by Lou Adler, CEO and founder of The Adler Group
Talking about compensation can be awkward. As a recruiter, you have limited budget and can’t always offer the candidate everything they envision, salary level included.
For you, the trick to negotiating salary is timing – you have to put the salary conversation on hold and get the candidate to focus on the career opportunity in order to make compensation a non-issue. Here’s how to do that throughout the hiring process:
How to steer the conversation away from salary
When a candidate asks me what the compensation is right off the bat, I say something like, “It doesn’t matter if the job doesn’t represent a career move. So let’s first see if the job is a career move and then we’ll see if the compensation fits. Worst case, we can network for future opportunities.”
When the candidate pushes and says he or she doesn’t want to waste my time and demands to know the compensation range, I say, “I don’t want to use compensation as a tactical filter to have a strategic career discussion.” Pause and let this sink in. Then say, “Since I’m handling multiple roles from senior staff to executive level, if your compensation is out of the range of one of our current openings, I suspect there will be other opportunities in the future that will be a better match. That’s what networking is all about anyway. Isn’t it?”
Of course, I’ve minimised the chance to have to resort to these rebuttals by telling the person upfront that I’m handling a number of different positions and only asking if the person would be open to an exploratory career discussion if one of them made career sense. The idea behind this is that I want to understand the candidate’s background before I describe the job.
This gives me, as the recruiter, the opportunity to determine if the candidate is strong and, if so, I can then describe the job in terms of my classic 30% career move scenario. Too often candidates opt out before this happens or recruiters oversell the job before they know if the job is appropriate.
If a candidate still pushes and asks, “Okay. What’s your definition of a career move?” I then say, “A career move needs to represent a non-monetary increase of at least 30% consisting of some combination of a bigger job, more rapid growth, an improved mix of more satisfying work and more impact.” At this point, most candidates agree to move forward.
What to do when the candidate wants a higher salary at the offer stage
Putting compensation in the parking lot is only a temporary measure. It will come back full steam once you and the candidate jointly decide to get serious about the open opportunity.
When I sense compensation is going to be a problem, I start the negotiating process early.
One way is to use the “push away” technique. In this case I say something like, “While you’re strong in the areas of ____ and ____, we’re a bit concerned you’re light in the areas of ___ and ___. While we’d like to invite you back for another round of interviews your compensation is quite high given this gap. Regardless, we’d like to still move forward if you’re in agreement knowing that any compensation increase will be modest.”
Even if the candidate agrees to this step, when it comes time to accepting an offer candidates typically want more than the budget allows. This is when I resort to my “here’s why it’s better to be underpaid” pitch. It goes like this:
- If you’re overpaid, everyone will expect more of you. Consistent great performance will be anticipated, every mistake will be magnified, and raises will be minimal to get you back within the range.
- There won’t be a honeymoon period. In your new job, you’ll be under a lot of unnecessary pressure during the learning and ramp-up period. It will be impossible to deliver since everyone assumes you already know everything.
- Growth will be slow. Since it will be very difficult to achieve the unfair and inflated performance objectives, promotions are less likely, and your salary will put you out of the range of other internal opportunities. They’ll also be fewer future opportunities on the outside since recruiters will filter you out as a result of your over-market compensation.
- Don’t make long-term career decisions using short-term factors. Slower long-term growth is what happens when candidates unknowingly pursue a short-term compensation maximization strategy. It’s always better to select jobs that offer the most upside potential rather than those that offer the most money.
If you’ve gotten this far without losing too many candidates for monetary reasons, don’t make the offer just yet. Instead, ask your candidates to forget the compensation for a moment and ask them if they really want the open job. If the answer is no, don’t make the offer.
However, if they say yes, have them tell you why. If your recruiting and interviewing process has been thorough they’ll be able to describe the 30% solution in their own words. If their answers are vague, don’t make the offer until they actually understand why the job represents a true career move.
As far as I’m concerned, compensation growth must follow performance. It must never lead it. Whenever it leads it, or dominates the negotiating process, you can be assured trouble will soon follow.
About the author
Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007). Adler holds an MBA from the University of California in Los Angeles and a BS in Mechanical Engineering from Clarkson University in New York.