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:
- What is your vision for this role? How will it contribute to your overall company business strategy?
- What is the local market salary range for this role, keeping in mind the scope of the role and the years of experience required?
- What is your budget and how flexible can you be?
- 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?
- What is it costing you to not fill this position? Consider the financial, emotional, personal and, of course, productivity costs.
- If this role is replacing someone, review any compensation aspects of that experience that may have contributed to the relationship not working out.
- 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?
- 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.