Salary negotiation
Salary negotiation is the discussion between an employer and a candidate, or an existing employee, about pay and other terms before they are agreed. For a new hire it usually happens between the first offer and its acceptance.
What’s actually negotiable
Three layers that vary in flexibility:
- Base salary: usually the focus. How far you can move depends on the salary band and on what colleagues in the same role earn, so settle that before the first conversation, not during it.
- Variable / bonus structure: occasionally negotiable for senior roles. Less flexible at SMB scale because the structure is usually team-wide.
- Equity, signing bonus, start date, holiday: often easier to move than base. The total-comp framing matters here.
A negotiation that only looks at base pay misses the terms that cost you less and may matter more to the candidate.
How to run the negotiation as the employer
Decide the range, and who can approve an exception, before the first call. Ask candidates for their salary expectations early, and share your range at the same point, so a mismatch surfaces in week one rather than at offer stage. Expectations are a different question from pay history: what someone earns today tells you about their last employer’s pay policy, not about the value of this role.
Base your figure on the criteria behind the band, such as experience against the role’s requirements, and write that reasoning down. When the candidate asks for more, answer with what can move and why. A plain “no” with no explanation is the easiest way to lose someone you wanted. If another employer is involved, ask whether there is a competing offer rather than assuming one; the counter-offer entry covers what happens when the current employer tries to keep them.
The same logic applies when an existing employee asks for a raise. Your answer sets a precedent for everyone else in the band, so check it against what peers earn before you agree.
What EU pay transparency rules change
Directive (EU) 2023/970 gives candidates the right to receive the initial pay or its range for the position, based on objective, gender-neutral criteria, for example in the job ad or before the interview (Article 5(1)). It also states that an employer shall not ask candidates about their pay history (Article 5(2)). Member States had until 7 June 2026 to transpose it (Article 34), so the obligation reaches employers through each country’s national law. Check where your hiring country stands. The directive does not apply in the UK, which is not an EU member.
The honest middle
A reasonable negotiation has both sides showing some flexibility and landing within the band. In an illustrative case, a candidate who moves from €80k to €85k on a band that tops out at €92k is negotiating normally. If they need €110k, the role’s budget and their expectations don’t match. That says nothing about their ability, and the right answer may be a different role, a later conversation, or a respectful no.