This article originally appeared in the March 2022 issue of Security Business magazine. When sharing, don’t forget to mention Security Business magazine on LinkedIn and @SecBusinessMag on Twitter.
An amazing talent has been identified for your organization and everyone is eager to bring the energized candidate on board. Everything has been tied up in a bow except for one thing: compensation. The candidate has been a little vague or has mentioned that they are flexible or even better to “make them an offer.” How should you proceed?
When candidates behave this way, it demonstrates one solid thing: It is the old adage of “whoever speaks first loses,” and honestly, they are not wrong. The reality is, many candidates have been burnt in the past in compensation negotiation by throwing out a number only to find out later they ended up on the low end of the range.
A common strategy employed by many companies is what I call the classic “lowball” – where an offer is thrown out by a company that is expecting negotiation to occur but starting at the lowest possible point. This is a risky and sometimes offensive method of negotiation. Lowballing a candidate can insult their pride and make them feel like their value is not being perceived.
Put All Your Cards on the Table
A better method is to set up a final conversation with the goal of total transparency. The goal of this conversation is to put all the cards on the table. While traditionally, any negotiation book will tell you to absolutely, under any circumstances, never do this, I am telling you different – and there is good reason for that.
Point blank, employees need to feel trust in their leader. To accomplish this, the candidate needs to feel like their boss is always looking out for their best interest.
Here is an example of how this interaction should look to best avoid offer kick-backs or declines:
Hiring Manager: “John, I just want to tell you after the entire team has gotten a chance to meet you that we all feel that you would make a great addition to the team and we are ready to move on with our process and bring you on board. Before we move to an offer are there any questions that you have for me?”
Candidate: “I am glad to hear it and I am excited to be part of the team. I have reviewed the benefits from HR, and they are a little bit more costly than what I am used to, but I think I will be able to make it work because the coverage looks very good. I am ready to move forward.”
Hiring Manager: “Great. Let’s discuss compensation. Has anyone discussed with you how our commission structure works?”
Candidate: “Not in depth.”
Hiring Manager: “Okay, so here is an outline [go through commission structure]. I hope this is clear, what are your expectations when it comes to base salary?”
Candidate: “I am flexible.”
Hiring Manager: “I understand. Our base salary in sales varies based on experience. From what I know about your background, and your sales success and how our structure is set up I would like to offer you 95,000 as a base salary with our commission plans. The top three sales people here are earning just over 225,000 on similar structures. If you sell as much as you did last year you would make around 240,000-265,000 depending on margin. What are your thoughts?”
Candidate: “That sounds good to me.”
Avoiding discussions around compensation only leads to awkward conversation and declined offer letters. Clearly, payroll is typically the biggest or one of the biggest costs to most businesses, and obviously lower costs lead to more profit; but try to look at this another way.
A happy employee is more productive. The additional salary increase will typically pay off in more ways than one. Happy employees are more likely to refer candidates to work within the organization, stay loyal to the team, and ultimately work harder…it is proven!
Ryan Joseph is an Executive Recruiter for Recruit Group (https://recruitgrp.com), with a focus on security industry operations, sales, and sales leadership. For help with your security recruiting efforts, contact her at [email protected] or call (954) 278-8286.
