about both of you winning than one party besting the other. Keep that in mind as you haggle over price.
- Point out alternative forms of compensation, such as commissions, bonuses and benefits. While you might offer a lower salary, this might not make a difference when bonuses and competitive benefits packages are factored in. More and more employees are looking at the total level of compensation, not just the cash they get at the end of the week.
- Start ups would do well to consider offering potential employees equity in the company as a form of alternative compensation. If the employee has the same faith in your company that you do, this can be a very attractive form of compensation.
- Set limits and hold fast to them. If you’re willing to do anything to hire someone, you’ve already lost the battle. Further, you’re likely to have a strained and tense relationship with the employee you hired at a higher price point than you would have wished.
- In the event that your opening offer isn’t really negotiable, you should make this clear from the outset. It’s unfair and a waste of time to give the impression that you can be haggled with when in fact you’ve already offered your hard ceiling.
Try and come to a win-win conclusion to salary negotiations. This will have your relationship with your new employee off on the right foot. But be prepared for the review when you will have to revisit the subject of salary negotiation all over again.
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