Contrary to what some believe, negotiating a salary is not about winning. If either party feels capitulated, there is no winner. After all, the last thing you want to do is make an employee feel undervalued.

Here’s how employers should handle salary negotiations.

Be prepared

In some situations, an employee’s salary is bound to come up. I’m thinking of appraisals and job interviews.

If an employee asks you for a pay rise, you’d expect them to do their homework, so you should do the same.

• How much others in the role, at their level, are paid?
• Look specifically at your geographical area
• If you can, find out how much they used to earn
• What are others in your company, who are doing the same job, earning?

How important is the employee?

The importance of the employee will depend on various factors, including:

• How many others in the company can do their role
• How in-demand  their skills are
• How experienced are they
• How long have they worked at the company

What else can you offer them?

You don’t always have the budget for big pay packets, but you can gratify employees in other ways. Are you prepared to fund training? Can you give them more annual leave?

Trying to bring other variables into the equation is one way of preventing disgruntled employees from feeling overlooked and undervalued.

What is the person’s role in your company?

You should naturally consider how high up they are; would a higher salary be more respectful of their seniority? The converse could also be true. If they are on par with other employees, can you really give them a pay rise without addressing the salary of others? You can’t always afford to offer an across-the-board increase.

What is the current economic condition?

How’s your industry doing? Is there much money in it? Has the cost of living increased to a point where your salaries are considered low? Maybe the economy is rocky and your need to delay pay rises until your company feels more stable.

Don’t put it off

When employing somebody new, bring up salary as soon as you can, in the first interview. There’s no point wasting your time on somebody you can’t afford.

If taken by surprise

If an employee approaches you and asks for a pay rise, don’t feel pressured into giving an answer then and there.  You can always go away and think about your response, as long as you come back to the employee in a reasonable amount of time.


By Tirebuck Recruitment, a leading job agency, Solihull based.