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It’s Only Common Sense: A ‘Hire’ Responsibility—Making a Sweet Offer

So, you’ve planned, searched, vetted, interviewed, and you’ve finally found the right candidate—the perfect person for the position. Now it’s time to make an attractive offer and negotiate the details of the compensation package with this stellar candidate.

If you have done your homework properly, you already know what it will take to convince this person to join your company—including the salary range necessary to entice this person to leave their current position (assuming they are currently employed). If this person is not currently employed, your job is that much easier.

But for the sake of this column, let’s assume that the right candidate already has a job and that you are negotiating to lure them away from that job. To do that, you need to offer a better compensation package than they have right now.

At this point, you should have a general idea of what your candidate’s current salary is—simply by asking them what they currently earn. At this stage, there’s no question that this is the right person for the job, and you should be ready and willing to pay the price necessary to get them on board.

Besides their current salary, your offer should take into consideration the candidate’s years of experience, background, knowledge of your industry, product, and—most importantly—whether they are a valuable pick for your specific company.

Ask yourself: How will this person better my company? Will they bring in more business? Will they help me do things that I have thus far been unable to do? Will they take my company to the next level?

The more value this person brings to your company, the more valuable they are overall, which means they are worth what you will pay them.

Taking all these factors into consideration will help you decide what their salary should be. You should start at least at 20% more than what they are currently earning. Then consider the estimated value they will bring to the company, and compensate them at least 10–20% more. If they bring technology that you would not have without them, please take the into consideration.

Remember that you want to make sure that they will stay with your company for a while—at least five years. The more valuable they are to you, the more valuable you’ll be to your competitors, so you might consider an offer of 30–40% higher than their current compensation to make sure they are satisfied with their choice to stay with you for a while.

Then, of course, there are the benefits to consider. You should never take these lightly; when a person reaches a certain salary range, the benefits become as important to them as the salary.

Here are some of the more popular benefits:

• More paid time off: If a person has been in the industry for five years, they just get two weeks off—no questions; 10 years, three weeks off, and so on. Don’t underestimate how important this benefit is. You will need to meet or exceed these benchmarks to remain competitive and retain quality talent—like your ideal candidate.
• Good health benefits: I know this can be prohibitively expensive, but the reality is that people are switching jobs based on the quality of a company’s health insurance. Don’t skimp on this; health benefits can be as important as the salary.
• Retirement funds: IRAs, especially matching fund plans, are a very important benefit in our current economic climate.
• Stock options/other ownership plans: As with retirement funds, stock options are currently a critical benefit for many.
• Car allowances: Unless the person you are hiring is in sales, these benefits are generally lower priority, but they can still influence a hire decision.

There are also the softer benefits to consider, like personal growth sabbaticals, time off for charity work, or paid education—such as funding an MBA or providing reimbursements for executive courses.

In some cases, you may find that you want to tailor your package for a particular candidate. Talk this over with the candidate. Receiving a custom package might be the deciding factor in whether he joins your company.

Throughout this process, the important thing to remember is that hiring a new candidate is like making a sale. You are convincing this person to join your company, so you must be persuasive and convincing that your company is the right place for them.

One final word of warning: Don’t try too hard. If this person shows resistance and you find yourself pleading with them to join the company—take the hint. There is a fine line between negotiating and not really wanting the job. It’s not going to do either of you any good if they end up taking a job they really don’t want just because you wore them down. It won’t work. You must have a sense that the candidate really does want to work with you but is trying to negotiate the best offer possible for themselves.

If the negotiations go well and you amicably come to an agreement, well, that’s the start of a beautiful relationship.

It’s only common sense.

Dan Beaulieu is president of D.B. Management Group.