Negotiating compensation can be difficult, especially for your remote employees.
Remote work is on the rise. More than ever, organizations are digitizing their internal communications by implementing tools like Slack, Zoom, Google Hangouts and more. Because of this new technology, workplace discussions can be expanded beyond a traditional business meeting.
When it comes to salary negotiation, an often sensitive subject, email can be used to start and end a conversation. But for some subjects ‒ especially negotiating an employee's salary ‒ email won't suffice, and in a distributed work environment, the medium is just as important as the message.
So, how does an employer handle the conversation? How can employers balance their organizational needs and their employees' worth? Continue reading for tips on how employers can negotiate salary. Some of the tips below also apply to salary negotiations for job candidates, too.
Be open to video chats.
Email can be a useful tool, but it can be limiting in some respects. Delayed responses can slow progress on time-sensitive projects, and text-based communications can be misinterpreted.
Ricardo Baca, founder of Grasslands: A Journalism-Minded Agency, stressed that you shouldn't discuss "the meat" of the salary conversation over email.
"However, I don't think there's anything wrong with the employee starting that conversation over email," he added. "Of course, these conversations are best had in person, or at least on a video call."
Debbie McHugh, chief of staff at Grasslands, similarly discourages employers from exclusively using email to negotiate salaries. "It's on the employer to take the conversation offline," she said.
For one, text-based, or even audio-only, communication doesn't reveal a person's facial expressions, adding further distance between the employer and employee. Nonverbal communication can be critical to negotiations.
"Body language is so incredibly important," said McHughs to business.com. "You can't see that person's face sink or their shoulders slump or the smile on their face if you're just over the phone or over email."
Recognize your employee's worth.
Before diving into salary negotiations with the employee, reflect on how much value the existing employee (or the new candidate) adds to your organization.
It helps to ask yourself some critical questions prior to engaging in a conversation. What value does the employee bring to the organization? What would it cost you if you had to replace this individual? How can this negotiation opportunity benefit your organization's culture?
"You don't want to undervalue the person you hire, even if you get the rate you want," said Stefanie O'Connell Rodriguez, founder of Statement Cards. "You want them to feel valued. It's not a win to lowball somebody. It has to be a win for them, too."
As part of your assessment of the employee, be accepting (within reason) of their shortcomings, if there are any, and balance your assessment by examining their ability to overcome those shortcomings and/or if or how they have recovered from past mistakes. It's unrealistic to expect perfection from an employee, but it's also important to consider their performance.
Identify the salary range.
From her experience managing teams at a PR agency, McHugh recommends that employers ask job seekers for their desired salary range upfront. She also advises that employers pose the same question to existing employees. That way, everyone is on the same page, and there aren't any mysteries during the negotiation process. It also saves everyone's time and energy and reduces confusion and frustration later in the negotiation process.
Communicate clearly and directly.
Transparent communication is critical in salary negotiations and workplace culture generally. When employers are upfront with employees, it supports healthy morale. It also helps set clear expectations. Transparency also minimizes the risk of misunderstandings so that problems can be solved before they become major crises or lawsuits.
Name your expectations.
McHugh encourages employees to be upfront with their salary expectations.
"It should never be a surprise when you get to negotiating a salary," she said.
In Colorado, as of Jan. 1, 2021, employers must include the salary in their job postings. According to the National Law Review, Colorado employers are required to inform their employees of any "promotional opportunities" as well. This rule applies to remote work.
"The more transparent we can be, and the more we can manage expectations and be honest with our future and current colleagues, we're only going to save everyone time, headaches, and frustration," said Baca.
Understand your financial capabilities.
As you're navigating negotiations with an employee, it can be helpful to perform an assessment of your financial capabilities. On a piece of paper (or worksheet), create two columns: Under the first column, list the benefits you can provide. In the second column, list the items you can't currently deliver on. For instance, you might not be able to provide a raise of more than $5,000, but you might be able to provide more paid time off or flexible hours.
McHugh added that while it's critical to know how much you can and can't afford to pay someone, it's also helpful to know what nonfinancial incentives and benefits – such as a signing bonus, an extra week of vacation, etc. – you can provide to the individual.
"It's not just about the salary, it's about the benefits package," McHugh stressed.
Do your research.
Perform a deep dive into what other companies pay for similar jobs, and contextualize the data for your organization. This can be helpful in several ways. For example, your research can help you maintain a pay scheme that is up to date with current trends (or provide competitive benefits), which can help your company keep valued employees. Second, it's an opportunity to compare the individual's job description against the descriptions posted by other companies and fine-tune the employee's tasks so they align better with what professionals in similar roles are performing. Third, thorough research can ensure you extend a fair offer to candidates, which helps you hire well-skilled individuals.
Salary negotiations can be involved. An employee may have a counteroffer to the employer. Sometimes the ask might not be realistic for what the employer can afford. However, this doesn't mean negotiations are at a dead-end.
Finding middle ground between what you can afford and what your employee is saying they need can help you reach an amicable settlement while maintaining the relationship.
"If the number is beyond my means as [to] what I can afford to pay, then what I try to do is deconstruct their services to find a place where they feel valued for their time, but I find a solution within my budget," said O'Connell Rodriguez.
Additionally, O'Connell Rodriguez said that some job duties can be redistributed to another employee, or the employer, if the budget doesn't meet an employee's needs.
Salary negotiations can be a sensitive subject, for both employees and employers. It's important to stay calm throughout the process.
"If you know a challenge is coming, you can be more mindful about increasing your efforts to stay calm," writes David Sluss, associate professor of organizational behavior at Georgia Tech Scheller College of Business in Harvard Business Review.
One thing to keep in mind that can be helpful throughout the salary negotiation process is that it can be an opportune time for a genuine expression of gratitude to a new or existing employee.
Even if you can't fulfill all of their expectations or meet their needs, it is a chance to slow down and reflect. Ask yourself: What steps can be taken so that everyone's needs are met and everyone feels fulfilled in the end? Don't expect to have all the answers right away, either.
"Engage patiently, and you will see increases in your reports' creativity, productivity, and collaboration," said Sluss. "Rush and, sadly, you won't see many benefits."
Live your values.
Many organizations are adopting value-driven actions, inspired by Simon Sinek's canon of work around finding your "why." Value-driven actions can occur in salary negotiation conversations.
For example, when negotiating with new contractors, O'Connell Rodriguez includes links to her work so they better understand the values and scope of her organization. "I do run a company that has a very clear point of view and a very clear mission, and if someone isn't on board with that, then I think it's going to be tricky to align on making that mission a success," she explains. "I have a strong point of view in what I'm creating."
Email salary negotiation for employers doesn't have to be complicated or even stressful. Digital communications don't have to hinder but can enhance the conversation for employers and employees alike.