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.