Ann Bares’ post a while back over at Compensation Force on pay communication got me thinking… what’s my approach when communicating pay during the job offer?
I’m not sure anyone actually ever coached or taught me “how” to make a job offer. I’ve taken my own
experiences of being offered jobs, coupled with what just makes sheer sense to me, and have come up with this approach: talk about the role, discuss why everyone is excited and how this is going to be a great career move… and then comes the discussion on money. I always save that for last. If I know I can close the deal easily, I’ll dive right in and give the figure, launch into a schpiel on our bonus program, and then hit them with benefits. I drive hard, put the pedal to the metal and quickly close the deal. That usually works well for me.
For candidates where salary might be a tougher negotiation, I usually start out with a little bitty on our ranges and how we generally determine compensation. For others, I’ll include a discussion of what the industry standard is and how our offer compares. I think a few times, I have even come flat out and said that we’re not going to be able to meet what they were expecting and then launch into where I can take them, what the earning potential might be long term and why their expectations might not be in alignment with our compensation structure. Essentially, I talk ranges, goals, rationale, and our intent.
I’ll also go for an emotional connection a la Paul Herbert in hard-to-close deals where I’ll emphasize motivation, the impact they can have (yes, you can help to change the world!) and that coming to work for my firm can’t be about the money – they have to want this role and I heavily emphasize the intangible benefits. And thankfully, I’ve actually never had a job turned down because of money, including when I’ve asked people to take pay cuts… but that’s not to say that I’m 100% confident when making offers. I actually hate talking about money and dread that part of the discussion.
I suspect some of the issues in the study Ann sites where most/many/all employees don’t know or understand the salary ranges for their positions and how base pay increases were determined could have linkages to how and what is communicated when first bringing an individual into an organization. My firm also does a compensation orientation session for new staff so they understand our pay philosophy and compensation structure. Another best practice, if I’m to toot the horn for my wonderful HR team and leadership. What are other folks doing though? Are there other best practices to share out there? I’m eager to hear what you’ve got up your sleeves.
Jessica:
Thanks for the link and the mention. Your point is right on; that good communication about pay (and everything else, I guess!) starts in the hiring process. Mess it up there, and it will come back to haunt you – guaranteed! I wish (as a comp consultant) that all companies would follow the practice of your HR team, and provide an orientation to the compensation philosophy and program for all new staff. Unfortunately, my experience would suggest that you are the exception.
I’ll also be interested to hear what other best practices and ideas are out there!
Jessica, you’ve never lost a candidate to salary? You understand how hard that is to believe. People flake all the time. I think it’s possible to sell your heart out on the company, the opportunity, the growth, and how it is better vs. their current role (which we should all be doing, because we’re the sales face for our companies from a recruiting perspective right?), but someone can still turn on a dime at the last second.
One technique I use to combat this is to discuss salary with the person in the 1st or 2nd conversation and to re-confirm where we are throughout the process, so that we’re on the same page. I let them know that I’m asking so early on, so that I can make sure what they want, and what we can offer, are in the same ballpark. If we’re not they know that up front and no one has their time wasted. That said, I’ve still had a fair share of people change their tune at the last moment.
In the end, it comes back to people being the most unpredictable commodity in the world.
Good post!
I think that the only way to possibly have a record of never being turned down based on money is to at least know at some point that you are in their ballpark before you get to an offer negotiation.
If I look for a job and it is a great opportunity with marvelous potential but I can’t pay my car note and mortgage, I have to leave it behind.
So, like Pete wrote above, our process usually at least starts the money talk pretty early on to ensure we don’t get to far only to realize their basic needs won’t be met. If we are in that arena, then I can sell them on the features and benefits to them as compared to other jobs that might pay more.
Money is a tough thing to talk about, isn’t it…at least for many of us!
Does anyone have any thoughts about what to do when a candidate asks for a significantly lower salary requirement than you budgeted for? Do you just give them the lower amount out of hand? I have a candidate that I think is a good fit, but she lowballed herself, which makes me think a couple of things… times are tough, so she’ll do whatever it takes, or she doesn’t value her skill set (which is an undermining behavior)… or, does it mean she’s maybe not as bright as I thought? I know this is more of a question than a comment, but all the other posts I’ve been searching are geared more to the potential employee.