Salary Negotiation Doesn’t Have to Be the Most Stressful Part of Hiring

For many managers, salary negotiation is the part of hiring that creates the most tension.

You’ve spent weeks interviewing. Your team is stretched thin. You’ve finally found someone you’re excited about. And now everything hinges on whether they’ll say yes to the offer you’re allowed to make.

It’s no surprise this moment feels stressful. Salary conversations sit at the intersection of budgets, fairness, expectations, and emotions, and most managers don’t have many chances to practice them.

A recent conversation with compensation expert and former Fortune 500 recruiting leader John Gates offered a helpful reframing: salary negotiation isn’t just an administrative step. It’s a leadership moment that sets the tone for trust, motivation, and retention long before day one.

Why Salary Negotiation Feels So Hard for Managers

On paper, salary negotiation seems straightforward. There’s a range. There’s a budget. There’s an offer.

In practice, managers are balancing a long list of pressures at once. Vacancies are expensive. Teams are overloaded. Leaders want roles filled quickly but also expect managers to stay within budget and make strong hiring decisions.

There’s also the personal pressure. Hiring the wrong person or losing a great candidate at the final stage can feel like a direct reflection on leadership capability. And unlike recruiters or HR partners, most managers don’t negotiate compensation often enough to feel confident doing it.

All of this makes salary negotiation feel high-stakes and uncomfortable, even for experienced leaders.

The Risk of Waiting Until the Offer Stage

In many organizations, compensation isn’t discussed meaningfully with a candidate until an offer is made. At most, candidates are pre-screened to ensure they’re “in range,” but the real conversation happens at the very end.

That timing creates unnecessary risk.

John recommends discussing compensation shortly after interviews, once candidates understand the scope and complexity of the role, but before formal offer approvals begin.

Framed well, the conversation sounds less like negotiation and more like alignment. John suggests language like:

“We’re moving toward a final decision. Before going through approvals, it’s important to understand what would make this a yes for you.”

This approach reduces surprises, avoids wasted approval cycles, and reframes the conversation as collaborative rather than transactional.

Understanding What’s Fixed and What’s Flexible

Most managers operate within real constraints. Internal equity matters, especially on teams where multiple people do similar work. John notes that offering significantly more to a new hire than to a strong, experienced team member often creates long-term problems.

That said, base salary is rarely the only lever available.

Compensation is a system, not a single number. Depending on the organization, flexibility may exist in:

• Signing bonuses

• Performance or milestone bonuses

• Incentive plans

• Equity grants

• Title, scope, or reporting structure

• Start date or onboarding expectations

  
  

John reminds us that bonuses, in particular, can help close gaps without creating permanent inequities. The key is knowing before negotiations begin what levers are actually available and where there is no room to move.

This preparation allows managers to negotiate with clarity instead of improvising under pressure.

Why the True Top of the Range Is Rarely Shared

One counterintuitive insight from John is that most companies rarely hire at the very top of a salary range, and for good reason.

The top of a range exists to allow room for growth, raises, and recognition over time. Starting someone there limits future flexibility and creates downstream challenges.

For that reason, many organizations share a narrower, more realistic range with candidates early on. This isn’t about being misleading; it’s about setting expectations in a way that allows for a positive close later.

When an offer ultimately exceeds expectations even modestly, candidates are far more likely to accept.

The Equity Ripple Effect Managers Can’t Ignore

John points out that every exception made in a negotiation has an impact beyond the individual hire.

Extra vacation days, remote flexibility, or informal agreements can raise fairness concerns. When inequities are perceived, motivation often suffers.

Research and experience both suggest that when employees believe someone else is receiving the same reward for less input, they adjust their own effort to restore a sense of balance. This dynamic makes managers understandably cautious about exceptions.

Flexibility isn’t the problem, says John. The challenge is ensuring that any exceptions can be justified, explained, and aligned with team culture.

A Practical Way to Avoid Endless Negotiation Loops

One of the most effective techniques John shared is pre-closing or having the negotiation before the offer is finalized.

Instead of presenting a single offer and waiting for a response, managers can:

• Walk candidates through a few realistic compensation scenarios

• Ask which options would work for them

• Confirm that approval of one of those options would result in a yes

  
  

This shifts the dynamic from guessing to collaboration. When the offer arrives, it’s not a starting point; it’s the conclusion of a shared problem-solving process.

For managers, this significantly reduces uncertainty and back-and-forth.

Why Lowballing Talent Almost Always Backfires

Even in tight labor markets, trying to “get a deal” on talent tends to create long-term costs.

John explains that when people feel undervalued, they disengage faster, continue looking, and leave as soon as a better opportunity appears. The time and expense of rehiring often far outweigh any short-term savings.

Paying fairly, and toward the higher end of what’s reasonable, often has the opposite effect. People feel trusted, valued, and motivated to deliver. Compensation becomes a signal of confidence, not just a transaction.

The Leadership Reframe That Changes Everything

Salary negotiation doesn’t have to feel like a tug-of-war.

When managers treat candidates as collaborators and view internal approvals as the real constraint, the tone of the conversation changes, and the focus shifts from “winning” the negotiation to building a strong working relationship from the very beginning.

Handled well, salary negotiation becomes what it should be: not a barrier to hiring, but a foundation for effective leadership.

Listen to the entire episode HERE to learn more about negotiating salary and compensation packages with candidates.

Keep up with John Gates

- Connect with John on LinkedIn: https://www.linkedin.com/in/johngates-salarycoach/

Guest Bonus: Free PDF download of Chapter 5 of his book: Use a Range, not a Number.

John is providing members of podcast+ a PDF download of Chapter 5 of his book: Use a Range, not a Number. In this chapter, he provides actionable advice and plug-and-play scripts for how to talk about a salary range so you avoid getting screened and don’t end up leaving money on the table.

Check your email or log in to the member site for more details.

To get this bonus and many other member benefits, become a member of The Modern Manager Podcast+ Community.

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