Before we can start to discuss the specifics of candidate rate negotiation, six rules for recruiters to live by, I think it is important that recruiters first understand exactly what is within their control and what is outside of their control. While we can't control our candidate's behaviors and the things that they say and do or don't do, there are also several things in which recruiters can exert 100% control over including:
- What candidates we submit
- What we offer and are willing to pay our candidates
- Whether or not we establish a fair pay rate or salary history
- How we position our opportunity with our candidate
- The questions we ask our candidates
It’s important that recruiters focus their time and energy on the things they can control rather than worry about and complain about the things they can’t control.
How Smart, Savvy Candidates Think and Act
Recruiters also need to understand that there are three things that all smart, savvy candidates do:
Here are some common scenarios in which recruiters will have to negotiate candidate rates:
- Smart candidates are never first to reveal or share what their current salary or salary history is. Why? It weakens their negotiation position. How? What if they crush the interview, and the client decides they’re now willing to pay whatever it takes, even above and beyond their budgeted salary to get the candidate, but the candidate has positioned him or herself at a lower rate? Smart candidates recognize this opportunity.
- Smart candidates are always going to tell you they have other opportunities, and they’re going to tell you those other opportunities pay more and offer better perks than your opportunity. This is how they try to gain leverage. This may or may not be true however. Remember, they may just be posturing as part of their negotiation strategy to land the most lucrative opportunity. The purpose for this is to get you-their recruiter-to work nonstop on their behalf.
- Smart candidates will tell you what kind of money they WANT to make or would like to make.
- Candidate completes interview and states he or she want more money due to the role and responsibilities
- Candidate claims he or she received a counter offer from his or her current employer
- Candidate claims he or she received another offer for more money
- Candidate changed his or her mind on how much money he or she needs to earn and is simply asking for more money
- Candidate claims another vendor submitted his or her resume to the same job for higher pay rate
Whatever the candidate’s reason is for wanting an increase in the pay rate or negotiating on other terms, I suggest you follow the pay rate objection and negotiation resolution model. This is a framework you can follow for effectively addressing and negotiating candidate pay rates in order to reach a win-win negotiation. As you will notice in the diagram, step three is for the recruiter to position the value of their offer. What this means is the recruiter needs to share with the candidate what he or she stands to gain by accepting their opportunity. This may include the pay rate or salary, health insurance and other benefits. The value the recruiter positions really comes down to how well the recruiter understands their candidate's compelling event and motivators for leaving his or her existing situation and considering your opportunity as well as their decision making process. Perhaps the work environment, hours or commute is really important to your candidate. The point is you need to review your notes and make sure that you understand what is most important to your candidate that is equal to or greater than the additional amount of money he or she is asking for.
Going Silent in Negotiations
Silence can be an effective negotiating tactic. Going silent acts as a black hole, just waiting there for someone to fall into. Most people get uneasy with a long, uncomfortable pause and silence. When the recruiter goes silent when negotiating, candidates tend to want to speak to break the silence. The things they say to break the silence often are statements in which they make concessions or weaken their position. Recruiters need to recognize this and act on it. On the flip side, it is important that when recruiters go silent that they are not the first to speak. The idea with going silent is, after you make your offer or position the value your opportunity has to offer, you go silent and remain silent until the candidate responds. The key here is you can’t speak before your candidate. If you speak before your candidate, then you effectively negate the offer you just put on the table, and the candidate will expect you to sweeten the offer you just made. So if you use this tactic, you must be comfortable in remaining silent.
Keep in mind that there are no “winners” or “losers” in a negotiation. A negotiation should be a win-win solution. That being said, recruiters need to understand that they should never give something up without getting something in return. The challenge, however, is figuring out what to ask for in return. Remember any increase in pay rate you offer represents a transfer of profit from your company and your commission to your candidate. To help you plan what you want to ask for, you can use a negotiation trade off sheet. Taking the time to complete a negotiation trade off sheet will significantly increase your effectiveness in trading equal profit for profit when negotiating candidate rates.
Six Rules to Running an Effective Candidate Negotiation
When it comes to candidate rate negotiation, there are six key rules to live by. Before you go into any candidate negotiation you need to understand and be prepared with the following.
- Never give anything without getting something in return. Always ask for something in return when you give or make a concession.
- Only negotiate with those who have the power to say yes.
- Only negotiate when the candidate is ready and able to commit and accept what it is you have to offer. Do NOT attempt to negotiate before the candidate can commit.
- What concessions are you willing to accept? You need to think this through and make a decision before you go into your negotiation.
- What do you want in return for what you are going to give?
- You must be willing to walk away. If you are not ready and willing to walk away from a candidate and/or deal, then you are not ready to negotiate.
What is your strategy for running a successful candidate rate negotiation? What have you found that works most consistently? What do you find most challenging? Let's start a conversation in the comments section below.
Looking for additional insight into interviewing candidates? Download the eBook titled "Executing the Candidate Interview, Five Pillars to Effective Qualification."