The Art of Making the Offer

The art of making the offer!! 

You completed the interview process, you have ranked the candidates, and now you need to create the compensation package and make an offer. Here are five things to consider when making an offer.

 1) Know how your organization stacks up regarding benefits. If your company has a strong benefits package, emphasize that in the offer. A ten per cent 401k match is a strong benefit. If you pay 100% of an employee's healthcare premium, highlight it. If your company has a weaker benefit package, be prepared to offer more money to compensate for the shortfall.

2) Do not be cheap. An employee's impression of your organization is significantly impacted by the offer you extend. All organizations must consider where a new hire will fall relative to existing employee’s compensation but is saving 3% worth having a vacant position? You want a new employee to be excited and feel valued, not feel like they are entering a new job underpaid.

3) Put a time limit on how long the offer is good for. We recommend making an offer and giving the individual through the weekend to decide. Not quantifying the time frame increases the probability that they will shop your offer. Of course, expect some due diligence. If there are questions you can extend the time, but do not let someone leverage your offer to get a better deal with someone else.

4) If you negotiate, then ask for a commitment on the negotiated terms. For example, if a candidate asks for more PTO or more money then get them to commit to your company if you agree. Some negotiation can be expected, but do not leave the situation open-ended.

5) Give in a little. If you cannot go higher on salary, then promise a 3-month performance review. Show the candidate that there is shared risk by offering a performance-based incentive. Another effective counter is to offer more vacation time. One week is worth approximately 2% in salary and demonstrates that your company promotes work/life balance.

There is no perfect candidate so be prepared to move on. Remember, the role of Indiana Jones was first offered to Tom Selleck, not Harrison Ford. Harrison Ford did just fine in the role. 

Next up! References - why you need to do them and how to do them.

 Siegel and Benjamin has been solving human capital solutions for over 22 years. Contact us for a free evaluation of your hiring process.