Job Offer Negotiation

By Frank Mulligan ñ Accetis International, Talent Software & Recruit China

A salary negotiation is one of those processes that can continue indefinitely, but only with rapidly diminishing returns for both sides.

My normal recommendation to candidates is to keep it short and professional, and the same goes for HR. This equates to HR presenting an initial offer, the candidate presenting a counter-offer that covers all the issues they seek to resolve, and then closing at the next counter-offer from HR. Any more negotiation than this and you are looking at a failed process that leaves a bad taste in the mouth.

Unfortunately, this extended process is relatively common amongst younger candidates who feel the world revolves around them, and their multiple job offers. It is also common among people who are unprofessional in their approach, and clearly not negotiating in good faith. Line managers in search of the holy grail of the perfect candidate, at cut price rates of course, can also follow a similar downward spiral.

So itís not just candidates.

End of Negotiations
Ideally an optimum time for a salary negotiation could be determined. Itís a nice thought to consider. If you were monitoring the situation constantly, from the HR side of the fence, you would know that the time is right to stop negotiating.

You would, wouldnít you?. Then youíd insist that this is your companyís final, final offer.

Probably not. The truth is that only a professional negotiator can monitor all of the factors in any given negotiation process. The rest of us amateurs need to determine beforehand what criteria we will use to decide when it is that we will stop negotiating. So we need to set our criteria early.

The constituents of the compensation package on offer to the candidate are largely numerical and they can easily be written down as:

The minimum compensation items you think will close the candidate. The parameters of this will be defined by internal equity and the market rate for the position. Salary data in China is rarely a secret so you have to keep your offer within existing staff salaries. Or at least not too far outside.


The compensation items that you might have to offer and you can play with. These could include tax-free allowances, bonuses, training, overseas travel, company car, and so on. Once you can get past the basic hygiene factor of salary, and it truly is just a hygiene factor in China, you can often close the candidate by supplying the very thing they are looking for.

The commitments that you must have as a minimum, such as a two year contract, or re-location to your new factory in Shenyang.

As you negotiate with the candidate you can simply refer back to this list to see how you are doing, and what items you can add and subtract. Thatís the easy part.

Equity Balance
At the end of the job offer negotiation process the balance that should be achieved is between the financial and other monetary rewards that are on offer to the candidate, and the value-added that they bring to your company. Think of it as buying a product or service. If you had to pay for this service would you pay the price?, i.e. the salary that will get you the benefits this candidate offers.

But there are also non-monetary benefits that accrue to you from hiring someone. A strong candidate offers value over and above the position on offer. They can fill in gaps in management teams, get access to customers that have been closed off for years, or solve design problem that have seemed intractable to your existing team.

New employees can also coach existing staff and act as a leader or father figure. All of these issues need to be factored in and perhaps the best way to do this is just write it down. The title of the page would be ëWhat intangibles does this person bring to our company?

When the compensation package you are offering is low enough for you to want to ëbuyí the total sum of tangible and non-tangible benefits that the candidate offers, then you should sign. Hopefully it will be at a level that is high enough for the candidate to want to sign as well.

Email frank.mulligan@recruit-china.com
Frank Mulliganís blog - english.talent-software.com