After a tedious search, you’ve found your number one candidate. He’s experienced in your space, he fits your culture, his references rock. There’s just a few hitches in the way. Your two biggest competitors want him too. One’s already made an offer and the other is about to (and probably holding out till you make your move). His current employer, recently acquired, also has a place for him in the new company. Oh – and he doesn’t know what the severance agreement is, but that should be forthcoming in a few weeks time. What’s an employer to do?
This is a very real and often probable scenario in a competitive employment market for in demand candidates. Interestingly, the outcome is often unpredictable. Though the incumbent employer may obviously seem in the Director’s chair, the employee may see it as a case of “The Stepford Wives”. The outside appears the same, but the inside has been gutted. Surprisingly, employees often like the right to choose where they work, especially in entrepreneurial marketplaces, where opportunity and compensation ride alongside risk with earlier stage companies.
Often, a candidate finds the severance package not worth staying for; mostly depending on the length of commitment required, compared to the amount of the package offered. Often, the real competition is with companies similar to your own. IPO prospects, companies with newly approved or launched products, or maybe the lure of an old boss who he’s experienced success with before, can all put the kibosh on your bid.
What can you do to compete? TO WIN? Closure begins before the interview process starts. In order to distinguish yourself from the pack, your company must stand out. Investors, board members, management team, technology and track record must all be compelling. In addition, the search process itself must be able to uncover and lure the best prospects. Companies today must be prepared to streamline the process and make quick decisions. You can be certain the competition is.
Ultimately, acceptance boils down to the offer. Companies who successfully land their first choice understand that getting an acceptance is predicated on a great comp package. Critical components that are the biggest players in the process are base comp, bonus and/or commission plan and equity. Knowledge of market comps and utilizing comp comparison surveys may be a good start, but ultimately a candidate is valued at what the market will pay. In a market with heavy demand, even the most reliable salary guides are out of date a few months after they are published. It’s important to know what your competition is doing, including current trends in bonus plans and equity awards.
If internal equity or other impediments limit salary or bonus levels, get creative. Sign on bonuses, severance agreements, extra vacation weeks, education opportunities, flex hours and gym memberships are commonly offered to sweeten the deal. Any and all of these can get you that much closer to ‘yes’.
If you think your company is unique to the world and a candidate will consider this ‘opportunity of a lifetime’ for a less than stellar offer package, you need to be reminded that today’s candidate is sophisticated and all components of the offer will be carefully scrutinized and compared. There are many other exceptional companies clamoring for his talent and a lot of information for the candidate to research before considering acceptance. Holding out on your best offer to see if the candidate bites or you can get him cheaper can easily backfire. Your initial offer tells the candidate a lot about how you value him and the position. On the back end, there is also the risk your best talent will be poached for a better package down the road.
There are no magic bullets to guarantee an offer gets accepted. Companies with strong management teams, technologies, opportunities and offer packages have a higher probability of landing their lead prospect. And that’s a WIN for all!