Negotiating salary is often one of the most delicate, and sometimes nerve-wracking, aspects of the hiring process. It’s like a three-way game of tug-of-war where all parties are trying to find that sweet spot that ensures everyone walks away happy—or at least, satisfied enough to sign on the dotted line.
So, how does salary negotiation typically unfold when a recruiting agency is involved? Let’s break it down step by step, with practical examples and some insider tips along the way.
Before negotiations even begin, there’s an important groundwork stage where everyone aligns on expectations. This involves understanding the salary range for the position and the expectations of all three parties: the hiring company, the candidate, and the recruiting agency.
- The hiring company typically has a set budget or salary range for the position. This is based on factors like:
- Industry standards
- The level of experience required
- The current market demand for that role
The company communicates this range to the recruiting agency and outlines any flexibility they may have in case the perfect candidate expects a little more.
- The recruiting agency’s role at this stage is to gather as much information as possible about the hiring company’s salary range, benefits, and expectations.
- They also speak to the candidate, asking about their current salary, desired salary, and career goals.
At this point, the recruiting agency knows that there’s a potential gap between the candidate’s expectations and the company's offer. This is where their negotiation skills come into play.
Once the recruiting agency has all the necessary information, the first round of negotiation begins. The agency will present the candidate’s expectations to the company, and vice versa. This is typically the first “soft” negotiation round, where each party tests the waters without making any final commitments.
- The hiring company usually makes the first move by providing a tentative offer, which includes:
- The salary
- Benefits (healthcare, 401k, etc.)
- Perks (remote work options, stock options, etc.)
- The recruiting agency relays the offer to the candidate, but they also act as a buffer, softening any blows or adjusting expectations.
- If the candidate’s desired salary is higher than the initial offer, the agency may already start negotiating on the candidate’s behalf, explaining the reasoning behind the offer.
"The company is really interested in you and has offered $85,000, which is close to the top of their range for this position. They’re also offering a generous benefits package that includes health insurance and stock options. I think we can work with this."
Now comes the main event: the actual negotiation. This part can feel like a tennis match, with numbers going back and forth between the company and the candidate, with the recruiting agency playing the role of mediator.
- The candidate will typically respond to the offer, either accepting, declining, or making a counteroffer.
- If they feel the offer is too low, they might explain why they believe they deserve more, often citing:
- Their previous salary
- Market rates for similar roles
- Their unique qualifications or experience
- The recruiting agency’s job here is to keep the conversation moving smoothly. They might advise the candidate to be flexible if the offer is close enough, or encourage the company to offer more if the candidate is a perfect fit.
- In many cases, the agency can find common ground by highlighting non-monetary perks, such as:
- Flexibility in working hours
- Professional development opportunities
- Signing bonuses
"The candidate has made a counteroffer of $95,000, which is based on their market value and unique experience in the field. However, they’re also very interested in the role, so if the company could improve the offer slightly or add a signing bonus, we believe they’d be happy to accept."
The company might not want to stretch their budget, but they could offer a $90,000 salary with a $5,000 signing bonus, effectively meeting the candidate’s demand without breaking their salary cap.
If the company can’t meet the candidate’s salary expectations, recruiting agencies often help bridge the gap by focusing on non-monetary compensation. Benefits and perks can sweeten the deal, especially if salary isn’t the only factor in the candidate’s decision.
- Common perks that can be negotiated include:
- Additional vacation days
- Remote working opportunities
- Professional development stipends
- Flexible working hours
- Stock options or equity
At this point, both parties are looking to finalize the deal. The candidate may still have some reservations, and the company might have limited flexibility, but the recruiting agency steps in to ensure both parties reach a mutually beneficial agreement.
- After all the back and forth, the company makes a final offer that is either accepted or rejected by the candidate.
- If the candidate accepts, the recruiter facilitates the final paperwork and contract signing.
- If the candidate declines, the recruiter either goes back to the drawing board or finds a new candidate.
Not every negotiation ends with everyone walking away happy. Sometimes, the parties can’t agree, and the recruiter has to manage that situation too.
- If the candidate declines the offer outright, the recruiting agency will usually work to find another candidate for the company.
- Alternatively, the recruiter may advise the company to adjust its budget or offer if it’s clear that they are consistently falling short of candidates’ expectations.
"The candidate has decided to decline the offer, but they mentioned that the salary range was the primary factor. Based on market data, we may need to increase the offer to attract top talent for this role."
Even after the offer is accepted, the recruiting agency’s job isn’t done. They often act as a liaison between the company and the candidate during the onboarding process and throughout the initial employment period to ensure everything is going smoothly.