The Bidding War in Recruitment Is Real—How to Handle It During Hiring?

Who Holds the Power?

With the ongoing labor shortage, talent has the upper hand in negotiations. Salary bidding wars are a reality, and our expert, Nicolas Liénart, Senior Director of Talent Management, shares proactive solutions to navigate this challenge without putting your business at risk.

The Risks of Salary Bidding Wars

The biggest pitfall of overbidding is its long-term impact. It’s essential to set clear limits and ask yourself: “Is an employee solely motivated by salary really the one we want to retain?”

Nicolas advises employers to think beyond a candidate’s current skills and assess their long-term potential. A $5,000 to $10,000 salary increase for a $160,000 position isn’t a dealbreaker. But the same increase for a $60,000 role? That’s a 10% jump! “If a candidate is asking for a salary at the top of your range but is 400% motivated—go for it!”

However, companies must ensure they have the financial capacity to do so without disrupting internal pay equity. Large, structured organizations with strict salary scales have less flexibility and prioritize fairness. The same applies to small businesses—losing control of payroll expenses can be damaging in the long run.

How to Prevent Salary Bidding Wars?

The best way to counter overbidding is to highlight your uniqueness and employer brand to attract motivated candidates. Here’s how:

• Be transparent about career progression and salary scales.
• Offer benefits and growth opportunities instead of simply increasing salaries.
• Show candidates a clear path for professional development within your company.

From the start of the hiring process, set your salary range and leave room for the candidate’s future growth. If they reach the salary ceiling too quickly, they’ll start looking elsewhere.

Money Isn’t Everything!

A crucial point to remember: when an employee gets a raise, they quickly adjust their lifestyle, and within two months, that increase is forgotten. Soon after, another salary request may follow.

One approach is to tie compensation to performance-based bonuses. Offer a solid base salary but include clear, achievable targets for higher earnings. This way, employees understand that salary growth comes with effort and results.

Additionally, compensation isn’t just about salary. Highlight other benefits, such as career growth, flexibility, wellness programs, and company culture—these factors play a significant role in long-term retention.

Stay True to Yourself

At the end of the day, your goal is to maintain a strong employer brand that your team fully supports—without jeopardizing your company’s future. Act fairly, stay within your financial capacity, and ensure long-term stability.