How to manage salary negotiations during the recruitment process

While the words ‘let’s talk about money’ can fill any recruiter with apprehension, salary negotiations are a crucial part of the hiring process – one you want to get right from the start.

Instead of overselling a role or haggling for the best pay, recruiters play a vital role as a conduit: someone who keeps the lines of communication open between the candidate and client when it comes to the nitty-gritty of remuneration.

But how do you talk about money while moving things forward, especially when salary expectations differ? Michael Simonyi, Principal Consultant at Davidson, and Mary Darke, Associate Director at Robert Walters, offer their top tips.

Before you talk about money with a candidate, make sure you know what the package offers – including the base salary, superannuation component and any benefits. “These days, we’re approaching the talent about the opportunity rather than them applying,” says Simonyi. “The more detail you have, the more credible you sound and the stronger position you are in.”

If you are unsure about what a package offers, Darke’s advice is to nail those details down with your client. “That’s where a new recruiter can, at times, get a bit unstuck,” she says. “Don’t be afraid to ask clients to break down all aspects of it, and to ask the question again throughout every stage of the recruitment process.”

Don’t be afraid to talk about salary at the start of the recruitment process. Otherwise, says Simonyi, “you may invite problems down the track when everyone’s fallen in love with everyone, but then the money starts getting talked about and the love affair’s over because everybody’s not on the same page.”

It’s also important to confirm salary expectations at each stage of the process: for example, check with the client when putting together a shortlist of candidates, put it in writing when confirming an interview with the candidate. “The letter of offer should really confirm the discussions that have happened both with the client and the successful candidate along the way,” says Simonyi.

Salary negotiations tend to run a lot smoother when both parties understand salary market rates. Clients often rely on recruiters for advice regarding what amount attracts the right calibre of talent, especially if haven’t gone to market with a role for some time. Similarly, giving candidates some market knowledge can help them set realistic expectations.

When giving advice, Darke says evidence-based data is best: “that includes case studies, scenario-based insights, salary surveys, salaries paid to candidates in similar roles in your network.”

Although it’s tempting to claim you can get a client over the line when it comes to money, it is best to be transparent rather than make promises you can’t keep.

“It’s not unheard of for recruiters to think, ‘I’ll be able to get the client up a few thousand dollars’, only to find that when they have the conversation with the client, that’s not going to happen,” says Simonyi. “Don’t commit to anything you aren’t authorised to commit to.”

Even the most thorough recruiter can land a candidate and client whose salary expectations aren’t aligned. In such cases, says Darke, “explain to the candidate why the role is classified at the salary it’s paying; there could be several reasons. There also may be other benefits to the role like learning and development opportunities. Give them a picture of the overall package, and then give the candidate time to confirm if things are progressing, because there’s no point in overselling.”

As for the client, “if you feel the candidate has a lot to offer the role and their expectations are in line with the market, perhaps have a discussion with your client. There could be an option for a salary review after six months, or a short-term incentive based on mutually agreed-on KPIs,” says Darke. “It’s about keeping those lines of communication open – both with candidates and clients.”