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Is it acceptable for potential employees to ask for more pay?
It’s certainly acceptable, but the employer doesn’t have to agree.
If a potential employee asks for more pay, it may be because they consider themselves to be highly qualified and therefore worth more to your business. It makes no sense to hold this request against them, because they could be right.
The potential employee is only likely to ask for more pay if you’ve already offered them a job, or if they’re clearly the leading candidate. At this point, you will already have judged their suitability for the role, so it’s up to you to decide whether they really are worth the extra money, or whether you’d be happy to employ the second-best candidate instead.
Can an employer ask if an employee 'needs' a raise?
As part of salary negotiations, an employer may try to obtain some indication of how much a raise would mean to an employee. This will help them to judge what they should offer, based on how much they want to retain the employee's services. To put it another way, they want to know how likely they are to quit if you don’t get an increase.
Questioning whether they ‘need’ the money may be one way of trying to gauge their position, and there’s certainly nothing to stop them asking. However, an employee can interpret the question however they like, and they're certainly under no obligation to disclose personal financial information.
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