Hiring a Person

Hey ya’ll! I just wanted to ask a flip-side of the question when it comes to employment and since I do actually have plans of hiring a new person. What do ya’ll do if a really good candidate negotiates for a way higher salary than your expected budget? Let’s say they’ve hit all the marks, have the credentials to back it up, would it be worth it hiring them considering the compromise getting them onboard brings?

Hope someone humors this random question, thanks lots!

Essentially it’s like any other transaction. You have to weigh up whether this person will add enough value to your business to make the extra cost worthwhile.

They can ask for more, but you can make a counter-offer, but just like when you buy a car, you have to be prepared to walk away.

We have done this, we typically hire them into a higher position than originally planned.

This is a given, I know that they have the necessary skill set for the position (a little overqualified imo) but we’re only a Medium-sized enterprise as of the moment and the budget is really tight. This is why I’m a lil’ hesitant.

Do you have other employees at the same position? If so, the large pay discrepancy between the new person’s pay and the current employee’s could cause friction.

It could also be bad optics if your current employees are of a race or gender that is historically discriminated against. For example, if you currently only have a female employee making X and you bring in a male making 2X.

In my experience people usually find out what everyone else is making. People talk, or eventually someone gets the wrong pay stub, or someone in accounting leaves a spreadsheet open on their laptop when they go to lunch etc. Most of my experience is in blue collar work though so your mileage may vary.

These might not be relevant issues at all. I just know that sometimes people get tunnel vision focusing on the bottom line, and forget to consider other things.

Oh my God, this is such a good point! This is why I love this forum :smiling_face_with_three_hearts:. We currently employ 90-100 people as of the moment but I really get what you mean, I’d be pissed too if a new hire in the same position gets a higher salary offer than me. This is something I’ll be talking about with my team, I don’t want to sound like I’m lowballing the person, but I also don’t want to cause any friction within the workforce especially at times like this when people can just have a separate group chat altogether. Thanks for the meaningful insight!

I’ve worked in HR for quite some time so I know how to pick the best apple in a given basket. We get those type of people every now and then–complete package, knows their worth, amicable, and wants upfront a negotiation on the salary-package even if it was on the job description itself. Its a risk, what a person is on an interview is (obviously) not a testament to their work ethic, even with all the credentials to back them up. One thing that you can do is settle with a trial month, we do this every so often with a new employee. We call it an onboarding and training process to see if they’d be a good fit. If they aren’t, we pay them a one-time salary offer and move on to the next person. One thing you can brush up on is your negotiation skills, try to read more on guides like this to make sure you adhere to the contract and persuade them to accept the set offer. Remember: you’re the one employing them, they can have requests but they can never demand something. So if you’re able to imply or tell them directly that this is as high as you can go, you can see if they’ll be a fit for your team. Hope this helps! Good luck bud.

Unless the position isn’t attracting any other good candidates, justifying a way higher salary would be difficult.

One time our M.D. group was prepared to hire a candidate, who felt that the usual hiring terms (working a few years at a set salary and then making partner) didn’t apply to her considering her experience and connections - she wanted to be a partner right off the bat. The group decided they didn’t need her that badly.

A lot depends on your business and budget. Then consider what comparable positions are like in your area. There is the possibility that you’ve under-valued the position – but there’s also the chance that this person is just a really good negotiator, in which case you could try to put that talent to work on behalf of your business, even if that’s not what the position was originally for.

If your candidate’s that fabulous… I’d be upfront with them and ask them to address the question from the point of view of the employer, as if it were their business. If you feel a lot of pressure and urgency to “act now or this great person will get away” – that’s a red flag.

None of us can possibly answer that question because we don’t know your company’s financial situation or what value this person might bring to your organization. Generally speaking, I wouldn’t hire someone asking for a salary far higher than I had originally budgeted. Sometimes you just have to settle for the 2nd or 3rd best candidate.

You know how to pick the best apples? What makes you different from everyone else who works in HR? :smiley:

I think HR needs to dispel with the notion that there is some “perfect candidate” out there who has the perfect set of skills and subject mastery, perfectly fit with the “culture” of the company, will be in the budget range they are willing to pay (usually less than what such a candidate will accept), and stay with the company exactly as long as the company wants them to stay. It’s all nonsense.

Companies never want to (or can’t) pay what it costs to hire the top people. So right from the start it has to be a compromise between “skills”, “attitude”, “fit”, etc. Even if someone was a stellar performer in their last job, there is no way to predict how they will perform in the specific dynamics of your organization.

And unless the person is a total asshole or idiot (which your hiring process should have weeded out anyway), what do you really learn in a trial month anyway? Whether they are carbon copies of people you already hired? If they can quickly learn new skills and subject matter that probably have nothing to do with what they thought they were getting hired for? If they can “unlearn” all their prior experience and do things the way your company does them?

In regards to the OP, my question would be why is this candidate’s asking salary so much higher than what you have budgeted? Or why do they seem to be at such a higher caliber than other candidates?

Appreciate all the comments here! Just a quick update: we’re still filtering through candidates, we’ve yet to find a better one compared to the person in my original post. I’ll try to take ya’ll messages into consideration when I bring the conversation to my team come Monday, because we’ll be needing a new person in the position no later than Wednesday! Fingers crossed :grimacing:

Solid advice, I wish I was as assertive as this lol. But definitely need to see if a trial could be something we can do. Thanks for the help!

