Don’t be afraid to talk about money among all the other elements of a job you may be considering. It’s just a factor, like commute or travel or relocation. It’s not personal. You may not get a clear answer – but get the topic out in the open.
Money is a taboo subject in many cultures, but it’s an important one to discuss in the context of hiring. No other subject causes as much angst among all the candidates we work with! A lack of transparency around money is the #1 frustration and also #1 source of wasted time for both employer and candidate or applicant. Here is some obvious, and not so obvious, fallout from a failure to address the topic of money properly.
- Wasted time – the most common source of frustration is finding out after multiple interviews that there is no way a deal can be done because the gap between available salary range and candidate salary requirements is too big to close. Multiple decisionmakers within the employer’s organization have spent expensive time interviewing a candidate who will never be hired; and a candidate has put forth effort and time in researching a potential employer and preparing for interviews, often including taking precious vacation time to interview. That is a very large opportunity cost for something that’s 100% avoidable!
- Missed expectations – beyond the purely practical considerations, we’re all human and have emotions. That feeling of “why did I bother” can damage the employer’s employment brand when a candidate has a bad experience, and do more harm than all the ra-ra HR-sponsored LinkedIn company posts can make up for. And equally, an unprepared candidate who tries to negotiate at the end with additional needs because they haven’t done their homework ahead of time pretty much guarantees they won’t get another shot at employment with that company, at least for a while.
- Employee turnover – When someone accepts a job for less than they were hoping to make, it doesn’t take a rocket scientist to know they may be more likely to leave that job for better opportunities.
- Lack of trust – Really, this is the underlying issue that leads to all the other problems. We all know, trust has to be earned but can be lost instantly; and money is a sensitive topic with the potential to destroy trust before it’s even been built.
Importance of Discussing Money in the Hiring Process
That’s why it’s important to encourage open and honest discussions about money in the hiring process. A transparent approach leads to a number of benefits, such as:
- Efficiency – Time is the one thing we absolutely cannot get more of. So, the biggest benefit is in the area of time management. Candidates can focus their energy on opportunities they know meet their pay expectations, and employers and hiring managers can make optimal use of expensive interview time.
- Good expectations – Having that all-important topic on the table allows everyone to focus on the substance of the process and actively engage without that mental reservation. This often completely changes the way the parties interact – we’ve seen it time and again.
- Reduced turnover – A clean and clear approach to money locks in a hire.
- Increased trust – When employees feel comfortable talking about money with their employers, it can lead to a more trusting work environment.
How to Encourage Open and Honest Discussion about Money
There are a few things that employers can do to encourage open and honest discussions about money in the workplace:
- Set a good example – Employers should be transparent about their own salaries and financial practices. This will show employees that it’s okay to talk about money in the workplace.
- Create a culture of trust – Employees need to feel comfortable talking to their employers about their financial needs. Employers can create a culture of trust by being open and honest with employees about financial matters.
- Provide resources – Employers can provide employees with resources to help them manage their finances. This could include things like financial planning workshops or access to financial advisors.
- Encourage open communication – Employers should encourage employees to talk to each other about their salaries and financial needs. This can help to create a more fair and equitable workplace.
It’s important to remember that talking about money doesn’t have to be awkward or uncomfortable. It’s just a factor, like commute or travel or relocation. It’s not personal. You may not get a clear answer, but it’s important to get the topic out in the open at least to avoid surprises.