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Admit it. How many times have you as a hiring official simply inquired about a candidate’s
current or desired compensation and thought to yourself, "Great. The candidate will fit within
our compensation range." You then extend an offer only to see the candidate reject it. You’re
wondering, "What happened?"
Let me venture a guess. You thought if you liked the candidate and could exceed her current
compensation level, that would be sufficient for her to accept your offer. Nothing could be
further from the truth. Today’s market is filled with good talent and tough competition
from your fellow employers. Truly great candidates can find a job in any market let alone today’s
heated-up market. Even those quality resources "in transition" have multiple offers
from which to choose. Today’s employers will face difficulty securing the best talent.
During
this quarter, milewalk noticed a significant trend with candidates and job offers. They are
rejecting them at an increasing pace over past quarters. A recent survey of growing organizations
confirms this. This is a sign of what’s to come. Why?
More people are concentrating on a
broader set of criteria. Compensation is only one component. While this has been historically
true, it is more evident in the current job market. In the recent past, many employees were
frustrated with their employers. They would jump at the first sign of another organization welcoming
them with a higher salary. Now, employees can be more choosy. Not only has the market loosened,
but it has turned in employee’s favor.
What do candidates seek?
Most candidates seek more than a bigger pay check. They look for what
I call the Employer’s Value Package - those tangible and intangible reasons an employee would
choose or stay with an employer. While each person’s Value Package will differ in terms of
criteria and the relative importance of each criterion, most will include:
| Culture – What are the values and personality of the company? How does the company treat employees? Does the company foster a team-oriented environment? | Role/Responsibilities – What are my daily duties? How do they align with the company’s objectives and goals? | Professional Development – Is there a structured career development model that helps me grow professionally? Will my duties offer me an opportunity to learn? |
| Co-Workers – Who will I work with? Can I learn from them? Mentor them? |
Autonomy – Are there opportunities to be creative in my position? Will the company welcome my ideas? | Flexibility – Will I have flexible work hours or opportunities to telecommute? |
| Work Life Balance – What are the travel
obligations? Are the work hours unreasonably high? |
Compensation – What is the over structure
including base salary, bonus opportunity, stock, profit sharing, etc.? |
Benefits – Does the employer provide paid vacation commensurate with my level, healthcare and dental coverage, and 401K matching? |
What’s an employer to do?
While there are a host of activities employers
can do during the interview process to increase the probability a candidate will accept their
offer, two in particular will have the most impact: Ask and Advertise.
Ask – Obvious, yet very few employers do it (or do it well). You MUST ask the candidate
what motivates her. What does she need in her next employer? What are her most important criteria?
What are must haves vs. nice to haves? What’s missing in her current company? What’s
missing in her current role? Get this on the table in the FIRST discussion. An effective screener
can ask these questions. Once you know the answers, you are prepared to effectively perform
the next activity.
Advertise – Once you understand the candidate’s criteria, you can discuss and re-enforce
how your organization satisfies it. After all, what good is understanding her criteria if you
don’t take the opportunity to show her how well your company satisfies it? Make absolutely
sure that each interviewer in the process receives this information and sends the same messages
to the candidate.
You have decided you are a fit for each other and would like to extend an offer.
This is much more that filling out paperwork, signing, and sending it to the candidate. (It
becomes especially complex when you are dealing with senior executives.) To improve your probability
at this stage, there are several good tactics you can use to more effectively engage the candidate.
Appreciate
Candidate’s Criteria – This is your final opportunity to confirm the
candidate’s criteria and reiterate your organization’s commitment to satisfying
it. At this stage, it is also especially important to understand the candidate’s financial
criteria. Does she value bonus opportunity vs. base salary? Is she interested in trading salary
for company stock or profit sharing? Factor this information into your offer.
Treat Candidate as Teammate – Believe it or not, the candidate is interviewing you too.
If you approach this negotiation with a "Take it Or Leave It" attitude, she will leave
it. Remember, you are not adversaries in this negotiation. Everyone wins if the candidate accepts
the offer. So treat her well. If she doesn’t accept your offer, you have not only lost
the candidate, but also your most precious asset – your time.
Provide Candidate Some Level of Autonomy – There
may be appropriate instances, especially for senior-level resources, where the candidate would
like a different compensation mixture (i.e., different blend of base salary, bonus, stock). Offer
the candidate an opportunity to (re)propose a structure that would be more equitable for her. In
some situations, not uncommon for smaller organizations, the candidate may have more experience
with variable compensation programs than the employer does. Allow the candidate to provide some
creative input.
Give Candidate Appropriate Amount of Time – I am amazed (more like shocked) at employers
who want a candidate’s response in a day. This is a significant decision. Allow the candidate
a couple weeks to decide. It is a nice gesture to check in with her in a week to see if she
has any questions and discuss her thoughts. You can gauge how she’s feeling.
Granted, these activities and tactics may be more appropriate in some situations than others. The
main point is to take ample time to understand the candidate’s criteria so that you, as a
hiring official, truly appreciate her criteria and can emphasize your organization’s commitment
to meeting them. You will be much happier with the results. The candidates will too.
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Andrew LaCivita is the chief executive of milewalk, an executive recruiting and human capital consulting company located in Chicago, IL. He has consulted for over 70 companies throughout his career and publishes this free newsletter to the human resources community in hopes it will help you attract the top talent and improve your ability to motivate your employees. After all, as Jim Collins indicates in Good to Great…people aren’t your greatest asset, the right people are. For a more complete biography, please visit the milewalk website. |
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Thanks to those organizations who took us up on our offer last quarter. We really enjoyed helping you assess your compensation techniques. This quarter, milewalk is offering complimentary sessions on the most effective way to extend and negotiate offers. For more information on milewalk or to schedule your complimentary consultation, please email info@milewalk.com or call |
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