When It Comes to Hiring the Best People, It’s Never About the Money
February 3, 2015
One concern I often hear from recruiters is that they can't beat out their competitors when it comes to compensation.
I recently ran a webcast on SMB (Small & Mid-size Businesses) recruiting and the concern there was even stronger.
I contend this is just a straw man – an excuse. Here’s how you can diminish the importance of compensation:
1. Don’t use compensation as a conversation stopper.
As soon as you get a candidate on the line, ask if the person is willing to discuss a potential career opportunity. When they say yes, anticipate the compensation questions and say “Great. Let’s first see if the opportunity makes career sense, and if so, we can then see if the compensation matches your requirements.” What you’ll discover is that once the person has a fuller understanding of the job and the career potential, compensation becomes just one of many factors to consider, not the primary one.
2. Slow Dance.
It takes the best candidates – those who aren’t looking and those with multiple opportunities – more time to collect all of the information necessary to make a fully-formed career decision. Recruiters who are focused on filling positions quickly tend to assume all candidates have an economic reason to accept the job. It’s not true. What is true is the need to slow down and share information, not filter each other out on short-terms factors.
3. Conduct a needs analysis, not a box-checking assessment.
When a candidate agrees to talk about a possible career move, don’t go into box-checking mode. Instead, suggest that you’d to quickly review the person’s background and then give a high-level overview of your open job. Then say that if the job appears to offer a potential career move, you’ll schedule more time to talk in more depth.
4. Create the opportunity gap.
During the first call, the recruiter’s objective is to compare the person’s current role to the open job opportunity. This is easy if you’ve prepared a performance-based job description with the hiring manager. These types of job descriptions are equivalent to the product knowledge any good sales person needs to possess. Without it, the recruiter is seen as only a gatekeeper.
The objective of the first call is to find enough information about the candidate to offer the possibility of a 30% increase consisting of some job stretch, faster growth and a modest bump in compensation. Use gathering more information to determine these factors as a reason to arrange a more detailed conversation.
5. Negotiate the job, not the compensation.
A bigger job can often offset a modest compensation increase. If your job is not big enough for the candidate, ask if the person would be open to continuing the conversation if the job offered more stretch and/or growth.
6. Get the candidate to sell you.
Before you negotiate the final offer, ask the person if he or she would want the job if it weren’t for the compensation. Then have the person tell you why. If the answer is superficial, do not hire the person. People who haven’t convinced themselves about the career opportunity inherent in the job are problems waiting to happen. These are the people who quickly become your disengaged under-performers.
There’s more to recruiting passive candidates and negotiating an offer, but it’s important to understand the differences between transactional and consultative recruiting. The former is driven by compensation, the latter by opportunity. Transactional recruiting is based on offering commodity jobs where price is the primary differentiator, while consultative recruiting is driven by growth and opportunity with price being one of a number of variables to negotiate. The objective of the first is to hire decent people quickly and avoid big mistakes, while the objective of the second is to hire the best person possible, not the best person who applies. When it comes to recruiting and hiring the best people, it’s never about the money.