By Venesa Klein – Principal, San Francisco –
The tendency for companies to want to get the best deal, or to present a low-ball offer thinking they will negotiate salary, isn’t effective. It costs them time and money. A-Players know what they are worth, and if nothing else, will leverage a weak offer to get a higher counter offer from their current employer. In all reality, you’ve got to pay to play. If you don’t, then what you’re really sacrificing is talent and innovation—two things no successful company can afford to go without.
If you don’t retain your A-Players, then you have to continuously replace them. Think long-term, not short term. Also, when you are recruiting a top exec, do you want to go through the entire offer process only to have your first choice turn you down because you low-balled them?
What can you really afford to pay this person? If it turns out that you have champagne taste on a beer budget, then you have to change the job or find the money. That may mean hiring someone who is more junior—someone who will grow into the role.
Don’t go for the person sipping champagne who agrees to switch to beer. How long will that last? And why would they switch so suddenly? Something happening at the company? Are they about to be fired? Is the company being sold? Meaning, are they willing to drink some beer until they find another restaurant serving champagne?
If the situation were reversed, how would I feel? What would I do? When negotiating, you want compensation to be a non-issue. The last thing you want is for someone to come on board harboring a small, but ever-increasing resentment about their salary. What you do want is to show your top candidate that you want them on board; that you’re not looking for the sale price; that you value them; that you take this move seriously; and that you plan on offering them a better opportunity. Better role, better company, better money.
Offer more, put your best foot forward, be willing to invest in this person and show them that you are serious and enthusiastic. If you start the offer process from the first interaction (and make a good offer) your candidate is likely to accept, be delighted, and will have good things to say about the company and about you personally.
Approaching a Passive Candidate:
A Passive Player is happy in their current role. You should be thinking about what you can offer them in terms of compensation. Convince them that your opportunity is worth their time to consider. Money may not be the # 1 motivating factor at the beginning, but it will become more of a priority as discussions continue. There are people who are happy to make less money in exchange for better perks (the ability to work from home, more vacation days, etc.) but passive, executive level A-Players are only going to be interested in a better overall deal. You can use Creative Compensation by offering some solid equity, an opportunity to “cash out big” later on.
A low-ball offer says “We’re cheap, we play games, and we want to waste your time”. Begin branding at the first interaction between the candidate and the company. This is where the offer process starts; it is the first impression. Companies should always be cognizant of how they appear during every touch point of negotiation. They should be branding themselves as a great place to work.