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Negotiation tips when hiring
Think beyond money to find the best candidate. Flexible working, professional development and culture can be huge draws.
Know what will work for you, and set a limit. Understand and speak to the candidate’s motivations and goals.
How to negotiate well
“It’s important to know the ins and outs of the job market for your industry,” says Ashlea Maley, Senior Employment Relations Adviser at Employsure. “Job candidates are incredibly savvy. Knowing how your offering compares with other businesses can put you in a stronger position to attract top talent.”
To bring in strong candidates and make negotiating easier, establish a connection between your business and what potential employees value.
“Let your prospective employee know there’s more to working with you than the deal on the table. Share the story of your business, and why you do what you do.”
Also find out what prospective employees care about. “Spend a lot of time asking questions and listening to their perspective so you’ll be better equipped to negotiate,” says Maley.
Maley advises asking:
- where the candidate is in their career
- what motivates them
- why they want to join your business.
For example, some candidates may value seeing how your job will help progress their career. Others may value flexibility around location and hours.
Consider a conditional job offer, eg subject to reference checks. This gives you time to confirm they are the right fit.
Once a candidate accepts a job offer, they become your employee with certain rights. All negotiation must be done in good faith, for the employer and the employee, when discussing the specifics of a job. Employment New Zealand has more information about what you need to do.
Offering and negotiating employment agreements(external link) — Employment New Zealand
Know your limits
Negotiations can be clouded with emotion. If a candidate is good at negotiating, they may convince you to make an offer that doesn’t work for you.
Think about what you can manage and work within these limits. You are less likely to be persuaded into something you regret. If a candidate makes an unrealistic counter-offer, you can reply with conviction.
Maley recommends forecasting the cost of your new employee versus the extra income you hope they will bring in. Include pay packets and any perks, paid leave, and the cost of recruiting and training.
Also think about any new equipment you may need to buy.
“Maybe a computer, desk, chair, or phone? Or maybe the new employee needs a work van and equipment? This is common for plumbers, electricians, carpet cleaners, and pest control, where you need to put the new employee out on the road to generate revenue,” says Maley.
Check the cost of your new employee. Can you afford to hire them?
Think beyond pay packets
Money isn’t the only reason people take a job. There are other things you can put on the table that can help attract and retain good employees.
Perks
You might offer extras such as:
- subsidised gym membership or health insurance
- work vehicles for personal use
- discounted products or services
- donations to a charity chosen by your employee.
Be aware, perks may mean you have to pay Fringe Benefit Tax. This can be expensive. Look into what each perk might cost you in tax. Offering a higher salary may be more cost-effective in the long term.
Flexible working
This can sweeten the deal if beating or meeting market rate is a problem. Even if you can pay well, people find flexibility around when, how and where they work hugely motivating.
Consider offering one or more of these flexible working options:
- flexible hours
- remote working
- extra days’ leave, or leave without pay.
Professional development
Learning opportunities are an attractive prospect for many. SEEK data shows career development is the number one driver for graduate candidates.
“Employers that demonstrate a genuine commitment to training their people, and helping them adapt in a fast-changing economy, will have the edge when it comes to talent recruitment and retention,” says Shay Peters, New Zealand Director of the recruitment consultancy Robert Walters.
Think creatively. If you can’t afford to pay for formal training, eg courses and workshops, the chance to shadow or be mentored by you, or another employee may appeal.
Point out:
- how your job might progress the candidate’s career
- how the role will expand existing skills and help build new ones.
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