Win-Win Offer Negotiations: Employer Edition

By Paul Cannon

Why are salary discussions and offer negotiations becoming so complicated? Many factors are causing this but here are a few important things to consider.

The Impact of New Legislation and Candidate Awareness

First, new legislation in the Province of British Columbia makes it illegal to ask a prospective employee for their salary. You can only ask for their expectations. While not yet a law in other provinces, make no mistake, candidates are aware and are less inclined to provide salary information. Why? They want to ensure that they do not receive a low-ball offer and want to maximize their value.

Candidates Capitalizing on Market Dynamics

Second, thanks to COVID-19, the market has tightened, candidates are savvier, and the demand for talent is much greater. A good candidate knows their value in the market and will leverage the principles of scarcity to get what they want. Why has the market tightened? Approximately 1000 Baby Boomers are retiring each day from now to 2030. Even with the net inflow of new Canadians, this isn’t enough to offset this departure from the workforce.

Priorities for Flexibility and Autonomy

Third, candidate expectations of their relationship with work have changed. Candidates want the flexibility to work on their terms, whether that means flexible hours, flexible location or other objectives. Workplace culture, location and the opportunities for autonomy and flexibility are taking priority for early career candidates.

What Does this Mean for an Employer?

Make sure you know what the market is paying for roles you are trying to fill. There are countless examples of companies trying to hire an A+ candidate and offering a B+ salary and expecting recruitment success. The thought that a candidate should “just be happy with the offer and accept It” is not realistic of the mindset of candidates in this day and age. Top candidates have a lot of options in a tight market.

Additionally, more than ever before, candidates have access to company information. After doing research they often know better than the hiring managers what the positions should pay based on the market and competitors. As an employer, do your research, make sure your ranges are in line with your industry. Good candidates that you want to hire will not settle for an average offer if they know their potential value is higher. This also applies to company reputation. Thanks to platforms like Glass Door, Indeed and Google Reviews, candidates are able to find out what it is like to work at a company. If the organization has bad reviews, or a poor score online, then that is a hurdle that needs to be overcome.

How Does a Recruiter Fit in this Dynamic?

Recruiters are the go between with the potential employee and future employer. Our job is to represent both sides, not just one. Why is that? The reality is that the job of a recruiter is to head hunt a gainfully employed person to a new company. There is a trust factor a candidate has with their recruiter. They rely on us to guide them through a process and we need to represent them and our client to smooth the process. Making a career change in the current economy can be a very stressful event for a candidate and a recruiter makes it easier to navigate.

How Do we Move Forward?

Openness by employers to allow access to hiring managers & human resources to collaborate and share information with candidates typically allows for better results. Realistic salary ranges are critical throughout the process. Though it’s true recruiters are paid based on the negotiated base salary of a candidate, it is incorrect to assume that recruiters are focused on “pushing up” the salary. Recruiters work to provide feedback back and forth from the candidate to get the process to close with a suitable outcome for all parties. Most often it is the candidate that pushes back as they do their research and realize where their value is. Good recruiters focus on playing peacemaker so the offer stage stays congenial. We do not want to see a new relationship with a hiring manager and employee start off on the wrong foot because of a poor offer negotiation. We ease the process with the candidate. We often take the blame when things go wrong (which they do sometimes) but when it yields a successful outcome for an Employer and New Employee, then it is a win for everyone.