Navigating the waters of the ever-changing talent-market can be tricky business. Salaries are on the rise, and purple squirrels are few and far in between. Like they teach you in Economics 101, startup salaries are inflated because talent supply is low and demand is high. Tech giants are paying astronomical salaries, and it’s tough to compete. You either pay a premium or trade off on the prerequisites. If you don’t, another employer will gladly swoop in. What do you do?
The first step to making a successful offer is knowing what salary the market demands. You can do research on glassdoor.com and salary.com, but the best option is to ask your network… from former colleagues or employers to people currently in this role. As well, in every interview, you should make a point of asking candidates about their expectations. Just be sure to ask the right question; it’s not so much about what the person currently earns, it’s what they expect in order to take your job.
When your due diligence is done, you may encounter this common problem: the magic number to land your candidate is substantially more than the rest of your team is making. So you ask yourself, “How do I maintain parity?”
When it comes to money matters, it is crucial that your team members play in the same ballpark. If they don’t, you’re taking a big risk. The last thing you need is to bring someone on board, and lose a key player in the process. I hear things like this all the time:
“We reviewed our current salaries for people with similar experience and feel this is a very generous offer.”
“We have to avoid imbalances when it comes to our internal salaries.”
If your research concludes that your current team is paid less than market value, it’s time to consider an impromptu salary review. If your budget does not allow for raises, I encourage you to find additional ways to engage, incentivize and show your appreciation for hard work and loyalty. Transparency is the most important thing. If you explain why you’re not able to offer more money at this time, they will respect your honesty. If you don’t, they will learn their worth from someone else.
My tried and tested advice is to start with your best offer. The manner in which you make a job offer will set the tone for the relationship with your new employee. This market is unforgiving; it favors the talent side of the equation. So, don’t think of low-balling for the sake of negotiating. If you choose to haggle, you will send the wrong message. Never forget that you are investing in a relationship that could endure for years – if it’s built on mutual respect.
Talent acquisition is like Toronto real estate, prices are driven by supply and demand. You don’t expect to buy a house at last year’s price so don’t assume last year’s salary is the going-rate today. The struggle to maintain parity and grow your team is real. Do your research and be transparent. If you need a little extra help, I’m here for you :-).