Year of the 5K: How Employers Can Avoid the #1 Salary Negotiation Mistake

By Devin Hornick on June 3, 2015 in IT Hiring, IT Salary


It’s no secret that the IT market is booming. Demand for top tech talent is sustaining its upward trajectory, especially in Southern California. Given the demand, it’s far from uncommon for candidates to receive 2-3 job offers at the same time. Though you want to avoid hiring purely money-motivated candidates, you can’t ignore the fact that money plays a key role in managing living expenses (which are significantly higher in California). That said, I’ve seen too many scenarios in which just $5,000 is enough to sway a candidate to accept a competitor’s offer.

I’ve nicknamed this year the “Year of the 5K,” and not because I’m committed to lacing up my running shoes and hitting the track. No, this is the Year of the 5K because I’ve never seen so many employers gain top talent over their competitors with relatively insignificant amounts of money.

At KORE1, we’ve spent the last several months talking about average salaries for IT professionals in the Southern California region, as well as discussing the growing talent shortage in our Southern California IT Salary Guide. While it’s essential to get a good sense of what the market looks like and establish an accurate compensation benchmark, it’s imperative to understand that within your four walls, you have a unique set of factors that affect recruitment, retention, and compensation structures.

This is the reason why employers need to get deeper than a basic compensation analysis to truly understand the interaction between the market, their company, and their candidates. Here are a few of my thoughts on the subject.

Getting Perspective on the Market

Unfortunately, truly excellent compensation analysis is a rare thing. I’ve seen many situations where the salary data only captures half of the big picture. No matter how many factors go into the comparison, the truth is that each individual company is completely unique. You can look at region, skill sets, experience level, industry, company size, benefit programs, job market predictions, and more, but while it is possible to establish valuable compensation guidelines based on these elements, the most forward thinking companies will maintain a certain level of flexibility.

Even more importantly, no matter how in-depth the analysis goes, it’s essential to understand the data from the perspective of demand. When demand is higher than the corresponding talent pool, common sense says it’s a candidate’s market. The companies that are more flexible when it comes to salary negotiation are the ones who will be able to maintain a competitive edge and garner the market’s top talent.

The Challenge of Internal Conflict

Many companies have a well-established policy when it comes to compensation structures. These policies are typically based upon gathered data from internal or third-party compensation analysts as well as the company’s history of salary benchmarking, and of course annual budgetary allocations.

I completely understand the challenge in tackling organizational politics in order to extend a candidate a slighter higher salary offer than would otherwise be typical for your company. Many of those policies exist for good reason, and you don’t want to risk offending existing employees who may have seniority.

But the question is, is it reasonable to lose top talent – not to mention spend more time and money in restarting the talent search – over just a few thousand dollars? If an organization is striving to maintain their competitive edge in their industry, isn’t that minor compromise worth it?

What Else Can You Offer?

A money-motivated candidate is one who is looking for at least ten or twenty thousand more than they’re currently making. Obviously, these are the candidates you want to be wary of hiring.

But for the candidates who are genuinely talented, passionate about their work, and excited about your company, any salary negotiation for just a few thousand more is not a red flag but an invitation. If, however, an employer is truly tied down in being able to offer more, the question becomes, what else do you have to offer?

It comes down to valuing the people who make up your workforce, and building your employer brand upon those values. Make sure you’re communicating your company culture as well as your entire array of benefits and perks. From excellent health insurance or tuition reimbursement to remote work opportunities or gym memberships, make it clear in every way you can that you take care of your employees.

The Bottom Line

It’s crucial to empathize with a candidate’s need to feel valued instead of marginalized by data, budgets and bureaucracy. It’s so important to approach compensation analysis from a perspective of demand – especially in today’s market where demand for top tech talent is exceptionally high, with no sign of letting up any time soon.

If you find the perfect fit for your organization, would you be willing to let them go over a mere $5k?


When the process of sourcing, recruiting, and hiring – not to mention salary negotiation – becomes too much of a burden, please don’t hesitate to reach out and let KORE1 help.