This feels akin to our situation right now, some people just really have a way of persuading, don’t they? But I can’t really justify going over a budget just because of one person… thanks for the input!

Thanks for the input, that last line definitely sums up how I feel. I don’t wanna rush in into hiring someone which is why I took the next few days on searching on more candidates to no avail. The business is relatively flexible but the budget is generally allocated for marketing atm and the position we’re hiring for is on sales… so things are not looking all that ideal for us. The candidate is asking for 20% more than our max budget, which is 40% more than the actual offer :upside_down_face:.

This feels like the next best thing (literally lol). Out of everyone, this candidate was the only one who tried to negotiate the salary (which isn’t really a red flag, imo, but a headache nevertheless). Thanks for the input!

They’re definitely a higher caliber than the other candidates by a mile away. The position we’re hiring for is a senior sales position and they’ve ticked all the boxes of the ideal candidate. As I’ve mentioned above, they’re asking for 20% more of our max budget, which is 40% more than our actual job posting. We had posted an ad with a 20% room for negotiation, but this candidate still went beyond that. He has 11 years worth of experience in sales and management which make him really ideal for the position we want to put him in, but as mentioned above, he actually won’t be the only person taking that position and I honestly find it really bad that a new hire would have a higher salary than one of our tenured employees (6 years in a similar position). Idk, I don’t usually handle the hiring, but my co-founder is busy with acquisition and marketing which is why I’ve been catapulted to HR for the time being.

How much is this person actually worth to you? If they’re a really good candidate, then yes, they’re probably worth more to you than an OK candidate. But how much more? Decide how much this person is worth to you, and if you’re not able to negotiate them down to a number less than or equal to that, then you don’t hire them.

And don’t feel sorry for them. They must know that taking an aggressive negotiating stance has a chance of losing the job. Either they really are worth that, to the right employer, and so they’ll be able to land some other job that pays what they want. Or it’s their own fault for having such an inflated sense of their own worth that they won’t negotiate down from it to get a job.

My answer would depend on whether or not your budgeted salary is competitive with that position’s general market value in your industry. If what you are offering is markedly lower than the market value of the position, then I think you should be open to negotiating. On the other hand, if you are offering market value for the position, you should pass on that person because there is a good chance you will get another promising candidate for the position.

Hard to say whether 40% over, plus 20% over on top of that, is exorbitant or whether the position was so under-valued that all these boosts now bring it up to par with the industry, or the locale. When your tenured employee finds out that the new guy is making twice their rate they will be ticked and probably will start looking to leave. Maybe not immediately. You might have a year to salvage it unless they find something fast.

That will leave you with one new guy who’s making a pile, instead of one tenured employee who’s making a reasonable salary. If you try to achieve salary parity for both of them, that’s 40% plus 20% plus whatever percent raise you’ll have to give your tenured employee, that’s a lot of overage. The current arrangement also pits the two of them against one another to compete for the same finite pool of money, and rank as well.

The candidate should be asked how they be an asset to the company, or maybe say that the salary level they’re asking for is so far beyond a sales position, that they would need to take responsibility for the team rather than just themselves. Ask them to think about it and propose an equitable salary arrangement that takes their co-workers into account, force him to consider the workplace dynamics, instead of him making demands and leaving you to figure out how to make it work.

If they are so smokin’ hot that they can sell snow in Alaska in January, and they’re such a good manager that they can take a team of hyenas and turn them into tigers, then explore with them how they can help you build the company, and structure it so that their salary is tied to actual net revenue – and to employee satisfaction.

If you hire this guy in as your tenured employee’s actual boss, that could sting, and is kind of a Machiavellian move unless they’re assuming additional risk and responsibility to go along with it. That might be preferable if the new guy can really step up and make things happen. I still have a feeling that he’s out for himself, and you have to think about things like company loyalty as well as performance. You could sink all your budget into someone who’s nothing but a taker.

The good sales people I have known are usually driven by some form of motivation. That usually being money. If they know they are getting paid for their performance then they excel.
Problem with brining in a guy at a guaranteed compensation is what is his motivation? What happens when you hire this A+ on paper guy and he performs at the “meets expectations” level. Can you get rid of him since he isn’t the star he promised to be? Can you give him a pay cut to bring him back to his average performance? Probably not.

If this is for a sales position, is there not a commission component to the pay? All of the sales related positions I have ever had any knowledge were either straight commission or had a set (rather low) level of base pay plus a commission (% of sales, targetted bonuses, or some such) based on production. If this person really is a star performer, the extra money should be achievable through high productivity.

Sales person in a start up is a unique minefield. Going cheap on sales is a classic mistake, but so it blowing a bunch of money on a slick sales guy who doesn’t deliver. Both can be existential threats to a growing company.

And if you are a tech person and he’s a a sales person, this is not an equal fight. He’s better at this than you are, and there is really no way for you to know if he’s worth what he thinks. I’d focus on ways to figure that out that weren’t all from his PoV. If he’s going to be in a position to help you exceed your growth goals, might well be worth it. But if at the end of the day, he won’t sell more than someone cheaper, it’s a terrible idea. (Hot shot sales guys that are all hat, no cattle, are super dangerous).

Why would that make you feel bad? You should pay people based on how much value they bring, not just how long they’ve been at the company.

For this sales guy, wouldn’t most of his compensation be a performance-based bonus?