When it comes to salary negotiations, applicants and potential employers know how to play it tough. What’s more, it’s also not unusual to come across competing organisations playing hard ball with each other in order to win over a candidate.
Jon Michel Executive Search was recently involved with placing a candidate in a buyside role, which saw the applicant’s salary increase from A$100,000 to A$200,000 (plus a bonus comfort was included).
A bidding war between two competing organisations was behind this candidate’s 100%+ salary increase.
Jon Michel, the founder of Jon Michel Executive Search says the competitive tension in the above situation was due to “a shortage of experienced candidates in that particular sector, the candidate having a good reputation and both employers really wanting to hire that individual.”
Angus Price from Derwent Executive has also witnessed incidents where organisations have counter-offered or engaged in bidding wars for certain candidates.
“When this type of situation occurs, total compensations have gone up by 40% to 50%,” says Price. “Normally, the largest component of this is in a guaranteed bonus because the relativities of base amounts can’t change too much.”
According to Price, corporate bidding wars are more prevalent on the sellside than the buyside.
Candidates call the shots
Candidates don’t only receive higher salaries from companies fighting over them. Michel recalls one situation where an investment banking candidate asked for a higher compensation package and the company agreed.
“The firm came to the party on condition that the candidate had to accept the improved offer and couldn’t use it as a way to get a better offer elsewhere,” says Michel.