How To Manage Salary Expectations For A New Hire (In 9 Easy Steps)

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At some point, you are going to have to discuss salary with new hires. Both you and the hires are going to have certain expectations. As an employer, it’s your responsibility to manage your and the new hires’ expectations effectively.

You have a common goal. You want this new hire to succeed at your business. That is going to be partially influenced by how they are valued and compensated. Setting expectations correctly is the first step to this end.

Key Takeaways

• When possible, offer salary expectations as a range to provide greater flexibility.

• Consider the experience and qualifications of the new hire to come up with a fair salary.

• Managing salary expectations effectively builds trust and is proactive against future issues.

What Are Salary Expectations?

Salary expectations are the expectations you and a hiring candidate have regarding payment for their labor. Salary expectations can either come in a specific number or a range.

The amount can vary based on industry standards, the amount of experience, and the budget of the employer.

Discussing salary expectations does not have to be a struggle or conflict. With the right method, you and your candidates can have a constructive, collaborative conversation about salary expectations.

9 Steps To Managing Salary Expectations For New Hires

To set salary expectations for a new hire:

1. Have a positive mindset. It is very normal for people to be uncomfortable when discussing money, especially salaries. Reframe this challenge as an opportunity for growth.

   This does not have to be a conflict between employer and employee. It is a conversation, where both parties want to come to a reasonable solution. So keep an open mind, and understand your needs and the needs of the new hire.

2. Research. If you want to remain competitive, you need to know what other companies are offering similar positions. New hires know their value and what they could get elsewhere.

   Go on job listings sites to see what the average salaries look like. Make sure to consider your level of experience as well as your location, because the cost of living adjustments can vary between cities and states.

3. Set a range or budget. Analyze the finances of your business to determine a reasonable amount you can offer. If you can, give yourself some more flexibility by setting a range. You may need to work with your human resources department and your supervisor to figure out what you can offer.

4. If possible, include it in the job description. In this case, use a range. This will help you attract ideal candidates because they are more likely to apply to jobs that offer competitive salaries in the open job market. You also have the added benefit of setting expectations right away for further salary negotiations.

5. Consider their experience and qualifications. Candidates with more experience or qualifications will understandably want a higher salary than the average person in their position. Conversely, someone with little experience or qualifications may be more willing to settle for lower expectations.

6. Ask them about their salary expectations. Remember, you want this to be a positive experience, so don’t just dictate terms. Learn what they want. You can’t have a constructive conversation until you know the expectations of the new hire or employee.

7. Negotiate. It is likely your initial expectations will not match that of the candidate. That is not a problem unless the gap is insurmountable. More likely, however, you two will be within reason and can work towards a common goal. Using the information you have learned, direct the conversation towards an amount you both can accept.

8. Use benefits to your advantage. The benefits you offer can act as supplemental leverage in salary negotiations. Additionally, many candidates and employees are interested in more than just the money. They want to work for a company that is going to help them provide a good life. When setting salary expectations, you can point out how these benefits add value to the position.

9. Conclude constructively. You and the new hire or employee need to work together to come to a solution that leaves you both satisfied. This is why it is important to do your research and understand the needs of the other person. You can take this information to guide the conversation along to something that addresses expectations in an empathetic and realistic manner.

Tips For Discussing Salary With New Hires And Employees

Along with what has already been mentioned, consider the following tips when setting salary expectations:

• Focus on progress. At every step of the discussion, you want to remind yourself that the goal is to move forward with this new hire. Therefore, reframe challenges as opportunities to create growth in yourself, your company, and your employees.

• Invest in your employees. Your workers’ wages are not a drain on the budget or other resources. They are investments to help get the best out of your employees. Use salaries as a way to incentivize productivity and stability.

• Relax. You may be overwhelmed by all that needs to happen in setting salary expectations. Or you may find that at the moment you are stressed. If you find yourself getting frustrated, take some breaths or a break, clear your mind, and come back to it with fresh energy.

• Be fair. It should go without saying, but even if you can’t offer everything the new hire is looking for, still be fair. Take the time to remain professional, empathetic, and objective in your decision-making.

The Benefits of Discussing Salary

Salary discussions will have to happen eventually. Being prepared for them is extremely helpful for your business for multiple reasons:

• You are not caught off guard. If you know how to handle salary expectations, then when they come up you can be ready to be professional, positive, and constructive.

• Avoids future conflict. Employees who feel undervalued can only work at a company for so long before they negatively impact the business. They will grow resentful. They might leave or just simply work less because they are not motivated.

• Builds trust. Salaries are important to employees, so if you can show them how seriously you consider their needs, you can prove to them that you are on their side.

• Settles important concerns. Talking about salary gets the issue out of the way. If you procrastinate or rush through this process, you are missing an opportunity to fully resolve the situation.

Salary Expectations FAQ

1. What if a candidate asks for more than I can offer?

   If the candidate asks for more than you can offer, consider your budget. If the gap between you is not too high, provide a reasonable counteroffer. If this is still not enough, work with the candidate on finding additional benefits that might sweeten the deal. If the candidate is truly someone you want to hire, you may need to make adjustments in the budget to meet their salary demands.

2. What if a candidate asks for less than I offer?

   If the candidate asks for less than you offer, still give them what you expected. This shows good faith and starts your working relationship in a healthy manner. You are offering the new hire an opportunity to prove themselves. They will feel more valued which can increase motivation and productivity.

3. What if a candidate has similar salary expectations?

   If a candidate has similar salary expectations, you are in luck. You can proceed to give them what both of you want and can move forward on good terms. Still, remember to sell all the other benefits of working for the company to help foster a stronger connection.

4. How should H.R. negotiate salary?

   If H.R. is negotiating salaries, they need to know what their budget is, and research salaries for similar positions elsewhere. This information empowers HR to provide a fair salary expectation. HR should also consider the level of experience and qualifications of the candidate or employee. If H.R. is handling the salary negotiations, make sure to stay involved since you will be the one working with the new hire.

References

1. U.C. Berkely – Starting Salaries / New Hire Salaries

2. Harvard University – How to Negotiate Salary: 3 Winning Strategies

Author

Conner Martin

Conner is a professional writer and editor who has worked in a variety of different industries and media. He is passionate about communication and about making even complex topics accessible to wide audiences. Conner holds a Master of Professional Writing degree from the University of Oklahoma.