• 
• Training
• Consulting
• Resources
• Store
• About Us

• » Articles
• › The Official Rules for Hiring Top Talent
• › Newsletters

The Science of Recruiting - Part 9: Negotiating and Closing Offers - The Set Up

By Lou Adler, February 27, 2004

Now we're down to one or two final candidates, and the offer process is about to begin in earnest. If you've uncovered the candidate's key concerns as described in earlier articles in this Science of Recruiting series you know what you have to do to move the process to closure.

Read more articles by this author.

Related Topics:

The Science of Recruiting, Negotiating, Recruiting

Related Articles:

The Science of Recruiting - Part 10: Closing and Negotiating Offers - Advanced

The Science of Recruiting - Part 8: Influencing Hiring Managers - The Hiring Decision

The Science of Recruiting - Part 7: Influencing Hiring Managers: How You Present Candidates Matters

Again let me reinforce the point that when dealing with top people, expect resistance. This is because 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. This includes more details about the job, the company, and the people involved. They'll balance long term growth against short term issues like compensation, job scope, and location. They'll also decide with others, so you not only need to convince the candidate, but also all of his or her advisors. This is time consuming, and often frustrating, but essential.

When recruiting, negotiating and closing offers here are the steps you need to address. We'll cover these points in detail in these final two articles in this series.

Step 1: Understand motivation for the job - knowing why a candidate wants the job and the 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: Close the offer - it's not over until it's over, and sometimes not even then.

When all is said and done, recruiting is about getting top people to accept and offer and start on the job. Closing the offer is what recruiting is all about. Sourcing and interviewing are just preliminaries. And everything else is just wasted if you can't close. Here are some important guidelines to consider as you push and pull the final candidates through the offer and closing process.

Step 1: Understand the competition and the candidate's motivation for the job

When you get ready to close, you need to know what's motivating the candidate to move forward, and who the competition is. Asking is the simplest way. For one thing find out if the candidate is leaving a bad situation. This is 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, than you'll have to do a much better job of positioning your opportunity as the superior one. This is called going-towards motivation. During the interview ask the candidate what she or he is looking for in a new job, and why this is important. Dig deep and find out what's really motivating them to look. Find out early what decision-criteria they'll use to accept an offer if one were to be extended. Catalog the objections and concerns you've heard along the way. All of this provides valuable clues to understand underlying candidate motivation.

Step 2: Create an Opportunity Gap or Job Stretch

Fundamentally, top people accept reasonable offers because the new job offers more challenges, and more opportunities to learn, develop, grow, and become better. I refer to the difference between what a new job has to offer, and all competing jobs as the opportunity gap. It is the goal of every recruiter and every hiring manager to create this opportunity gap during the course of the interviewing and selection process. It starts by understanding where the candidate is today, and where he or she wants to go in the future. This is why the job success profile is so important as well as the need to conduct a comprehensive performance-based interview. This provides the background information needed to clearly describe to the candidate the career differences between the job you're offering and every other opportunity.

Throughout the course of the interview process continually ask the candidate what she or he needs to know to move to the next step. When you come to the final stage, summarize the challenges in the job and compare these to where the candidate is today. Quantify this in terms of real learning opportunities. Be specific. Describe the projects and the teams and show how this is bigger or more important than their current projects or team. Clearly demonstrate that the job has 15-20% stretch in it. Write this stuff down. It's all vitally important. This is what the best candidates will eventually tell their friends, family and advisors 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, and the less important compensation will be.

Step 3: Test Interest to Maintain Open Lines of Communication

During the closing process ask candidates these series of sequential questions as you narrow down the final list. Based on the candidate's answers you'll be able to provide additional information along the way towards making the final offer.

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 you have some concerns or issues that would hold you back from seriously considering this job, I'd like to know what they are now, before we go any further in the process.

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. To maximize acceptance rates and to negotiate fair and equitable offers, you need to test every component of the offer completely before ever making it formal. This way you keep the lines of communication open. Candidates will freely tell you their concerns until you make the formal offer. Once a candidate has an offer, questioning about whether they'll accept it or not, is seen as pushy behavior. Candidates will respond with the traditional, "I'll have to think about it," response. While you do want candidates to think about it, you want them to tell you what they're thinking; that's why testing offers is so important. Not only will you get more information by testing, you'll also have a chance to react without anyone losing face. Testing offers this way is a much more comfortable environment to negotiate the offer package.

By the way, by asking the person to suggest a start date, you're testing real interest. If the person actually gives you a date it means they're quite interested. If they hesitate or evade the answer, it means they still have many concerns or other opportunities. What to do when they say "no" will be the topic of the final article in the Science of Recruiting series, as well as what to do after the say "yes."

Bottom line, 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 that won't be accepted. By testing offers this way the negotiations will be more professional, and you'll also be the last offer the candidate receives. This is the best position to be in to minimize counter-offers and prevent other competitive opportunities from stealing your candidate. You need to be a great recruiter to get your top candidates to accept offers 100% of the time. But quite frankly, that's the real science of recruiting.