The following is an excerpt from The Definitive Guide to Recruiting in Good Times and Bad, by Claudio Fernandez-Araoz, Boris Groysberg, and Nitin Nohria, as published in Harvard Business Review on Finding and Keeping the Best People, a compilation of HBR articles.
Having found the candidate of their dreams, too many companies fail to close the deal. If you are ambitious enough to try to attract the best candidates, at least one out of five will be likely to turn down your offer. And the situation is even more intense in the most attractive global recruitment markets, such as China and India, where the talent pools are extremely limited for their size and growth rates. There, candidates are blessed with options; we frequently hear of individuals receiving three, and even four, job offers.
What factors determine whether or not the top candidate will accept your offer?
The Organization’s Commitment
Many executives think financial compensation is the linchpin in recruiting. But closing the deal is not just about money; it’s also about demonstrating to candidates that the organization is committed to their success. No high performer wants to take a new job only to be demoted, downsized, or left to flounder in organizational quagmires.
A personal show of commitment by the CEO is essential: By taking the time to share his or her passion about the company and the position with the candidate, by expressing a sincere interest in the project and the person, and by genuinely understanding the candidate’s motivation, the CEO can send a powerful message that the company cares.
In their desire to close the deal, many managers present only the positive aspects of the job. This is a mistake, for research shows that a realistic presentation of both the opportunities and the challenges of a prospective position results in higher offer-acceptance rates, better post- employment job satisfaction, and lower employee turnover.
Candidates want to decide for themselves whether they will be able to cope with the challenge they may face. This doesn’t mean dwelling on the downside.
To communicate the positives, a successful hiring manager could borrow a page from John F. Kennedy’s playbook and ask not only what the candidate can do for the job but what the job can do for the candidate -- and then take whatever steps are necessary to make sure the job holds that potential.
Managers should also clearly differentiate the opportunities at their firm from those of competitors. The value proposition might range from flexible job design and job rotation to nonfinancial benefits, advantages in the culture, and growth and development opportunities.
It’s well known that employees do not leave jobs; they leave their managers. Inept managers not only do their own jobs badly, they also destroy the employee performance (and potential) of the people around them.
In their book Hard Facts, Dangerous Half-Truths & Total Nonsense, Jeffrey Pfeffer and Robert Sutton review the research on organizational climate over the past half century. They found that “60% to 75% of the employees in any organization -- no matter when or where the survey was completed and no matter what occupational group was involved -- report that the worst or most stressful aspect of their job is their immediate supervisor.”
“Abusive and incompetent management,” Pfeffer and Sutton continue, “create billions of dollars of lost productivity each year.” And study after study, they conclude, “demonstrates that bad leaders destroy the health, happiness, loyalty, and productivity of their subordinates.” Because of this, the hiring manager must demonstrate commitment by being heavily involved in the closing stage of the hiring process, rather than delegating this last, critical step to HR.
How much should you pay to get the best candidate? Aside from considering the comparable market rate for the position and the prospect’s past salary, there is another important benchmark -- the current state of compensation within the company.
If you break the bank on an outside person and the amount is discovered, existing staff can feel devalued and demotivated. It’s also important to structure the new employee’s compensation with an eye not only to immediate effort but also to sustained employee performance. This goal usually calls, of course, for striking a creative balance among salary, bonus, and long-term incentives, such as restricted shares.
Reprinted by permission of Harvard Business Review Press. Excerpted from The Definitive Guide to Recruiting in Good Times and Bad, an excerpt from Harvard Business Review on Finding and Keeping the Best People, a compilation of HBR articles. Copyright 2011 Harvard Business Review Press. All Rights reserved.