In an era where financial pressures tighten their grip on the global economy, employees' expectations in terms of salary are growing.
But this discrepancy between employees’ expectations and your organisation’s realistic financial capacity can create frustrations and even conflicts if left unresolved. 💣
What's the best way to handle this scenario both effectively and professionally, ensuring you retain the candidate and protect your budget? Let’s find out ⬇️
People at Work, a 2023 study conducted by ADP Research made some telling observations about what employees are anticipating in terms of salary increases.
➡️ A staggering 83% of workers are setting their sights on an average salary increase of 8.3% for the year ahead
➡️ Approximately 10% of workers have their sights set even higher, expecting salary increases exceeding 15%
➡️ Another 18% fall within the range of expecting salary bumps between 10% and 12%
One of the primary catalysts behind these varying expectations is the candidate-driven talent market. In such a market, candidates are proactively approached by recruiters and organisations offering more generous salaries for similar roles. This dynamic creates a disconnect between supply and demand, with employees becoming acutely aware of their market value.
Misalignment is a fundamental driver of elevated salary expectations. As certain skill sets become increasingly sought after, employees possess the leverage to negotiate for higher pay. Employers are often compelled to meet these demands to secure top talent.
Another critical factor at play is the ongoing cost-of-living crisis. As living expenses continue to rise, employees naturally seek ways to increase their income to maintain their quality of life. This external pressure further contributes to the upward trajectory of salary expectations. 📈
💵 It's no secret that salary consistently ranks as the most crucial job factor for employees across various industries and sectors. According to a recent Gallup survey, 61% of workers have identified salary as their top consideration when evaluating job opportunities.
The importance of pay is further underscored by the ever-present challenges posed by the cost of living. As expenses for housing, healthcare, education, and daily essentials continue to mount, employees are left grappling with the need to secure higher incomes.
While pay is undeniably a critical factor in employee retention, it is not always the most important factor for every individual or in every situation.
Employee retention is influenced by a combination of parameters such as 👇
Dealing with unrealistic pay expectations can be a delicate yet essential task for HR professionals. We recommend adopting a strategic approach that balances the candidate's aspirations with your organisation's budget and market realities.
Let's explore the initial steps to manage these expectations ⬇️
The first step in addressing unrealistic pay expectations is to understand the market value of the role and the candidate.
One vital approach is to utilise reputable salary surveys that are specific to the job’s industry and location. These surveys will give you insights into compensation ranges for various job roles, and provide you with a clear picture of the market standard.
Additionally, industry benchmarks are a valuable tool to ensure your salary offerings align with competitors so that you can better attract and retain top talent. 👍
A lot of successful outcomes when dealing with pay expectations involve authentic communication. 📣
When faced with an unreasonable salary request, resist the temptation to deliver a straightforward 'yes' or 'no.' Instead, engage in a constructive dialogue to better understand the candidate's perspective.
Take the time to uncover the motivations behind the candidate's salary expectations ⬇️
When comes the time to present your salary offer, ensure you transparently explain the rationale behind it. Demonstrate how the offer aligns with market standards, the role's value, and the candidate's qualifications and potential. 🙌
Beyond salary, emphasise the additional benefits and opportunities your organisation provides. This can include career development programs, work-life balance initiatives, a positive workplace culture, and more. Showcase the holistic value of joining your team.
Addressing unrealistic salary expectations is about empathy, yes, but it also requires a fair amount of skilled negotiation.
Rather than dismissing these expectations outright, we recommend engaging in constructive dialogue to find common ground and reach a mutually beneficial solution. 👍
Start by actively listening to the candidate's concerns and motivations behind their salary expectations. If you’re able to understand their perspective, you’re that much closer to finding a solution that works for both parties.
Look for opportunities for compromise and common ground. Explore areas where you can meet the candidate's expectations to a reasonable extent while staying within your organisation's budget and market constraints.
👉 This can also include various strategies like:
There’s no ignoring that employees’ salary expectations are on the rise. The key to retaining top talent while protecting your budget is proactively addressing this disparity.
Here are some key takeaways ⬇️
Got any questions? Still need some guidance to navigate through dealing with pay expectations? Contact us! We’re always here to help 🤝
Addressing unrealistic pay expectations during an interview involves open communication and setting realistic salary expectations based on the role and market standards. It's crucial to understand the candidate's motivations and provide transparent feedback.
We recommend customising your email based on the specific candidate and situation. However, here's a general template:
Subject: Salary Negotiation Discussion
Hi [Candidate's Name],
I hope this email finds you well. I wanted to discuss the salary for the [Position] role.
We value your experience and qualifications, and we're committed to offering a competitive package that aligns with industry standards. Let's schedule a call to explore your salary expectations and find a mutually beneficial solution.
Please let me know your availability for a conversation.
Best regards,
[Your Name]
Some tips include:
To handle salary negotiations fairly, ensure transparency, base offers on market data, and provide clear reasons for your offer. Consider candidates' qualifications and maintain a respectful tone during negotiations.
Here's an example of salary negotiation with HR:
HR: We're excited to offer you the [Position] role.
Candidate: I was expecting a higher salary.
HR: We understand your expectations. Our offer is based on industry standards and your qualifications. We can provide opportunities for growth and performance-based bonuses.
HR professionals should focus on fairness, transparency, and empathy during salary negotiations. Avoid tricks and prioritise open communication to reach mutually beneficial agreements.
Addressing unrealistic salary expectations involves explaining market standards, offering competitive packages, and highlighting non-monetary benefits such as career development opportunities.
Establishing a fair salary range involves considering market data, industry benchmarks, and budget constraints. It should reflect the role's value to your organisation and align with competitive offerings.
Addressing unrealistic career development expectations involves discussing realistic growth opportunities within your organisation and aligning them with the candidate's goals and qualifications.