Last of three parts
In Parts I and II of Making an Offer That Sticks (see Are You Really Ready to Hire? and Are You Prepared to Sell the Job?, I covered some of the key things that a company must do to: a) set up a search for success; and, b) attract the top candidate to the position.
Despite best efforts, however, sometimes offer negotiations come to a fork in the road.
When tough hiring decisions must be made, keeping these considerations in mind can help you reach the right answer:
1. Consider going the extra mile
With the highly competitive nature of today’s talent market, it may be helpful to consider that adding on unplanned compensation can tip the “scale” in your favor.
Keep in mind that the cost of going the extra mile is almost always less impactful on a company’s bottom line than the cost of an empty seat in a key role for an extended period of time. This is especially true when you consider the drastic impact a single top performer can have on the accomplishment of your organizational goals.
Your search partner should be able to help you identify exactly what constitutes the extra mile. In certain circumstances, it can be elements completely unrelated to cash compensation that help you overcome a candidate’s objections or obstacles.
Examples of non-cash levers we’ve pulled in past situations include offering to pay for a candidate’s family to fly once a year back to their native state for special occasions; or allowing the candidate to work in a remote location for one month a year; or providing assistance with the costs of private school for the candidate’s children when the public option doesn’t meet expectations. On the other hand, cash as they say is king, so sometimes the best example of “going the extra mile” is to simply sweeten the cash pot offered to the candidate.
While internal metrics should not serve as handcuffs when trying to hire an important executive, there are mechanisms that provide the candidate with the necessary cash increase while at the same time preserving (or not dramatically destabilizing) internal metrics.
For example, we have on multiple occasions utilized signing bonuses which pay out in equal installments over a two or three year period in order to increase the fixed cash portion of a candidate’s offer while keeping his salary in the ballpark of his peers. Choosing to pull one of these levers can often times be the difference between an accepted and a rejected offer.
2. Know when to move on
Despite best efforts, there are situations in which a workable offer becomes out of reach.
A decision to end offer negotiations should be done in coordination with your search partner. It should also be communicated respectfully to the candidate so as to preserve that relationship should you ever wish to revisit it. Openly communicating your decision also helps to avoid ill feelings that could do harm to your company’s reputation within the marketplace.
If it is time to move on, review your backup candidates with the help of your search partner before starting your recruiting efforts from scratch. The disappointment of a failed offer negotiation with candidate A often causes companies to ignore equally qualified and vetted candidates B and C, only to restart recruiting efforts and end up later with an average hire due to process fatigue.
Final thoughts
Your recruiter or search partner is your best resource for developing a reasonable compensation package designed to attract the top candidate in the field for your leadership position. Utilizing a recruiter from the beginning to develop a compensation philosophy will lead more quickly to your desired candidate and reduce the expenses associated with an empty seat in a key leadership position.
Companies should approach the offer process by ensuring positive sales-oriented messages about the position and their firm, keeping the lines of communication open with the candidate while the recruiter negotiates a mutually beneficial compensation package.
By making an offer that works on multiple levels, you can propel your company’s performance significantly in a single act.
This is excerpted from an ON Search Partners white paper titled Making An Offer That Sticks: 7 Strategies for Closing The Deal with Top Talent.