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Why Hiring Managers Need to Start with Their Best Offer
by SelectOne on Wed, Dec 26, 2018
Pop quiz! When it comes to negotiating with a potential new employee, which is the best strategy in our current hiring climate?
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Make an offer that is realistic, but quite a bit lower than you could ultimately provide in salary and benefits, because you anticipate the candidate will respond with a counter-offer. You know that you’ll end up increasing the offer through the negotiation process, and so you don’t want to start too high. Plus, if your candidate isn’t a great negotiator or doesn’t make a counter-offer for some reason, you will end up only needing to provide the lower pay and benefits package.
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Make your best possible offer from the beginning, leaving only a little bit of room for increasing pay and benefits during the negotiation process. Of course, the risk of making this more attractive offer means you may end up paying someone more money who would be willing to work for less.
Which method will get you the candidates you seek?
If you answered A, you are probably working from a slightly outdated hiring model. While the negotiation process is still alive and well, it looks pretty different than it did about ten years ago. This isn’t necessarily a bad strategy, but there can be some unanticipated consequences of using it in today’s candidate-driven economy.
If you answered B, you might have done so because you used to use Strategy A, and it has led to you getting stung by exceptional candidates who don’t seem to have an interest in negotiating, and instead take one look at an offer and pass on it because it doesn’t seem worth their time.
How did we get to this point?
How can this be? Why would a job candidate simply disregard a realistic offer instead of negotiating and making a counter-offer? Isn’t that a risky move on the part of the job seeker?
The reason why candidates behave in this way is that we are currently in a candidate-driven market. What that means is that there are more job openings than there are qualified candidates, and now candidates have significantly more power in the job search. This is a good thing for job seekers, of course! But it’s tricky for hiring managers and recruiters, because we have to adapt in order to get these candidates.
Ten years ago, when unemployment was higher and the job market was far more competitive for qualified talent, candidates would jump at the chance for any job that was going to pay the bills and provide some stability. They didn’t want to take a lot of risks in the negotiation process. As the unemployment rate has dropped steadily for the past ten years, though, that has changed. Today, highly qualified job seekers know that they are in high demand, and if one job offer doesn’t give them what they are looking for, they’ll move on quickly.
Act fast, or lose your candidates
One of the reasons that recruiters and hiring managers are encouraged to work quickly to get through the interview process and offer a clear, competitive job offer is that sometimes the candidate doesn’t even have time to negotiate. Someone who is getting two or three offers isn’t going to bother negotiating with the people offering a lower package, which means that employers who would be willing to pay more than they’ve offered won’t even get the chance to sweeten the deal.
Our pop quiz really isn’t perfect, because the answer isn’t just A or B. The answer is more complex. Hiring managers should be prepared to engage in the negotiating process, and they don’t need to inflate their offers beyond what is competitive in order to win over candidates. However, they also can’t expect to go about the business of hiring like they did a decade ago.
If your company wants to get up to date on the latest strategies for attracting top talent, let’s talk. We are excited to talk to you through the ways that you can improve your current practices and be more successful in your hiring goals. Want to know more about the ways we recommend attracting the kind of highly qualified talent you’re looking for? Learn more by downloading our free offer, Attracting Talent in the Candidate-Driven Economy.
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