Why the Offer Stage is NOT the Right Time to Negotiate the Package

It’s a fairly widespread misconception that has become an assumption – the offer stage is the right time to negotiate the package.  On the surface this makes sense.  As the candidate you have steered yourself into a position of power – you have had two or more interviews to be able to showcase your talent and experience and to justify the salary you desire.  As the hiring manager you have seen enough of the candidate to feel comfortable that they can do the role you interviewed them for and will therefore have an appropriate salary in mind.  It seems fairly obvious that give or take a few hundred quid that you will both be singing from the same hymn sheet right?  Then why is it the case that 1 in 3 offers do not end up in the candidate starting the job?

The first thing to remember is that the offer stage is HIGHLY emotive.  It’s the stage where the candidate really gets the first insight into how the company they potentially are going to work for operates, and more importantly, what the perceived worth of that candidate is to their new employer.  It is also the first full understanding of how serious the candidate is about accepting a role with the hiring company.  Therefore things that are said and offered at this stage become so much more magnified than at any other stage in proceedings, with the obvious potential consequence that they can get blown out of all proportion and cause the process to fail.

The main pitfalls:

• Candidate asks for too much money: It is very tempting as a candidate, when you have aced that final interview, and you know the hiring company wants you, to go in with a high salary request at offer stage. This temptation becomes greater when you are someone who may negotiate for a living and so have a propensity to “go in high”, with expectation that you will compromise at a lower amount further down the process.  The issue with this is that you are not buying from a supplier, it’s a completely different scenario and one that needs to be treated very differently.  By high-balling, you run the risk of concerning your potential new employer, creating a perception that you are purely money motivated and therefore a high-risk candidate to be tempted elsewhere through an offer of greater financial reward.  Any employer wants to feel that you are accepting their job because you are excited by them as a business, that the role is rewarding and something you will get a great deal of satisfaction from.  NOT just that you will be getting a substantial pay increase.
• Hiring Company offers too little: As the hiring company you should be aware of the current package that your potential new employee is on. It should be taken as read that aside from highly extenuating circumstances, the majority of people will only take the huge step of moving on to a new business if there is some type of package increase.  Whether we like it or not, a step forward on the career ladder is mainly signified by an increase in salary so if a lower or equal offer comes through, most people will be completely turned off by this.  To offer a lower-than-expected salary to a candidate has in my experience only been damaging to the process in question.  The candidate who at this point is usually very emotional, highly expectant and motivated at the prospect of the imminent exciting new move, will physically deflate if the offer is less than they expected.  They will feel undervalued, and will question the values of the business in question. 

How to get it right:

• Stay within the advertised parameters. Most jobs will get advertised with a salary range on there.  Candidates should only apply for that job if they are happy with this range.  Do not think that you can potentially change the mind of your prospective employers by wowing them at interview.  There is usually a salary structure within a business so even if they think you are worth the extra, they are usually restricted to being able to offer you it.  As a hiring business you have set the expectation within your advert of what the salary will be.  To offer lower than the advertised amount will only cause disappointment and will end up in you losing the candidate you want.
• Don’t expect to be paid for extenuating circumstance. You knew where the role was when you applied for it. You cannot expect your new company to pay you extra because it’s further away than your last employer and will therefore cost you more in fuel / public transport.  That decision is your responsibility.  Obviously there are exceptions to this such as relocation payments but again if you would need to relocate, this is something that needs to be resolved at the start of a process, not be the deal breaker at offer stage.
• Communicate from the beginning. As with all recruitment processes, communication is key. If both parties are honest about expectations from the beginning then it can save a lot of time, effort and heartache in the long-run.  It may be the case that there is a mismatch of a grand or so in terms of what’s being advertised and what the candidate’s minimum requirement is.  So be honest about this from the beginning and see what the potential is to compromise.  It may be the case that you continue with the recruitment process but with the awareness that there is a slight discrepancy there.  If everyone goes into the process with their eyes wide open it is much less likely to become emotive and a reason for failure at offer stage.
• Be fair and empathetic. I always bang the drum about putting yourself in the shoes of the other person, and I am going to do it again! Many recruitment processes fail as there is a lack of understanding for the other parties involved.  If you are the hiring company and you want to low-ball the candidate – put yourself in their shoes – how would you feel if that candidate was you?  Likewise as the candidate, if you were hiring someone and they asked for an amount way about the 10% increase industry standard dictates, what impression would that leave you with?
• Use your recruiter! If you are using a recruiter and they are good at what they do, they should be having these conversations with you from the start of the process.  They should be 100% clear on what you are earning as the candidate, and what you are willing to offer as the hiring business.  They should be clarifying this at every stage of the process.  In this way, when it gets to the offer stage, the salary should be a foregone conclusion and not a shock to anyone.  The only caveat being if the hiring company decides to offer more than expected which I am sure no candidate would have a problem with!  Listen to the advice of your recruiter.  They are there to broker this situation, to take away the emotion and to ensure that everyone walks away from the process upbeat, motivated and looking forward to the new chapter that is about to ensue.  The times when I see offers fail is when companies decide to bypass the recruiter and offer directly.  I don’t understand why this happens as the offer process is part of the service that you pay your recruiter for.  We make offers daily for a living so we are fully aware of the pitfalls and how to make sure everyone wins – use that experience to your advantage!

This is one in a series of blogs designed to improve the recruitment process for everyone involved.  For more of my blogs please go to our website – www.jps-supplychain.co.uk/blog