Hardball Recruiting, Part 4: Negotiating and Closing Offers

This is the fourth and final part in my “hardball recruiting” article series. We’re down to one or two final candidates, and the offer process is about to begin in earnest. When dealing with top people, expect resistance. Top people don’t look for jobs or accept offers the same way most candidates do. Since they’re looking for a better job, not another job, they want proof that it is better. They’ll balance long-term growth against short-term issues like compensation, job scope and location. They’ll also make their decisions in conjunction with other people ó so you need to convince not only the candidate, but also all of his or her advisors. This is time consuming and often frustrating ó but essential. When negotiating and closing offers, here are the steps you need to address: Step 1: Understand motivation for the job. Knowing why a candidate wants the job and who is your competition is important in putting an offer package together. Step 2: Create (or recreate) the opportunity gap. Candidates accept offers based on what they’ll learn, do, and become in comparison to other opportunities. Step 3: Test the offer. Never make an offer until you’re sure it will be accepted. Step 4: Negotiate the offer. It’s a solution, not a transaction. Step 5: Keep it closed and then network. It’s not over until it’s over, and sometimes not even then. Here are some important guidelines to consider as you push and pull the final candidates through each of these steps. 1. Understand the competition and the candidate’s motivation for the job. By the second interview, you need to know what’s motivating the candidate to move forward. Ask the candidate what she or he is looking for in a new job, and why this is important. Dig deep to determine what’s really motivating the person to look. If the candidate is leaving a bad situation. it’s called going-away motivation. If so, the likelihood of a counter-offer is lessened, and closing the person at a reasonable offer is more likely. If the person already has a good job, or has other competing offers, it’s called a going-towards motivating strategy. In this case, you’ll have to do a much better job of positioning your opportunity as the superior one. 2. Create an opportunity gap or job stretch. Top people accept reasonable offers because the new job offers more challenges ó more opportunities to learn, develop, grow, and become better. This is the opportunity gap. Recruiters and hiring managers need to create this opportunity gap during the course of the interviewing and selection process. Using the performance profile and a performance-based interview provides the background information needed to clearly describe to the candidate the career differences between the job you’re offering and every other opportunity. Describe the projects and challenges, and show how this is bigger or more important than their current job or a competing one. Clearly demonstrate that the job has 15% to 20% stretch in it. This is what the best candidates tell their friends and advisors about why they’re accepting your offer with only a modest increase in compensation. The bigger the opportunity gap or stretch, the less resistance you’ll face during the close ó and the less important compensation will be. 3. Test interest to maintain open lines of communication. During the closing process, ask your candidates questions like these to test interest:

We’re now putting together our final list of candidates. Based on what you now know about the job, would it make sense to put you on this short list?

If we could put an offer together that makes sense to you, is this something you’d seriously be interested in considering?
Would you be open to exploring an offer in the $X to $Y thousand range?
If we could put an offer package together in this range, when could you start?

Each of these questions becomes increasingly more precise with respect to compensation needs, start date, and acceptance. This is a good way to keep the lines of communication open, and naturally negotiate the offer package. 4. Negotiate the offer. It’s important to test all aspects of the offer and obtain the candidate’s agreement before you formalize it. This way, you’ll never make an offer than won’t be accepted. Sometimes candidates say no or are evasive when getting down to the final close. The recruiter’s job is to ask enough questions to understand the candidate’s reluctance, persuade the candidate to keep an open mind while you get the proof needed, and then convince the candidate to proceed based on this information. Here are three techniques you can use to do this:

Uncovering objections. When a candidate says they need more time, don’t go into sales mode; instead ask why. One way is to ask the candidate where he or she stands on a 1 to 10 scale, a 9 or 10 meaning they’re ready to accept an offer. If they’re somewhere between a 6 and 8, ask the candidate what it would take for them to get to a 9. Once you know the cause of the reluctance you must either address the issue or convince the candidate that it’s not as important as he or she believes.
Close upon an objection. Once you know the objection, use a trial close by asking, “If we could meet your concern on that item, when could you start?” If the candidate doesn’t give you a start date or sounds evasive, that’s not the real concern. Sometimes you have to cycle back a few times to find out the real concern and validate it this way.
Testing offers. Once you’ve uncovered all the concerns, ask the candidate when they would formally accept an offer if the package could be put together in the next few days. If you’ve addressed all of the candidate’s concerns properly, candidates will enthusiastically tell you they’re ready to accept once they review the offer and discuss it with close advisors. Any hesitation at this point is cause for concern.

Concerns at the offer stage are most likely due to the possibility of a counteroffer or an offer from another company. If the candidate says they need to think about it after going through the above steps, just say you’re surprised that at this late a date the candidate is reluctant to commit. Ask if it’s due to salary or the possibility of a counteroffer, or some other offer. Whatever it is, you’ll need to start the close process over. Don’t give up. If the issue is salary, find out what the competition is offering or what the candidate thinks is fair. Then say something like this: “I’m not sure we can get to that level, but if we could, would you then be willing to accept our offer?” This is how you test the validity of the offer and the quality difference between two jobs. If the candidate hesitates to give you a start date or is evasive, something else is the problem. If the person is even considering the possibility of a counteroffer, you’ll have to nip this in the bud. In this case the best defense is a good offense. Walk the candidate through the resignation process and tell her what to expect. Ask how her manager will react and suggest that the candidate needs to say “not interested” when the idea of a counteroffer is mentioned. Ask the candidate how she would feel if someone who worked for her accepted a counter-offer. Your goal in this discussion is to paint a person who accepts a counteroffer as misguided. You can’t afford to lose a good candidate to a counteroffer, so you need to be direct. 5. Keep it closed and network. Good recruiting doesn’t stop when a person has accepted an offer. Good recruiters must make sure the person shows up. They stay actively involved until the person starts. This could mean arranging a lunch for the new employee with the hiring manager or a meeting to review the performance profile. Then to put icing on the cake, good recruiters will formally meet with the new employee soon after starting, and get the names of the best people the person has ever worked with. Good recruiters will then call and network with these people, and start filling more tough assignments with more top people. That’s what good recruiters do. Good luck. Make some hiring manager famous.