Tuesday, August 21, 2012

When to Talk Salary with Potential Employers

As a small business owner, the extensive hiring process begins with posting a job opening, then reading through several cover letters and resumes, setting up and going through interviews, and finally selecting the perfect candidate. This can be a lengthy and draining part of your job and throughout this time, the position’s salary is always on your mind. It’s likely to come up several times before the position is filled. So you may be wondering: When is the best time to reveal the salary? Should you list it in the job posting? Wait until the face-to-face interview? Or until a job offer is made? Should you have one set number or should you choose a range of hourly or yearly rates?  This all depends on your type of business and the position itself, but here is research had to say.

If you post the salary in the job posting, people may be willing to settle for a lower salary if they believe it is the right job for them. But some applicants won’t want to waste time applying for a job with too low pay. If it’s below what they’re looking for, they would want to leave when a better paying offer comes along, so why bother applying? On the other hand, people with less experience than you need will see a high salary rate and apply for the job anyway, just in case you will choose them. They may exaggerate their skill set and you could end up with someone who isn’t qualified. Some employers ask for salary requirements on the application to reduce the number of candidates by finding out the applicant’s expectations and experience. But asking for salary history may scare away applicants because they will feel you will offer them the lowest amount possible based on their previous positions. (There is a big difference between salary requirements and salary history). If you don’t post the salary this early on, it will give you more flexibility in the range of candidates. You will also avoid showing up in salary survey websites and being compared to your competitors.  When the salary isn’t revealed in the posting, some applicants have no problem sending a resume to that company, while others feel they don’t want to waste time filling out long applications and assessments if the salary turns out to be too low.

Also remember that if you post the salary in the job listing, the previous person who held that position may feel cheated if you post a higher salary for the same work they did. You may be upgrading this position to be more advanced, but they won’t know that, and when they find out about this, it could negatively affect your company.

Revealing the salary in the interview has advantages and disadvantages. It might be good to do t the experience level of the candidate is too high for the amount you can offer and you want to find out if they are willing to accept a lower amount.. You may decide you want to tell each candidate what the salary will be to gage their reactions, consider their negotiations, and further narrow down the pool of candidates. But you may also decide to let only the candidate you are sure you will hire know the salary so you can adjust it according to their skill set.

Waiting until a job offer has been made to reveal the salary is a risk that may or not be worth it. If the person chosen negotiates with you, you can decide to adjust the salary accordingly, and most applicants won’t do this until they have received a firm offer. However, keep in mind that just because their past salary was a certain amount doesn’t mean they are looking for a range anywhere near that-- especially true of recent college graduates. They invested a great deal of money in their education, so they should receive some of that investment back for their hard work. (They need to pay off that investment after all). You should also account for geographic areas and be open to a few different options.

Ultimately, it’s up to you to decide when and how to reveal salaries for open positions. But you should have insight into the topic to help you make better informed decisions. Make it happen!