Should I extend a job offer to someone who has salary expectations higher than our salary bands?

Yes! But avoid surprises: the candidate shouldn’t be surprised by a lower number, and you shouldn’t be surprised when your offer is turned down.

Salary expectations should be discussed at an early stage to make sure compensation is transparent from the beginning. If it's something the candidate can’t work with, they’ll withdraw and not waste their time (or your team’s time). But if they stick around to final stage interviews, you know there is something about the team or your mission that’s motivating the candidate and keeping them in the game. Some folks might be optimizing for learning, time off, or flexibility. Some folks will optimize for comp.

Cash compensation is just one factor in an offer. If you have pre-tax benefits (commuting, child care, healthcare), reimbursement for internet or home office equipment, or other stipends, the value of these perks may have more impact on a person’s take home pay than another 10k or 15k in base salary.

Each country has different tax rates, but I find it helpful to run the numbers through a take home pay calculator so you can see exactly what your candidate can expect to earn to in an average month. Here’s one for the USA, UK, and Germany.

Some people really value equity, other people view it as fake monopoly money, so that part of the comp package will also play a role. Sharing expected valuation of the equity offer, along with real number of expected take home pay, will help your candidates have all the data they need to make a decision.

Have a Management Query? Let me know at questions@lauratacho.com or on Twitter.