Recruiting Basics: Making Offers

This article was originally published November 12, 2004. If you’ve ever had an offer turned down or had a candidate say, “I have to think about it,” you made the offer too soon. You’ve probably also broken the cardinal principle that every recruiter must follow: “Never make a formal offer until it’s been 100% accepted. Test it first, test it again, and continue to test it until the candidate says yes.” Then make the offer. Here’s how this “testing the offer” process works: What’s important is that you use a series of questions to test the offer once you’ve decided to move forward on making an offer to someone. Never formalize the offer (with a written, signed, and approved offer letter) without testing it this way first. Candidates often use offers to obtain counter-offers or negotiate other offers. By testing offers before you make them, you’ll be in a position to be the last company to extend the offer, minimizing the chances the candidate will renege. More important, testing offers this way provides the candidate an opportunity to openly express his or her concerns. You then have a chance to address the concerns and negotiate the offer package under less stress. While you want the candidate to have reasonable time to think about the offer, you also want to know what the person is thinking about. They will only tell you this if you haven’t made the offer formal. It’s important to test interest throughout the interviewing process. Here’s a question you can use throughout that process:

Based on what you now know about the job, is this something you’d be interested in pursuing?

Assuming the answer is “yes” and you’ve moved the candidate successfully through the selection process, let’s fast-forward to the offer. Here are some questions you can use to test offers and negotiate compensation:

Based on what you now know about the job, is it one you’d be willing to accept if an offer was fair?

If the candidates hesitates at this point, it usually means that something serious has come up. The recruiter needs to figure out what it is before extending the offer. Try this to uncover the concern:

It seems to me you’re a bit reluctant to move forward. This is surprising, given all of the interviews and effort involved so far both on your part and others in the company. Something about the job must still be bothering you. Would you mind telling me what it is?

You must uncover the problem. Sometimes what candidates tell you at this late stage is misleading, an attempt to disguise the real issue (another offer, doubts about the job, a counter-offer). So whatever they give you as a concern, it’s important to validate it. Try the following questions. The pattern is called “closing upon a concern.” Once you know the stated concern, ask:

If we could satisfactorily address that issue ó which I’m not sure we can, but if we could ó would you then agree to (schedule the next interview, meet with the hiring manager, take the test, start by a certain date)?

If the candidates still hesitates, try this:

It seems to me that there is something else bothering you that we haven’t discussed yet. Most people are at least willing to move forward if their biggest concern is addressed. Since you are still uncomfortable going forward, I assume there is another issue involved. Can you tell me what this is?

Pause. If the person is evasive, try these ideas:

Would you be willing to discuss these with (the hiring manager, the hiring manager’s superior, the head of HR)? Would you be willing to discuss them if I could get you some additional information?

When you finally uncover the real issue:

I can understand and appreciate why that is a big issue for you. I’m not sure we can address it, but I think it’s worth trying. I know that everyone felt you were a strong candidate, and I’m sure (the hiring manager e.g.) is willing to see what can be done. Just so I’m perfectly clear, if we could address your concern about (describe concern here; e.g., need more money) by (describe proposed action plan; e.g, getting the offer bumped by 5%) you would then (describe the next step; e.g., accept the offer, or go through the final interview)?

Here are some other questions you can use to negotiate compensation:

What do you consider a fair offer? (Pause. Let the candidate answer.) Why do you think a compensation of that level is justifiable? (Make the candidate justify what they’re asking for.) What is your current salary? What is the compensation range of other situations you’re looking at? When is your next review? What did you get as an increase last year? I’m not sure we can get to that level, but if we could, when would you be in a position to start?

This last question is called a secondary close, and it’s another way to test the candidate’s true interest. If the candidate hesitates to give you a start date, something else is of concern. The recruiter must then go back and uncover the real concern before moving forward. Once this is accomplished, you can come back to negotiating the compensation. If the salary demands are too high, try to deflate them with the following statements: (Gathering this information also provides you with the ammunition you’ll need to go back to compensation, HR, and/or the hiring manager to put together a better package. This is much easier for everyone concerned when you haven’t already finalized and extended a formal offer.)

I’m not sure we can get to that level. A few of the other candidates we’re also considering are making about 10-15% less than you are now, and they’re more open to the range we discussed. So you’re a little on the high side, given the current market. While I can’t guarantee anything, knowing what you know about the job, what is the absolute minimum offer you’d be willing to accept? Just so I’m perfectly clear, you are telling me that if we can’t get to the $______ level, you are not interested in pursuing this position? Do you feel this job offers significant job stretch to you? (Pause.) If so, then the real value in the job for you is how much you’ll be able to grow. Your compensation needs seem high given where you are now, and what you’ll be learning. Have I missed something in this? In my opinion, it’s best not to shoot for the maximum compensation you can possibly get. This frequently is the cause of some ill-will and creates unnecessary tension when you start. It’s better to get a fair increase initially, and then prove yourself once on the job. While I can’t guarantee anything, would you be open to at least consider this, if we could arrange some type of added performance bonus or early salary review? Let me ask you this: Who do you think has more flexibility to consider other jobs in the future ó someone currently over the average for the position, or someone below the average? If we could finalize the offer as discussed, when could you start?

This last question is a secondary test, to see if all of your earlier efforts were successful. If you get some hesitation, or the candidate says “I have to think about it,” you have a problem. There is still something else happening that the candidate is not revealing to you. You’ll need to start over to find out what it is. Under no circumstances should you make the offer formal. However, if the candidate gives you a date, move on to these additional tests: Second test:

If we could get the offer approved in the next day or so, when could you give us your formal acceptance?

Final test:

If we get the offer to you later today, could you give us your formal approval by tomorrow?

Go slow when making offers, but in general never give the candidate more than 24 hours to accept a formal offer, unless there are some extenuating circumstances. If they need more time than this, it means you rushed the offer. Make sure everything is discussed, and that the candidate’s real concerns are addressed during the pre-offer and negotiating process. Of course, if there are complex contractual issues that need to be addressed (e.g., relocation), make sure you have a formal commitment that the candidate will take the offer as long as these contractual issues are all met. This is a reasonable contingency. The underlying principle is to make sure that all of the key terms are agreed upon before you make the offer formal. Cover things like salary, the benefits package, vacations, training, car allowance, bonus, options, and everything else you can think of. Do not assume anything. Frequently something minor, like an early vacation or the insurance co-pay, can cause an offer to be turned down, or create unnecessary haggling. Testing offers is a core part of the recruiter’s arsenal for closing deals.