Recent research from McQuaig in the form of their 2014 Global Talent Recruitment Survey has given some insight into the current job offer process and in particular why candidates are currently turning down offers from employers. They identified the top five reasons that candidates rejected an employment offer, which include:
1. Total compensation is not high enough (39%)
2. They accepted an offer from another organization (29%)
3. Accepted a counter offer from their current employer (11%)
4. Job responsibilities (4.23%)
5. Spouse doesn’t want to relocate (4.23%)
This is a strong indicator that the interview room has become the site for a bidding war as a result of the extreme pressures in the market due to the reality or perception of extreme talent shortages. And if employers are to compete effectively, they’ll need to go into the interview/negotiation well armed.
Good information is key to this process as negotiating in the dark will leave you at a serious disadvantage. I think that there are four pieces of information you should not enter the modern, candidate driven negotiation room without or else you will soon be on the ropes.
To start with, you’ll need a reliable indication of the market rate for the role in question in the industry and area. And salary surveys are just a starting point as they are broad based and may not be relevant to the role variant from your particular organization. You’ll need to do more informal detective work these days and dig deeper, talking to recruiters, looking at job adverts, and searching job forums to really pinpoint the market rate for your specific role.
You’ll also need to know what the competition is paying, be that the candidate’s current employer that may be counter offering, or any competition with whom they may also be interviewing. This information is not likely to be publicized so it will need to be gathered through detective work and networking. You can, of course, ask the candidate directly, prior to the negotiation. This will help you pitch your offer better and know how far you may need to move.
Thirdly, and this is crucial, you must have a clear idea of what the candidate’s key job and career drivers are, which means you’ll need to have gathered this during the interview. Money may of course be a factor, (and you will gather their salary expectations), but other factors can also be crucial, such as: commute time, ability to work flexibly, attractiveness of job, ability to progress, etc. If you need to provide additional incentive to your candidate, but don’t want to or can’t pay more money, then you can focus on meeting their key non-financial drivers.
And finally, the last crucial component should be the deferred salary hike, should they come and join you. You might not be able to pay quite so high now, but in three, six or nine months once they are proven you may be able to pay much more. The hope and potential of a rise/promotion in the future can be a powerful incentive, which rivals the higher salaries on offer in other quarters. Pitched right, it could be enough to tip the scale.
I believe that if you walk into the negotiation room with these four pieces of information you will reduce the amount of offers that candidates are rejecting, without automatically breaking the bank.