Navigating the (Often Tricky) Offer Process
You’ve scoured through resumes, interviewed your top candidates, and finally believe you’ve found the one (a little like dating, right?). Now the only thing between you and your dream candidate is an accepted offer.
Though the offer process is often tricky and intimidating, it doesn’t need to be. Come prepared by being competitive, involving the right people and negotiating knowledgeably. By doing so, you’ll successfully navigate the “offer maze” and will have a strong shot at landing your #1.
Pulling together a competitive offer
You’ve likely heard it before, but 2019 is truly a candidate’s market. According to a study by Jobvite, recruiting top-tier talent is more difficult than ever. There are more open jobs than there are qualified candidates, more offers being made, and in turn, more competition in landing the most talented people.
In order to stand out in such a competitive market, it’s crucial that you put together and extend a compelling offer. And to do that, you need to know what’s important to the candidate.
Are they incentivized by cash? Equity? Or are other benefits (vacation, flex hours, etc.) more important? By having an honest conversation about expectations and making sure they align with both your company’s compensation philosophy and market data, you’ll be well-equipped to present an offer your candidate won’t be able to refuse.
The earlier you have this conversation, the better. You’ll save a lot of time and energy by not pursuing candidates whose requirements you cannot meet. It will also help you understand if your budget is in line with the market, or if you’ll need to adjust your expectations on some front.
**With the Equal Pay Act, depending on the state you’re hiring in, you may not be able to ask candidates about their current salary. While there are ways to gather this information (“What are your expectations?” or “What are you looking for?”) a candidate may not feel comfortable sharing and legally does not have to. If this is the case, it can be beneficial to give a compensation range for the role.
Once it’s time – to the extent that you can, incorporate what you’ve learned from the candidate into the offer. What a candidate sees as competitive will generally align with the salary information they’ve given you, their current compensation and benefits package, and the packages being offered by similar organizations.
Keep in mind that candidates also typically look for a 10% salary increase when changing jobs. This is certainly not a hard-and-fast rule, but candidates are generally at least somewhat incentivized by money and are not looking to take a step back. To remain competitive, if it’s in your budget and you know the candidate’s current salary, consider offering something slightly higher (especially if the role includes increased responsibilities).
Aside from the major variables (base salary, bonus, equity) you’ll want to inform the candidate of any other pertinent info – title, start date, manager’s name, as well as benefits, vacation time, etc. It may sound basic, but having this all outlined in written form can help make the decision more straightforward.
Finally, be sure to give a deadline. The last thing you want is your candidate shopping around for offers, receiving a counteroffer from their current company, or deciding they’re not actually interested at all. Three business days is pretty standard.
Who extends the offer?
Ah, the age-old question. Should the recruiter extend the job offer or should the hiring manager? There’s no right or wrong answer here and there can be pros and cons to each.
By having both the verbal and written offer come from the recruiter, the candidate will have a knowledgeable point of contact who can answer almost any question that comes his or her way. The recruiter has all of the information on benefits, policies, culture, etc. and knows these like the back of their hand. Since they’re extending offers across the company, they’re also experienced and are often seen as a “safe” person to ask questions to. The downside? It often comes off as less personal.
On the other hand, a verbal offer is almost always more meaningful when extended by the candidate’s future manager. Though they may not be equipped to answer every logistical question, they’re able to use the offer conversation as a final selling opportunity, and express their excitement around the candidate joining.
A common approach is to have the hiring manager extend the verbal offer, and the recruiter to follow up with the written copy. This way, you get the best of both worlds – the personal touch and relationship-building from the candidate’s future manager and a knowledgeable point-person in the recruiter for any questions.
Negotiations are common – in fact, 55% of candidates tried to negotiate their salary during their last job offer. Don’t be surprised if the candidate comes back with new asks, even after you’ve put together a strong offer.
Evaluate what the candidate is proposing, and compare that with what you’ve given and where you’re able to compromise. Unless you were misaligned from the get-go, there shouldn’t be a huge difference between your initial offer and what the candidate has asked for. That being said, the candidate will often come back with a number (salary, bonus, vacation days, etc.) higher than they’re expecting you to agree to. They typically expect you to be firm with your offer or (hopefully) counteroffer to land somewhere in the middle. If you’re willing and able to negotiate, keep that in mind as you pull together your counter.
At the same time, don’t feel like you need to over-negotiate. If their requests are nominal and within your means, consider simply agreeing. You’ll leave a lasting impression with the candidate and start things off on a positive note.
There’s no one-size fits all approach to negotiating, and exceptions are often made. You’ll need to decide exactly how far you’re willing to bend (if at all) during this process and where you’re willing to walk away.
First, celebrate! The hard part is over and you’ve hired someone you’re super excited about.
Then, be sure to keep your new hire engaged until their first day (especially if there’s a lapse of more than a few weeks). Can you invite them to a company or team event that’s happening? Can you send them a gift or a note signed by their new team?
This is a great way to start establishing rapport and building a relationship with your new employee. You’ll be top of mind should anything else arise and will set the stage for an enthusiastic new hire ready to hit the ground running on Day 1.
Offer declined… now what?
Even when you’ve made a competitive offer, negotiated and met or exceeded every request, a candidate can still turn you down. Where do you go from here?
Follow up and ask for feedback. More often than not, the candidate will be willing to share. Was it a really tough decision (they loved the manager!), but they ultimately received an offer with a significantly higher salary? Were they impressed with the offer, but had a negative experience during the interview process? Did they not receive the type of counteroffer they expected and walked away? Use this as a learning experience, and adjust and improve where needed.
You should also take the time to reflect on and appreciate what you’ve done well. If you gave an extremely competitive offer, had countless conversations and traded dozens of emails with the candidate and overall, provided him or her with an amazing experience, take a step back and relish in that accomplishment. At some point, the offer process is completely out of your hands, and you should pat yourself on the back for having done all that you could.
At the end of the day, if your company is growing at scale, there’s a good chance you’ll be extending a lot of offers. Understanding how to navigate the process and give a compelling offer is not only important, but necessary if you want to fill your team with exceptional talent.
Greg Storey, InVision’s Senior Director of Executive Programs, on standups and standing, evening escape plans and killing elephants.