How to Make a Job Offer and Negotiate Salary For a New Hire
After a lengthy hiring process, you really, really, want the candidate to accept your job offer. And why wouldn't you? The cruel irony of staffing is that the recruiting process only happens when you are already overworked and understaffed.
When your job offer is rejected, it's frustrating. Some hiring managers feel personally rejected, while others feel embarassed to have "gone to bat" for a candidate, only to be rebuffed. It can feel humiliating to bet your internal political capital on someone who did not feel the same way about you. And even when you don't take the rejection personally, it's depressing and exhausting to even think about starting all over with the hiring process.
At the end of a search, after all the interviews are completed and once a finalist has been selected, most hiring managers are desperate to get back to their other work. And right then, in the very instant they turn their attention away from the hiring process, they unknowingly sabotage their chances of having their job offer accepted, because the end of the search is just as important as every other step. The last thing anyone wants to do at job offer time is to sabotage their odds. But very few organizations manage the job offer process correctly.
What Executive Recruiters Know
You're not the only employer in town. Any candidate strong enough to get one job offer can get two.
Each of the sixteen ways hiring managers snatch defeat from the jaws of victory fall into one of these four categories (with a corresponding blog post on how to handle it.)
Unnecessary Delays Making the Job Offer
A slow-moving hiring process is like falling out of a 60-story building. The first part actually goes surprisingly well...until you hit the ground. As the saying goes, "It ain’t the fall that kills you, it's the landing." In hiring, you think your process is fine...until it isn't. Time wounds all deals. The longer you take to hire, the more candidates' interest in your position falls. In many professional jobs, 10 percent to 15 percent of the best candidates drop out for every unnecessary week of delay.
Time passes very quickly when you are in control and someone else is waiting for you. A week passes and it feels like a day. But when you are not in control, and you are waiting for someone else, every day feels like a week.
Not Managing Candidate Expectations During the Hiring Process
Hiring is not like your other work. In your other projects, people notice every mistake and point it out. Every missed deadline gets the attention of upper management. Every failure has consequences. But hiring is like operating in a sensory deprivation tank. You get no feedback at all for long stretches of time. Until the very end, when things often go disastrously wrong.
The "normal" interview process almost always fails to meet candidate expectations. And neuroscience research shows that when our expectations are not met, "...our brain doesn’t just get slightly unhappy, it sends out a message of danger or threat.” My guess is that is probably not quite the candidate experience you were hoping to create.
Bungling the Steps Before Making a Job Offer
If you want to hire the best qualified people, you need to stop insisting on seeing someone’s salary history in your hiring process. Not in your ads, not on your applications, not in your interviews, and not when you make your job offer.
If you have not started your first round interviews with a field of at least six highly qualified candidates, you will probably find yourself coming down to the wire with only one viable candidate at offer time. That makes your hiring decision both simple and dangerously flawed.
Before the courtship phase of your relationship turns into a marriage proposal....hit the pause button. Check in with your candidate. Have a conversation about your expectations, and theirs.
By and large, great people have great references. At the end of a good reference call, you should feel more energized and excited about hiring the candidate. If you don't, it should be a red flag for you.
Beware of the zombie-like trance, and appearance of rational thought that an excel salary spreadsheet offers. Look up from your screen at the real live thinking human being you want to hire, and be sure you understand their expectations. No candidate ever wants to hear about "room to grow" in their future salary when you just offered them a lower present salary than they anticipated.
My father-in-law often said that, "Deals that don't happen quickly, usually don't happen." The longer I work in the executive search business, the more I value that advice.
Failing to Properly Set Salary for a New Hire
Many hiring managers struggle to find a framework to talk strategically about employee compensation. Fortunately, most compensation experts agree on what factors you should consider when making a job offer.
The smart assumption to make when interviewing candidates is that the best people will receive multiple job offers at the fair market rate for their skills. Your first salary offer sends a signal, don't assume every candidate will want to negotiate with you. Put your best foot forward.
Before you overpay for your next hire, or underpay and waste salary dollars on someone unqualified, you need to first understand whether you have a recruiting problem (you have not yet seen the right candidates) or a salary budget problem (you have seen plenty of candidates, but simply cannot afford to hire the right ones). How do you know whether your salary budget is unrealistic or whether you just have a recruiting problem?
When it's time to hire someone new, you are often unfamiliar with what to pay, or what the "going rate" is for those skills. And there is nothing wrong with not knowing. Not knowing is actually a good thing - you can be more open minded. But if you did estimate a low salary budget, be sure to interview people who can actually do the work, not just the people who fit the budget.
As a hiring manager, you now need to be ready to negotiate with equally well-informed job seekers. And while that may be unfamiliar territory, it’s actually good news. Credible, shared salary information helps to move the salary negotiation process out of the realm of hard-ball negotiating tactics and trust-damaging gamesmanship.
In hiring, market rate is the only true benchmark. The minute you forget that, you start overpaying your less valuable people, and your more valuable people start quitting to go where their skills are properly valued.
To get what you want from the hiring process, be attentive to helping the candidate get what they want from the hiring process. Remember that you are not the only game in town, and any candidate strong enough to get one job offer can usually get two job offers. To be sure your job offers are accepted, keep your focus on the hiring process long after you have selected your ideal candidate.
Hopefully this perspective was helpful to you. You might also be interested in our advice for:
And now that we've shared our best insights (gleaned from over 600 completed executive searches) into how to make a predictably successful hiring process, maybe you would like to take a self-assessment to see how your own hiring process stacks up? In 2 minutes you can assess the strengths and weaknesses of your own hiring process, right in the privacy of your own office.
You will also find other relevant information in our Resource Center.
One final disclaimer: This advice is primarily for professional hiring in a large metropolitan area. Our perspective is shaped by our work in a retained executive search firm, conducting searches for CEO and senior staff positions. We've completed over 600 searches for associations and other nonprofits in major metropolitan areas like Washington DC, New York, and Chicago, but not all of our advice will be relevant if you are recruiting for other types of positions in other job markets.
Topics: Negotiating Salary for New Hires