Straight Answers to Real Questions
Question: I’m the CFO of a $300mm retail chain. I’ve been interviewing someone to fill a Director, Financial Planning & Forecasting position we’ve got open and we’re just about at the offer stage. The person I’m considering hiring is currently earning $150,000 (plus bonus) which is right at the top of our salary scale for positions at the Director level.
The candidate has indicated that they’re very interested in the position but they’ve also indicated that they’d like a salary of at least $165,000 to make the move. I think I can go as high as $155,000 (plus bonus) without upsetting H.R. too much but I’m pretty sure I can’t get anywhere close to what the candidate is asking for. Any thoughts?
Answer: First of all, in my experience, a few thousand dollars (or lack of) shouldn’t ever be the reason the right person doesn’t get the right job with the right company. That being said, if there is a gulf between what the candidate is looking to earn and what the company wants to pay, both sides need to be willing to compromise.
The first thing to realize is that in most offer situations, there’s a certain amount of emotion and ego involved. You want to know that the candidate is very keen on the position you’re offering (and by extension keen on you as a prospective boss as well) and the candidate wants you to show the love through the amount you are willing to offer them.
You also need to keep in mind the optics of an offer from the candidate’s point of view. An offer says two things: how much you value the candidate and what kind of employer you’re going to be on a go forward basis. In this case, if you offer your prospective Director of FP&A the exact same package they’re getting with their current employer, it could and usually will be interpreted as you not really being that keen on the candidate with a subtext that you may be stingy with future increases.
Even if you take the time and trouble to explain your rationale to the candidate and explain to them that as much as you’re very keen on them, your hands are tied by the parity cap, you may not be as persuasive as you think. Because in most cases, the candidate isn’t the only interested party involved. Their significant other, their pals, in some cases even their parents are looking at the offer as well and pitching in their two cents’ worth.
The bottom line is that you need to do whatever you can to assuage the candidate’s (and their pals’) concern that you don’t value them as much as you should.
If you really are hard up against a salary cap, see if you can reach into a different pocket to sweeten the pot. This could take the form of more bonus, flexibility in terms of working from home or a 407 pass just to name a few. The point is to come up with a demonstration that you’re going the extra mile to make them happy. And in turn, they should reciprocate and meet you half way.
In most cases, the difference in a company’s and candidate’s financial requirements isn’t large enough to make a material difference to either party. The ten thousand dollars difference between you and your potential new hire should shrink to a manageable amount with a little bit of creativity and demonstration of goodwill from both sides.