Hiring Top Talent- Negotiation Skills for Small Business Owners

8 vital questions small business owners need to answer before initiating a search, or starting to interview

Editors note: this is part one of a two part series 

Talented professionals, the right ones for your company, are not so “easy” to come by as most small business owners can attest. Heck, hiring in general is not an easy task for any size company, even those with marquis brands.

In a relatively strong economy, top-notch professionals have choices. So when you find a good match, don’t lose them by taking risks on the negotiating table.

My 18-year career in recruiting has taught me a thing or two about how to ensure that a highly desirable candidate doesn’t get away, even when their salary requirements exceed your budget.

Aldebaran Associates, the recruiting firm I started almost 15 years ago, deals with clients of all sizes ranging from 10 employees to over 50,000. In tough conversations involving compensation packages, the winner is always the person that clearly knows what they want and is willing to give up emotional or stubborn attachments to any aspect within the scope of a potential offer.

Preparation for compensation conversations should begin before you actually meet the first candidate. Turnover is very costly so hiring “right” from the start is necessary if you are going to avoid financial havoc.

We recommend that you not initiate a search, or at least not start interviewing, until you can clearly answer the following:

1. What is your vision for this role? How will it contribute to your overall company business strategy?
2. What is the local market salary range for this role, keeping in mind the scope of the role and the years of experience required?
3. What is your budget and how flexible can you be?
4. If your budget does not allow you to meet the market salary demands for this position, how do you plan to make up for this?
5. What is it costing you to not fill this position? Consider the financial, emotional, personal and, of course, productivity costs.
6. If this role is replacing someone, review any compensation aspects of that experience that may have contributed to the relationship not working out.
7. What are the top 3 “must haves” for this role and what are the top 3 skills or traits you would really like the candidate to possess but are willing to do without?
8. What are your deal breakers? What are you not willing to compromise on regarding this hire?

Consult a business partner, financial advisor (such as your CPA), search consultant, reputable recruiting firm, etc. if you are unable to answer any these questions satisfactorily on your own. You may have assigned someone on your staff to manage the search process and applicant interviews.

If so, make sure to share with them the answers to the above questions. Be certain this person is someone you 100% trust to be aligned and engaged with the vision of your business and the role itself.

Thoughtfully considering the questions proposed here, and knowing the answers, will give you the confidence to engage in negotiation-like conversations starting on the first interview with each candidate.

This is a critical step in setting yourself up for extending solid offers and minimizing the risk that they will be counter-offered, rescinded or shopped.

Now you are ready to start the search and begin interviewing!

In addition to the standard interview questions, here are some basic guidelines regarding negotiation-type questions you MUST ask in your first interview and continue to verify to some degree in every subsequent meeting with that candidate:

1. Make sure you get the straight scoop about why they want to leave their current position or why they left, if they’re no longer there. This will give you a sense of the level of urgency with their situation. If not the first meeting, find out if anything has changed in this regard since they last met with you.
2. Sometimes, assessing level of urgency might require a very straight question such as, “What is your timeline to be in a new position and why?” Insights gained with this question will allow you to understand the “pain” and possibly give you leverage in your negotiations.
3. Find out if they are interviewing with any other companies and see if they will volunteer who they are interviewing with. What are their feeling about this opportunity? This is like gathering information about the competition – very important for final negotiations! Again, if not the first meeting, ask if anything has changed.
4. Tell them to put money aside for a moment. Ask, “What will be most important to you in your next job/career move?”
5. Don’t ask them in the first meeting what their current salary or history is. Instead, ask them what their desired salary range is. Find out what evidence they have that justifies them meriting this range. (A candidate’s “market worth” is not determined through a linear formula. Instead, several factors should be taken into consideration and it is not a science, unfortunately.)
6. Let them know honestly what your budget is and let them know if you have any flexibility. Ask them what flexibility there is regarding their desired range. Transparency is always a positive negotiation “ploy.” If you each don’t see a way to possibly align, there may be no point in continuing the conversations.

Note: It is somewhat important that the sequential order of these points be followed as they are listed here.

Lastly, throughout the interview process, try to engage emotionally with the candidate.

Seeking a new position or considering a career move is a very emotional journey for most people. By identifying with these emotional aspects and being compassionate, understanding and thoughtful, you will go a long way in ensuring the candidate will trust you enough to be forthright and honest about what matters to them.

When you know what matters to people you have more leverage to give them what they really need and, therefore, get back what you really need as well.

In Part II we’ll provide you with tips for winning over 90% of your compensation negotiations so you can hire the talent you need to grow your business!

Related articles:

Hiring Better Fitting Employees

3 Considerations Before Hiring a New Employee

Adding a New Employee Worth the Expense?

Hiring Foreign Nationals: What Should an Employer Do?