Testing the Offer and Closing the Deal - Part 4 on Navigating Compensation
By Lou Adler
In Part 1 of this series on navigating compensation, I made the case that too many candidates focus on a compensation maximization strategy instead of a career growth strategy when comparing opportunities. It’s a bad compromise. In Part 2, ideas were presented on how to have the candidate enter into a career-oriented discussion to determine if your opening is worthy of consideration. In Part 3, I described four techniques on how to position your job as a career move, while ensuring that compensation is relegated to a lower order need. In this final article in the series, I’ll discuss how to negotiate compensation and extend the offer.
For reference purposes, here are the links to all of the previous articles:
Part 1 – Understanding the difference between a “Growth Maximization Strategy” and a “Compensation Maximization” approach to career management
Part 2 – How to handle compensation on first contact
Part 3 – Navigating compensation during the interview
Part 4 – Testing the offer and closing the deal
It’s essential that you become a pro at negotiating compensation if you want to hire the best talent on a consistent basis. If they’re really the best they’ll always have multiple offers or get a counter-offer. In my mind, closing the deal on fair terms is far more important than being a super sourcer, a superb candidate developer, and an excellent interviewer. If you can’t close, it doesn’t really matter what happened earlier. Of course, none of this is needed if candidates always accept your offers, never opt out because your comp is not enough, or never want more money.
Following is a quick summary of nine essential techniques we cover in our basic and advanced recruiter training courses. They’ll give you some good ideas on what it takes to reel in the best talent on the planet, without paying needless compensation premiums.
- Use a multi-factor decision close. When I first talk with candidates I provide them with a multi-factor career decision form. This lists the short-term (e.g., comp, title, location, manager) and long-term (e.g., growth, challenge, impact, culture) factors most people use when comparing different jobs. When negotiating the final offer I have candidates evaluate competing opportunities against all of these factors. Typically, the one coming out on top is the one that offers the best balance and the most long-term opportunity.
- Never make an offer unless you’re 100 percent sure it will be accepted. Before you sign the final offer, review it with the candidate and ask if the person will unconditionally accept it. If not, don’t make the offer. Once you make the offer, the candidate becomes the buyer, and you’ve lost all of your leverage. Before making the offer, you’ll need to test the candidate’s interest using a variety of different techniques. The key point here is to withhold the offer until every point is discussed and agreed upon before formalizing it. Haste here will always cost more than it’s worth.
- Test all offers using a series of trial closes. As you narrow down your candidate list to the two finalists, make sure you ask them if they’re interested in being on the short list. Then ask them if an offer is extended and accepted when they could start. Then ask them if the offer was formally made later this week, when they could give their official acceptance. If the person hesitates at any point, stop and ask why. Testing interest at every step is a critical piece of the closing process. You can’t move faster than the candidate is ready to move, but you can find out what’s holding the person back, and provide the information needed for the person to proceed.
- Be the last person to make the offer. Just tell the person that you won’t make a formal offer, unless the person is 100 percent committed to accept it. This way the testing process seems quite natural. More important, you’re in a much stronger negotiating position since the candidate can’t use your offer as a bargaining chip.
- Test seriousness. Whenever the process bogs down, make sure you ask the candidate how serious he or she is about the job regardless of the compensation. If the person only wants the job because the comp is high, tell the person to walk away. If the job doesn’t offer a true career move, the person will underperform and be disappointed a few months after starting.
- Keep the competition alive. A job always has more value when other good people want it. Keep the competition alive as long as possible and make sure the candidate knows there are other people still in consideration.
- Why being underpaid is great. Check out article one in this series comparing a career growth vs. a compensation max strategy for more on this critical point. Being overpaid always adds extra stress and higher expectations. Those who are underpaid tend to be seen as team players and are given the benefit of the doubt when things go wrong, and bigger increases when things go well.
- It’s okay to think about it. Let candidates have as much time as needed to consider all aspects of your offer in comparison to everything else they’re considering. However, let them do this without making the offer formal. This is why testing is so important. Once you make the offer formal, the candidate will not tell you what he’s thinking and you won’t have a chance to respond.
- Play hardball. If you do need to give the candidate an extra bump over the first offer, make sure you get a major concession. The most important: get the candidate to give you a personal commitment that the offer will be unconditionally accepted if you get the increase approved. As part of this, make sure the candidate knows he’ll need to formally accept the offer in writing once the offer is officially extended. Of course, withdraw the offer it the candidate doesn’t sign it right away.
While you won’t win them all with these techniques, your closing average will soar once you master them. As described in previous articles in this series, negotiating compensation begins when you first take the assignment with the hiring manager and prepare the performance profile. Then the career-focused points must be emphasized throughout the recruiting and interviewing process. This is the only way for the candidate to make the trade-off between compensation and career growth.
Make sure you don’t wait until the end of the process to implement these techniques. By then it will be too late, and they’ll come off as half-baked. They also won’t work if your job doesn’t represent a career move. They’ll also backfire if the candidate later finds out he or she was misled. On the other hand, for some great people your job will represent a career move, and it is the recruiter’s job to make sure the candidate understands this point fully and completely. Doing it well is the responsibility you have to your company, your hiring manager, and your candidate. Don’t let them down.
Reposted with written permission from the Author Lou Adler
Precision Recruiting
Ottawa: 613-287-3767 Toronto: 647-727-4737 Web: www.PrecisionRecruiting.ca
