Small Business Hiring Negotiation Eight Steps- Part II
8 hiring basic negotiation tips and a backup plan
Editor’s note: this is the second and final piece of this hiring negotiation series.
Let’s pretend you’ve been looking to fill a critical role for several weeks. You and your team have reviewed numerous resumes and conducted several interviews. Hopefully you have followed most or all of the tips we provided to you in Part I Hiring Top Talent- Negotiation Skills for Small Business Owners of this article and you have set yourself up for a powerful straight-on negotiation conversation. So now let’s pretend that you’ve finally found the right candidate.
However, despite your having taken measures to understand their expectations, they are asking for a higher salary than what you have determined is possible given your budget constraints, and they appear to be inflexible.
Now what?
Here are eight basic negotiation tips to follow and what you can do when things don’t go your way:
- Understand that for a negotiation to be deemed successful, both parties have to win.
It is ultimately detrimental to you to convince a candidate to say yes to an offer that is not fair or that they are not absolutely thrilled about. Regarding base salary, when it comes down to your candidate being totally excited vs. just feeling satisfied with your offer, if the difference is 10% or less, give it to them!!!! You do not want someone starting with you that is anything less than thrilled about having been offered what they truly believe they deserve.
- Taking advantage of a candidate’s weak position is never a good idea. Don’t do it!!
For example, I’ve often witnessed companies thinking they can get away with paying less than the market bears for a position to someone that is out of work. But no doubt, once the candidate gets past their desperate situation, they will fly the coop in a heartbeat at the first available chance. Intuitively they will always know that they were taken advantage of.
- During your entire negotiation-type conversations.
Make sure you have asked questions about the possibility that their current employer might counter-offer if they resign, or if they are expecting an offer from anyone else. Ask what they would do in both these cases. Realign with what is most important to them. You should also make certain that they are not using you to get an offer they can then present to their boss in an effort to get a raise.
- Make sure you have all the facts regarding the candidate’s prior compensation history and how it maps to what you are offering.
For example, people will often tell you the full compensation they were eligible to receive but in truth, they may not have even come close to it. That’s because bonuses, which are often included in compensation history, are almost always discretionary and even when offered, may not actually have been paid.
- Consider the actual monetary value of health and other benefits they are receiving vs. what you are offering.
Wherever possible, stay at par or better than what they’ve been used to. Benefits such as vacation may not hit you too heavily from a budgetary standpoint but could make all the difference to the candidate. Again, transparency is always the best path. When you can’t match a benefit, be honest with the candidate and show them an effort to make up for it in another way. Get creative!
- Hopefully you have learned throughout the interview process what really matters to your candidate.
This information can help you create incentives that make up for compensation aspects that you cannot meet. For example, if you are a small business that cannot pay for health benefits competitively, perhaps you can create a bonus structure that allows you to offer additional time off if that is important to them. How about creating a special fund to help them save for their child’s college education each time they meet a huge performance goal that adds to your bottom line.
The possibilities are endless!
- Regardless of how smoothly things are going, make sure to be consistent in referring to aspects of your company culture and the position itself that match with what the candidate has told you aligns with the vision they hold for their next career move.
- If a potential relocation is in discussion, be generous and allow your candidate and their spouse ample time to consider the family implications.Set them up with a relocation specialist or real estate agent on a tour of the area including schools, etc.
Be creative if budget is an issue. With these tips your chances of the candidate signing your offer are extremely high. However, sometimes even the best preparation is not enough to guarantee that outcome. Several situations could potentially arise that send your best-laid plans into a ditch.
The following are the two most common things that could go wrong and tips on what you can do to save the day, that is, assuming you really want this person to join your company:
- The candidate has received an offer from another company, and it is paying a larger base salary OR the candidate has received a counter offer from their current employer and they are now questioning leaving.
Your next action:
Take off your would-be employer hat and put on your “I have your best interest at heart” hat on. This requires you to honestly care about the candidate and what is in their best interest. Help them to look at all the different aspects of both positions and to see which one truly fits the vision they painted for you early on. This kind of conversation is best had over a meal. A little “wining and dining” can go a long way in building trust. If the candidate still decides to go the other way, in the long run it is the best thing for both of you.
- The candidate has done some research and they have discovered they were being underpaid and feel they should be paid more than what they originally told you they thought was fair.
Your next action:
Be sympathetic and compassionate. Agree with them that they are worth that much more (unless you have evidence that proves otherwise). Remind them of your limitations and of everything the position has to offer including how the company vision aligns with theirs. Ask them for a suggestion on how you can make up the difference since you are not able to give them the number they want. Partner with them on creating something you both can live with.
Tie it to performance!
It’s important that you listen to your intuition. Know when it’s time to cut bait and move on to another candidate that is more appropriately aligned with your goals and budget. Don’t allow yourself to become emotionally attached to any particular candidate or outcome. Be professional at all times and follow the guidance that holds your company’s best interest in mind, not yours individually.
Related articles:
Hiring Top Talent- Negotiation Skills for Small Business Owners
Hiring Better Fitting Employees
