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5 Big Risks of Making Low Salary Offers

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5 Big Risks of Making Low Salary Offers


We are operating in an incredibly competitive market, more so now than ever before. We’ve seen many organisations lose impeccable talent due to not being able to keep up or deliver on package demands. Although candidates aren’t solely motivated by financial package, it can be a dealbreaker for many. 

The pandemic forced many professionals to “stay put” in their roles for fear of losing their job, but the by-product of this has been a lack of bonuses, salary increases, and general career progression. 

Now that the dust has settled, and the market has returned to normal, candidates are requesting higher uplifts on their salaries to make up for the lost time. 

Here are the 5 big risks that you’re taking if you make a low salary offer:

  1. You get what you pay for

The best talent is ultimately going to look for the best company to support them on their career journey. The more niche and experienced the talent is, the more it’s going to cost you as a business. 

If you offer a below-market rate, you will have to lower your expectations on someone’s experience level technically. Unless you have the resources in-house to upskill someone who is more junior, you are opening yourself up to having lower-quality talent in your organisation. 

  1. Demotivated employee

In some circumstances, offering a lower salary may enable you to still secure excellent talent, but they will automatically come into your organisation feeling demotivated or that they weren’t worthy of the initial package that they asked for. 

Not everybody is in a position to turn down an offer, and although the market is competitive, there will be some candidates who have no choice but to accept what you have given them. 

A demotivated employee from day #1 is difficult because they already have a bitter taste in their mouth about the organisation. And, getting them to a point of motivation and happiness will take you far longer. 

  1. Bad for employer branding

Candidates talk, and industries are smaller than meets the eye. If you are known in the market for offering below individuals’ salary expectation that news will travel fast and damage your employer branding. 

There are plenty of organisations who have fallen into the trap of not valuing their candidates at interview or offer stage, and it has made it incredibly hard for them to grow in a market where candidates no longer need to even consider organisations who won’t give them what they want.

  1. Impact on retention rates

If you have demotivated employees who are being paid under the market rate or are dissatisfied with their package, you may well be a stepping stone for them whilst they continue to look for their “forever” job. 

This creates a revolving door environment and can wreak havoc on your retention. This then feeds into your employer branding and reputation in the market, and can often cause irreparable damage.

  1. Bad for the business long-term

Although it may feel like a short-term gain securing talent when offering a lower salary, it will impact your business in the long-term for all the aforementioned reasons. When hiring and looking for talent, you always want to think about the long-term value and implications that it will have on your organisation. 

The cost of a mis hire and poor retention far outweighs the short-term benefit of saving some of your hiring budget.

If you’d like to discuss the current market rates, please don’t hesitate to get in contact with us directly.