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Recruiting and Hiring Advice
 

Making an Offer

By: Paul Falcone

Beware of falling into this trap: you’re ready to bring on a new hire – but don’t assume that the candidates will automatically accept your employment offer.

Too many managers mistakenly make job offers without qualifying whether other job offers are on the table; it’s also crucial to know whether the job candidate might leverage your offer at his current company, looking for a pricey counter-offer.  This can quickly lead to complications if you haven’t determined the job’s market value in advance.

Negotiating the Job Offer
Make no bones about it -- once you extend an offer to a candidate, the balance of power is shifted and the candidate takes control: “Nina, we’d love to have you join our team. You’ve got the job; now let’s talk salary and your availability to begin.” Whoops! You just went way too fast and gave away your offer without qualifying Nina’s readiness to accept it.

So how do you maintain control of the salary negotiation and minimize costs by reducing time to hire? First, I suggest that no offers be extended until after you’ve taken the candidate through the following five-question “offer drill.”

Then, start by asking the following questions when interviewing candidates:

Interview Question 1: What would be your next logical move in career progression if you remained with your current employer? How long would it take to get to that next step?

The logic of this question is simple: You need to know up front if there’s a possibility of this candidate accepting a counter-offer. Therefore, to better understand how much your job offer would catapult this individual’s career (relative to remaining with his current company) you’ve got to have a benchmark. That benchmark is the individual’s perception of his current role’s potential.

Once all the rounds of interviewing are completed and you’ve conducted the necessary reference checking, personnel assessments and background screening, it’s time to extend the offer. You might want to open your conversation this way:

Interview Question 2: “Remind me again why accepting a position with our company would make sense for you from a career development standpoint. How would you explain this move to a prospective employer five years from now?”

Forcing a candidate to articulate the benefits of joining your firm from a more global, longer-term perspective is typically an ideal way to enter into a salary negotiation with the employee because it reminds him/her of the benefits this opportunity has to offer. 
 
Interview Question 3: “If we were to make you a job offer today, when would you be in a position to either accept or reject it?”

The ideal answer is, “Right now!” Beware of candidates who suddenly ask for more than 24 hours to consider your offer; they may be delaying because they’re considering another company’s offer. Putting you off may be the only way to buy time to see whether they can generate the offer they really want. If you suspect that to be the case, don’t be shy about asking them for more information. 

Interview Question 4: Again, if we were to make you an offer, tell me ideally when you’d be able to start. How much notice would you need to give your present employer?”
 
Most candidates will need to give their current employers two weeks’ notice, and you might want to offer an additional third week so the individual has some personal down time before coming aboard. If they say they can’t start for six weeks, beware . . . Something may be going on that you’re not aware of, and you need to open up that dialog right then and there. 

Otherwise, you may find out to your chagrin six weeks later that the individual has either accepted an offer elsewhere or accepted a counteroffer to remain with her current company. Ouch! 

Interview Question 5: At what point dollar-wise would you accept our job offer, and at what point dollar-wise would you reject it?

This is the big question; and that’s why salary negotiation is often saved for last. Candidates typically expect to “hear” offers rather than volunteer numbers themselves. Still, if the candidate isn’t quite sure how to respond initially, then qualify your question this way: “Sam, I’m asking you this question because I’d like you to help me gauge your level of interest. Share with me the ideal salary offer you’d like to hear versus what that walk-away point might be for you.”

Ideally, candidates will close themselves at lateral moves to their current base salaries. It’s more commonly the case that candidates peg an increase in their base pay to a percentage hike – 5% to 20% -- depending on their desire for the job and their perception of their market worth.

Assuming that any of those assumptions are within your salary range, you’ll be safe to extend the offer at this point. However, if they’re looking for a lot more money than you have on the table to offer, you could either discuss that upfront and extend the offer, or simply delay the process and go back to the compensation/budget table to review your proposed offer.

The key to the exercise, of course, is to ensure that you retain control of the negotiation until you’ve had all your most critical questions answered. After all, employment offers are a two-way street: your candidate should be an excellent addition to the team, but accepting this role should make sense for her/him career-wise for at least the next two to five years.

Author Bio
Paul Falcone
is Vice President of Human Resources at a major Fortune 500 company. He is the author of several books including 96 Great Interview Questions to Ask Before You Hire, 101 Tough Conversations to Have with Employees, 101 Sample Write-Ups for Documenting Employee Performance Problems and 2600 Phrases for Effective Performance Reviews.

 

 
 
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