Why the Client Should Never, Ever Discuss Money With the Candidate

Most recruiters and consultants realize the importance of preparing their candidates to “never, ever, discuss money” with one of their clients.  However, how often do you prepare your clients to “never, ever discuss money” with one of your candidates?

Recently, I received a call from a recruiter who wanted to discuss his process for working with clients.  As he detailed the step-by-step process, I was stunned when he reached the “offer stage” and stated, “… at that point I step out of the picture and allow my client and candidate to speak directly with one another about the specifics of the offer.”  Although I did not say anything initially, when he completed his description, I made this statement:

“Anytime you have a candidate and a client in direct discussion about compensation, you have lost control of the process.”

He then asked, “What if the client brings up the subject with the candidate?” or “… asks the candidate how much they are currently earning?”

My reply was:

“There should never be a circumstance where your client brings up the subject of compensation directly with one of your candidates.  If you are doing your job correctly, there is no justification for your client to discuss this subject with any of your candidates.”

For many recruiters, this approach may appear to be radical or even impossible to implement or police. Nevertheless, it is essential if you are to maintain control of the process, and be viewed by both your client and candidate as trustworthy and capable.

The key is your positioning.  You establish this positioning when you first take the order/assignment with the client and when you conduct your initial interview with the candidate.  For the sake of this article, let’s focus on the client side.

In order for one of your clients to present an offer that will be accepted by your candidate, they need to know four numbers:

1. Your client must know what they can afford to pay.

If they say it is “open” or “totally depends on the person” or “whatever it takes,” do not accept any of these as a valid answer.  Ask what amount they have budgeted for the position?  If they have not budgeted an amount for the position, it also means they have not budgeted an amount for your fee.  Is that the type of client with whom you wish to work?  I think not.

There can be many reasons why a client could be reluctant to disclose the range of compensation to a recruiter.  They may suspect their range is too low, and, therefore, you will not work on their opening.  They may believe that if you know the true range of compensation, you will only present candidates at the high end of the range because you will receive a higher fee if one of them is hired.  They may not trust you to keep the information confidential.

If any of these reasons are identified, you should not proceed.  You have yet to earn the trust of your client.  This lack of trust will show up again and again in many areas of the process, and severely compromise your ability to effectively create a positive outcome for your client.

2. Your client must know the current market value for the type of individual required to successfully perform in the position. 

An experienced recruiter is the best source for this up-to-date information.  As a matter of standard practice, concurrent with your search efforts, you should be compiling compensation information that can be used to clearly establish market value.

3. Your client must know the compensation history and/or the present or last level of compensation for each of your candidates.

Obviously, this is information that you should share with the client in preparation for their first interview with your candidates.

4. Your client must know the exact level of compensation that needs to be included in the offer in order to gain an acceptance from your candidate.

Once again, you should be providing this specific information to the client. You must determine with your candidate two critical numbers:

  • First, what is the lowest level at which they would even consider an offer, one dollar below which you have his or her authorization to instruct your client to offer the position to someone else?
  • Second, what is the specific offer number they would feel comfortable in accepting on the spot?

Armed with this information, you should be able to guide the client in preparing an offer that meets or surpasses the second number.  If this cannot be accomplished, prepare your client to either move to their secondary candidate (one of yours if you have done your job properly), or be prepared for an offer turndown.

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As you can see, three of the four numbers the client must know in order to present an offer that will be accepted should be provided by you.  And the first one, their budgeted number, should be clearly identified before you commence any efforts on their behalf.  The one exception to this might be a situation where the client engages your services to help them establish a budgeted compensation range for the position.

If you are correctly positioned at the time you write the order/assignment, and your client understands the importance of knowing the four numbers referenced above, you will have established yourself as a critically important controlling force throughout the process.  Also, you will have removed any reason for the client to ever directly discuss money with one of your candidates. Your client will understand that if you provide them with timely and accurate information, there is no valid reason to discuss the subject of money directly with one of your candidates.

However, old habits are hard to break.  If, in your interview follow-up, you determine that the client has brought up the subject of compensation with one of your candidates, ask them, “Specifically, what was your reason for asking that question?  What were you trying to accomplish?”

Listen carefully to their answer.  They may simply state, “I forgot” or “It’s an old habit I’ll need to break”If this is the situation, remind them of the benefits of keeping those questions between the two of you.

On the other hand, if the client responds to your question by saying something like, “That’s my job” or “I needed to get a feel for it directly from the candidate,” stop everything.  You are not properly positioned.  You have not earned the trust of your client.  You need to have a frank and open discussion regarding the importance of your role in the process.  To proceed otherwise would be counterproductive,

Remember: If your client issues an offer that is turned down by your candidate, you have not correctly performed your function in the process.

No excuses accepted.  You have not properly selected and/or served your client.  Other than “acts of God,” when an offer is turned down, everybody loses.  If, based on your proper positioning in the process, you determine that the offer is not going to be accepted, do not allow it to be issued.

One of the earmarks of a true professional in this business is a near perfect offer to acceptance ratio.  They know the importance of making certain that no offer will be extended until an acceptance is assured.  That is one of the major benefits for a client in working with a professional recruiter.  It also is a strong indication that your processes are designed to serve the best interest of everyone involved.

As always, if you have questions or comments about this article or wish to receive my input on any other topic related to this business, just let me know. Your calls and e-mails are most welcome.

Photo courtesy of imagerymajestic / FreeDigitalPhotos.net

Recipient of the Harold B. Nelson Award, Terry Petra is one of our industry's leading trainers and consultants. He has successfully conducted in-house programs for hundreds of search, placement, temporary staffing firms and industry groups across the U.S., Canada, Mexico, Australia, New Zealand, Russia, England, and South Africa. To learn more about his training products and services, including PETRA ON CALL, and BUSINESS VALUATION, visit www.tpetra.com. Terry can be reached at (651) 738-8561 or click to email him.

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