Offering a job is the culmination of the “courting” aspect of hiring. You want to put your best foot forward, but ultimately, after any negotiation, you want to hear yes only if s/he really wants to work for your company. Otherwise, you risk a set-up for early turnover.
Do homework and manage expectations. Offers need to be set up at latest mid-course through the interview process. That’s when the specifics of a candidate’s present package and compensation goals need to be explored, and general expectations set both ways, possibly with the help of a competent search consultant who understands the needs of each side.
Offers should be further set up towards the end of the interview process by floating “trial balloons.” Again, if a good search consultant is involved, this is an ideal role for him or her.
Example: “How would you feel if we / they offered….”
In the process of offering a job, you need to address a candidate’s hot buttons, which should have been uncovered in the early interview rounds. An offer, verbal or written, needs to underscore the ways in which the candidate’s accepting the job will satisfy, or possibly satisfy in the future, his or her aspirations and needs (e.g. strategic importance of the position, challenge, earning potential, advancement, working environment, recognition, learning opportunities, etc.)
Offers reflect how a company does business. They can be classy or perfunctory, thorough or sketchy, on target or off the mark. A good offer process makes closing a whole lot easier. They can be made through any, or any combination of, the following:
- directly over the phone
- through a search consultant over the phone or in person
- in a meeting with the hiring authority, corporate officer and/or HR representative
- at a special occasion (e.g. dinner, dinner including significant others, etc.).
The level of importance of the position, the desirability of the candidate, the anticipated difficulty of closing the candidate, and the competence and strength of relationship with the search consultant are key factors in choosing among the above. All verbal offers need to be confirmed in writing.
Make a realistic offer that represents your best shot at meeting everybody’s needs. It usually backfires to “low ball” a candidate in hopes of saving money; and it’s not necessary to “give away the store” up front in order to avoid the risk of a refusal.
Offer letters should include a request for starting date. When decision deadlines are necessary (i.e. when you don’t anticipate a relatively quick response), it’s better to deliver them verbally:
“We’d like to have an answer by….”
Offers send messages. An appropriate offer well presented makes the candidate feel special, wanted.
Getting to Win-Win
Different people have different styles of negotiating. Negotiating seems for some to require its own set of rules, resulting in their approaching negotiation in ways they’d never approach any other type of interaction. Your most effective tool, besides listening, will be your intuition.
There are different types of negotiations; not one approach fits all. Negotiating a job offer with someone who will be one of your team members requires a less adversarial role than negotiating a price at a bazaar, or a cease-fire with an enemy. After a hire, you’ll need to pull in the same direction with the “other side” of the negotiating table.
The best environment for a mutually successful hiring negotiation is a positive, respectful one. When all parties want a positive outcome, it usually happens.
- Before entering negotiation, confirm for yourself the stands that are nonnegotiable, strong preferences and optionals. You may have to revisit these stands later.
- Study the terrain and conditions of the green before you putt. Learn as much as possible about the candidate’s positive and negative reactions to the offer. (You will have already determined his or her hot buttons before having presented the offer.)
- Know positioning, why your company and position are attractive, and different from other opportunities.
- Link requests, or refusals of requests, to benefits to the candidate as much as possible, e.g. maintaining a salary structure contributes to the team environment that’s so attractive, offering below the high end allows a far more significant raise later, not having the resources for the extra money helps us be more creative about these other perks or learning opportunities, etc.
- Focus on mutual gain.
- If you must draw hard lines, do so firmly, humanely, and in such a way that appreciates the candidate’s needs and viewpoint.
- It’s usually — though not always — unwise to bluff, for example, about a best and final offer if you know it’s really not. This creates cloudiness around limits, and opens future decisions subject to question or manipulation. If you need to bluff, be careful with your wording. In most cases, it’s best to use your tone to infer a sense of finality, as opposed to using terms in the absolute.
- Example: “Well, you’ve pretty much stretched us to the limit, and I think we’ve done all we can do. So maybe you need to think before you give a final answer. Let me remind you that…. [finish with selling to his or her hot buttons].
- If you sense you’re being bluffed, first try calling it in a gentle understanding manner.
- Example: “I hear you that you say you can’t accept only a 10% raise. I understand why you committed yourself to 15%. I see this as an understandable first reaction; and maybe you wonder if we can come up with more. But let me remind you that…. [finish with selling to his or her hot buttons].
- Separate issues from personalities.
- Remember communication requires, among other things, probing, active listening and reflecting. These skills can increase mutual understanding and cooperative spirit.
- If there’s a search consultant, work together to separate which issues should be dealt with through the search consultant, and which directly.
- Set aside unresolved issues briefly. Concentrate where you can make progress.
- If you feel frustration building, take a break. Put aside for later the issue, or conversation, generating the frustration. Then when you have a chance, write out for yourself the fairest, most articulate responses to what frustrates you.
- Try brainstorming out of the stall zone, first without the candidate, then possibly with. (See the list of Creative Solutions for Unresolved Issues to follow.)
Getting a commitment
- The last stages of negotiation often require a conditional, or “If…then,” commitment. A search consultant can be helpful in this procedure. It generally involves a best and final offer.
- Example: “If I can somehow manage to find the extra $10,000 and justify the higher title, do we have a deal? If there’s any chance, I could probably only get it if everybody knows your acceptance is attached to it.”
- Closing is equal parts making a persuasive case, and romancing. As mentioned in Effective Communications Skills, persuasion involves probing and listening as much as advocating. How much romancing is done will be a function of how much you want the candidate, the resistance of the candidate and the importance of the position.
- A good job of romancing can sometimes save many dollars in the negotiation.
- Romancing can be as simple as positive reinforcement, or as creative as you want to make it. Here are some examples of romancing:
- Different members of the hiring team call the candidate with encouragement
- Board members &/or Corporate officer(s) buy dinner for candidate and significant other
- Invitation to the candidate to attend a company social function
- Passing along a demo version of software for the candidate to play with
- Legal Seafoods delivers lobsters by mail (especially apropos for trying to relocate someone to New England)
- Red Sox, Patriots, Celtics or Bruins tickets
- When you receive a refusal to any offer, you have the option to come back with another, or to reopen negotiations. This may be worth while if you feel it’s a strong match, and you want to exercise the flexibility, or if you think there might be other creative ideas to pursue. It is important at this juncture to understand the reasons for the candidate’s decision, and whether or not s/he might be open to reconsidering – with and/or without an adjustment in the offer.
Contending With Counteroffers
You’ve always the option of trying to outbid a counteroffer. But you should first exhaust other means of dealing with it.
Generally, handling a counteroffer is akin to dealing with any other objection, and the techniques for uncovering the concerns behind the objection apply here too. However, there are some specific issues that ought to be pointed out to a candidate considering a counteroffer.
- What else besides the money created your interest to consider other options?
- How deep is your employer’s appreciation for you when it takes your pending departure to compensate you more nearly what you deserve?
- Will you have to search for another job the next time you want a raise?
- Doesn’t this suggest about your employer’s modus operandi a reactive or crisis intervention style of management?
- Sometimes employers just don’t like to “get beat,” and a counteroffer can represent their attempts to notch a conquest, as opposed to a new found recognition for you, or attempt to correct former inequities.
- There’s a strong chance your employer will remain mindful that you looked elsewhere, which may well be considered the next time there’s a layoff, etc.
- You’re likely to be closely watched now.
If there is a decent search consultant / search consultant working with you on a candidate who is considering a counteroffer, these points are probably best pursued by him or her.