When you’re looking to hire your business’s next Finance Director, the issue of salary is extremely important. Salary negotiations for senior finance roles can often become a tug-of-war between employer and candidate.
The best candidates know their value, and they’ll never want to settle for anything less. But how much is too much? And when should you consider offering more in exchange for a better quality Finance Director?
The Importance of Salary
Rigidity with your Director of Finance salary can be great for narrowing down candidates, but it can also mean you lose out on some of the best Finance Directors around. You should put a lot of consideration into what salary you’re going to advertise for your Finance Director role before you start the recruitment process.
As much as you may want it, the fact is that you’re probably not going to be able to get the highest quality candidate cheaply. Finance Directors tend to be excellent negotiators who know their value. Candidates can be hard to budge, and require a good salary, as well as good bonuses.
In fact, the best Finance Directors aren’t actively looking for new opportunities. They’re happy in their current role, with a good salary and benefits.
For top candidates like this, you’re going to have to offer more than just a slight salary increase or better benefits to get their attention. You’re going to have to sell them the role.
Director of Finance Salary Range
So what’s the standard Finance Director pay scale? What can you expect to pay for a high-quality Finance Director?
Typical FD salaries run anywhere from around £65,000 to £120,000 and up, depending on the region and size of the business. That’s a huge difference. So how can you know what to value your FD role at?
You need to consider your budget, the size of your business and your turnover. Consider the function of your Finance Director. How integral are they to your business functions?
Base Start Salary vs Salary Increases
In 2018, Finance Director salaries are predicted to rise by 2.6%. You should consider the effect of potential salary increases in your recruitment.
For long-term senior roles like Finance Director, many candidates place their interest in salary advancement potential. This is why deciding upon a salary range is beneficial. During recruitment and salary negotiations it should be clear what the salary increase potential is, and how the candidate can achieve this.
Offering appeal through salary increases over a larger starter salary can be beneficial in motivating candidates to prove themselves. It can help ensure you’re rewarding your Finance Director for proven success.
However, some candidates won’t accept this, as many are more interested in immediate guaranteed salary. Promises of salary increases can be perceived as a risk. Finance Director candidates will want to minimise risk wherever possible when considering new opportunities.
Negotiation Skills
For senior roles such as Finance Director, you should expect to negotiate with candidates. It’s unlikely that you’ll see perfectly eye-to-eye on salary with your chosen candidates, so go in with a degree of flexibility.
Give a lot of thought to your criteria for flexibility. What features will your candidate have to possess to warrant a higher salary than you planned? What’s the risk/reward?
Finance Directors can be stubborn negotiators, so salary negotiations aren’t always easy. They know the best negotiation skills, so you need to be able to tackle them. The best candidates will always cost you, but at the same time you shouldn’t pay too much.
Benefits
Much of the time, the benefits of a role are what really sells it for a candidate over base salary. Offering a lower base salary is more likely to attract top candidates if you also offer excellent benefits.
Examples of potential Finance Director benefits you might consider offering are;
- Monetary bonuses for meeting targets/successful projects
- Company car
- Holidays
- Healthcare/insurance
- Family benefits
- Work-life balance
- Pension
For senior roles, many candidates want more than just money. Many senior candidates have families, meaning work-life balance, healthcare, and family benefits are important to them.
In addition, as the Finance Director role might involve regular travel, company cars, phones, and laptops can be a great benefit.
Know Your Stance
Ultimately, the challenge of successful Director of Finance salary negotiations comes from knowing your position of power in relation to your candidates. You’ve got to remain sturdy and show integrity, but at the same time know when not to let the perfect candidate pass by.
Headhunters can help you understand your candidate’s stance, and the possibility of them wavering. Pushing your perfect candidate too much for the sake of a slightly lower salary could be a poor decision, especially if quality Finance directors in your area are rare.
What Executive Headhunters Can Do
So is there any assistance available for this Director of Finance salary negotiation process?
Well, it depends what route you take in your recruitment. When working with headhunters or executive search firms, they will often assist with salary negotiations.
At Executive Headhunters EMA Partners, we’re experts at negotiating salaries for highly senior roles.
We take the wants and needs of both our client and candidate into account, acting as the negotiator to find a solution that pleases both parties. That’s why you can be assured that when working with us, we’ll find you the best candidates whilst keeping both you and the candidate happy.
The Executive Headhunters Salary Process
To secure an ideal final figure in salary negotiations, we employ a multi-stage process.
1. Scout General Salaries
As a result of our extensive experience recruiting for senior roles across the board, we have a strong pre-existing knowledge of average salaries. We understand the variation in salary based on several factors including location, seniority, FD responsibilities, company size, and many other important factors.
We can also conduct in-depth market research in order to find the general offered wages for FD role offers like yours, as well as average salaries of FD’s similar to what you’re looking for.
This process produces the best estimation of what you can expect to have to offer in order to attract the very best candidates.
2. Identify Client Wants
One of the most important parts of the salary negotiation process is determining the client’s wants and needs.
We work to make sure that you have a clear outline of what exactly you want from your candidates, and what you’re willing to offer to get this. This is part of our detailed discussion process with each client.
We strive to get to know our clients inside and out before conducting our search. This allows us to source the most ideal candidates possible for your opportunity.
3. Identify Candidate Wants
Once we’ve established the client’s wants and needs, we focus on those of the candidates.
We hold detailed discussions with each of our prospects to nurture them towards the client’s business and opportunity. In these discussions, we find out what the candidate is looking for in their new opportunity.
This includes what their desired salary is, how low they will go, and under what conditions. We can hold early negotiations at this stage to facilitate salary expectations, and use this to identify top prospects.
Using this information, we can start to plan approaches for salary negotiations and further nurture candidates towards the client’s salary range.
4. Negotiate Between Parties
The final stage of our salary negotiation process is negotiating the final figure between parties. When conducting the recruitment process on your own, or through a contingency recruitment firm, final salary negotiations will fall on you.
At Executive Headhunters we’re happy to conduct the final salary negotiations for you should you wish. We can act as the ‘middle-man’ to ensure both parties come to a fair agreement with no problems.
