How to navigate salary expectation conversations with job seekers

If we asked you, right now, to tell us what your salary is, how would you respond?

…if even the thought of sharing this information makes you feel awkward, you’re far from alone. Discussions around salaries are still very much a taboo. We may not even know the salaries of our family members or closest friends.

There is one context, however, where salary conversations are unavoidable, and that’s during recruitment.

As we head into 2022, when we’re likely going to see further impacts of the Great Resignation, it’s more important than ever that HR leaders and hiring managers get comfortable with these kinds of conversations. According to our Employee Movement and Retention Report, 48% of Australian workers will consider seeking a new job in 2022. That’s a lot of job interviews, and a lot of salary chat!

What are current salary expectation trends?

Businesses should be as informed as possible about the evolving state of salary expectations. With so much action in the jobs market in the last 12 months, how has thinking around a desired salary changed?

We asked Australian workers about the salary expectations for our Employee Movement and Retention Report. How much of an increase were they expecting from their current role when pursuing something new?

The most popular response was a 10% pay increase, with 34% of respondents choosing this, with a 20% pay increase coming in at a close second, with 23% of respondents selecting this. At an even closer third, however, 21% of respondents stated that they would be satisfied with a new salary on par with their current role. Only 15% were expecting an increase of over 30%.

What does this tell us? It should be comforting that most expectations are still in a reasonable range of what employers can offer. It might also suggest that other forms of compensation can have an impact when it comes to winning a candidate over.

How can HR navigate conversations around salary expectations?

With a topic that’s so tricky to tackle, no one expects HR and hiring managers to be naturally super smooth when it comes to these conversations. However, you can prepare yourself for the most productive discussions with these helpful tips.

1. Approach conversations with the right mindset

If you walk into the conversation with the mindset that you’re going to have to go head-to-head with your candidate, you’re unlikely to have a helpful exchange. Deflate the pressure and approach the conversation with a transparent, generous mindset. Nine times out of ten, both you and the candidate will have the common goal of coming to a reasonable resolution when it comes to salary.

Another thing to remember is that you’re also setting the tone for how the business approaches compensation conversations in the future. If you go in with an aggressive or awkward manner, it may not give the candidate confidence that later salary conversations will be any more reasonable.

2. Always have a budget in mind

Chances are, when you decided that you needed to fill or create this role, you crunched the numbers on how it would fit into your overall headcount budget. Once you have this range, have it in the back of your mind when having salary conversations, but not before you’ve made sure that it’s in line with industry standards. Which brings us to our next point…

3. Be aware of the current market salary range

Job seekers are more savvy than they’ve ever been before. If they land an interview with you, they’re likely logging onto Glassdoor to check out your employer reviews, sussing out your employer brand on LinkedIn, speaking to people in their network who work at your business and triple checking the market’s salary range for someone in their position.

If your budget-aligned offering is way off the average salary range, you may have to rethink this number before you sit down for this discussion with your candidate. Many will be using market value to set their expectations for what is a fair salary, so it’s very important to be at least aware of – if not aligned with – this number.

4. Ask about expectations in the first job interview

Recruiting can be a long and tiresome experience for all involved. By the end of the process, your candidate has taken the time to apply, go through rounds of nerve-wracking interviews, and they may have even completed a task to demonstrate their skills. The hiring manager and HR would have gone through mountains of paperwork, organised members of the team for interviews and spent time compiling feedback.

The general length of the hiring process is why it’s so important to ascertain the candidate’s salary expectations early on. Our talent acquisition team at Employment Hero suggests asking about their salary expectation range on the first interview or screening call. This way you’re on the same page from the start of the process, and you’re not wasting each other’s time if you don’t see eye to eye.

5. Be prepared to negotiate

It’s on the other end of the hiring process that you will negotiate. You should be prepared for a bit of back and forth to make sure that everyone feels confident in moving forward. You should especially be prepared for this if your starting point for an offer is at the lower end of the candidate’s expectation range.

Your candidate will be taking into consideration the industry standard, their specified expectations range, their in-demand skills, their desired job title and other compensation on offer. Be prepared to enter your salary negotiation process with all of these elements in mind.

6. Remember that compensation is more than just salary

Salary isn’t everything to a candidate (if it was, we’d likely all be investment bankers). Throughout the interview process, you might be asked questions about your workplace benefits, company culture and employee experience (a package which is known in the HR biz as the employee value proposition or EVP).

Be prepared to spruik your amazing workplace in response to this question, to show there’s even more to your workplace than a competitive compensation package. This is where it’s time to talk the talk about:

• Any health benefits like discounted insurance, virtual yoga or an employee assistance program (EAP)
• Learning and development initiatives like tuition reimbursement, paid time off for study or Learning Management Systems
• Your company flexible working policy or hybrid working style that promotes work-life balance

Promote the things that make your employee experience great during the recruitment process, and you might find your salary expectation conversations easier.

Want to refresh your interview process?

Nailing salary expectation conversations is just one part of creating a great interview process that can win over star talent. If you’re looking to revamp your entire recruitment process, from interview questions to employer branding and recruitment technology, we’re here to help.

Episode one of our Talent Wars Panel Series is now available on-demand, and it’s the perfect guide to attracting star candidates. Join Employment Hero’s Talent Acquisition Manager Kate Jolly and Sinead Connolly, Director and CoFounder of Lotus Recruitment, for a discussion about all things recruitment, moderated by our Chief People Officer Alex Hattingh.

Kate, Sinead and Alex unpack how to create a great candidate experience, the role of the EVP and employer brand in recruitment and so much war. It’s essential viewing for anyone hiring in 2022. Watch here.