Companies & Candidates: The 5 Ground Rules of Job Offer Negotiation
Debbie Goodman-Bhyat, CEO of Virtual Coaching Partners, recently contributed to an IOL Business Report article on job offer negotiation. View the original article on iol.co.za.
As companies and candidates enter a fresh hiring season in 2020, the time will come where both parties stand at the door of a potential new partnership – arguably the most fragile period of the hiring process.
At this stage, when both have clearly indicated their interest in working together, there are certain rules of engagement which must be followed on both their parts to ensure neither snatches defeat from the jaws of victory, a leadership expert says.
“After the screening and interview processes are complete, sealing the deal becomes a delicate dance, where both employer and candidate must push for the best deal for themselves, without losing the goodwill established to date, and possibly jinxing the entire thing,” says Debbie Goodman-Bhyat, CEO of Jack Hammer, Africa’s largest independent executive search firm with offices across the continent as well as Los Angeles.
In her soon-to-be-released second book, Inside the Interview Goodman-Bhyat shares insights and advice based on her decades-long experience as an executive search expert focusing on the sourcing and placement of top talent across the globe.
She says that the best time for candidates to negotiate for the best possible offer, is at the point where the prospective employer has indicated that they’re keen to make one and get the candidate on board.
“However, candidates need to bear in mind that just because the company has said they’re interested, doesn’t mean it’s a done deal, and so it’s really important to keep a balance between what you want, and not frustrating them or creating tensions over the negotiations,” she says.
Because if candidates overplay their hand, they risk turning off an employer who was ready to make a decent – if not shoot the lights out – offer, and potentially lose out on what could have been a smart, strategic career move.
“At the same time, if there are elements of the offer that you’re not happy with, now’s the time to voice your concerns and ask for what you really want. It’s all a very delicate balancing act, not to be underestimated,” says Goodman-Bhyat.
She says that as search consultants, Jack Hammer often need to act as a filter between the candidate and the employer, so that neither party comes across as too aggressive, too grabby or greedy, too demanding, or too stingy.
But for those candidates and companies without the advantage of search support, there are a few pointers to guide them through the treacherous waters of final negotiations, she says.
1) Ensure they fully understand all elements of the package.
“There might be some hidden benefits that aren’t evident at first glance, that make all the difference between an average offer and an excellent one,” says Goodman-Bhyat.
“So make sure that you are comparing apples with apples. Know your net figures (the amount of money that you receive in your bank account each month) AND the value of the benefits you’ll be receiving. Compare these with what you currently have on the table. Just because the net cash is the same or marginally less than your current package, does not necessarily mean that it’s a bad offer.”
2) Negotiate all elements of the package at once, without horse trading after the fact.
“Don’t ask for an increase on the base package, and then after that for the number of days leave, and after that for an allowance for further studies,” she says.
“Because each time, the people who are handling the contract changes will most likely have to motivate to several different stakeholders, and this becomes tiresome, breeding resentment.
“Thoughts like, ‘Does this candidate want the offer or not’, or ‘Again… are you kidding me’, are typically what will happen behind the scenes in this kind of scenario. HR professionals frown upon constantly going back and forth to motivate for more money or changes to the benefits after an offer has been approved internally,” says Goodman-Bhyat.
3) Substantially motivate their request for more money.
“You’ll need to motivate why you think you deserve more money,” she says.
“One reason could be that you expect an increase on your current package at your current employer. Another could be that you believe you’ll be generating X value for the company, and believe you’re due more.
“But also try to gain insights into the remuneration policy at the company. Organisations really don’t like to increase packages beyond the salary band for a certain level of employee. So you may need to keep within the range (albeit at the top), but then ask for something else instead.”
1) Understand that candidates will want to match or increase their salary.
“Start out with an expectation that any candidate who joins your company is going to want to earn at least the same, but preferably more, than what she’s currently earning,” says Goodman-Bhyat.
“Exceptions to this are situations where the candidate’s last package was significantly higher than what is market related, for instance where her previous company made a silly offer in order to get the candidate to come across, or to take her out of the market.
“Explaining this to the candidate, and motivating for your case in a balanced way is key. Candidates typically think that all employers are trying to pay them the least amount of money possible. You’ll need to explain that you’re wanting to pay fair value for skills, and will be willing to incentivize for excellence.”
2) Ensure they understand the entire package and all incentives.
“Don’t just look at the cash portion, you need to be on top of all the benefits included in the package, including non-financial ones.
“When it comes to putting an offer on the table, you may be able to compensate for a lower base package increase if you have other benefits to offer that the candidate doesn’t have access to currently.”
“The hiring process is a time-consuming, costly and often exhausting process both for the company and the candidate,” says Goodman-Bhyat.
“Finding the fit is intensive work, and if one does reach that stage, where a future relationship appears to be a win-win one, care must be taken both on the part of the company and candidate to ensure a fair agreement. Failure to do so can come at the unnecessary cost of what could have been a great hire for the company, or a wise move for the candidate.”