Once a candidate has successfully crossed the hurdles to become an employee, how do you structure an offer for them?
The answer is not as simple as asking the candidate what they seek, and if their ask is reasonable, extending the offer.
What Factors Into An Offer?
- Where do their skills place them in comparison with other employees? Above, peer level, or below the current staff (only good if your company needs an entry level employee).
- Are they proficient in a needed skill that no one on your staff has?
- Is the candidate a strong cultural fit? (Reference checks are beneficial in determining Cultural Fit)
- Does your company factor Employee Compensation Equity into offers?
The Trials With Compensation Equity
Compensation Equity is not always equal. How is that for a leading line? And it is true.
Consider – if your company has more than one office location, how do you measure “Equity?” By straight salary across all company offices? If that is the case, are you considering the spendable income in each location compared to the other locations? Consider, each state has its own income tax laws – some states do not charge income tax and others do charge income tax, each at a different level.
What is the cost of living in that office location? Across the state, the cost of living may be different in different locations. According to the CNN Salary Calculator (I have found to be reliable)
if you are earning $50,000 per year in Albany, NY, you would need to earn $112,192 in Manhattan to have the same spendable income.
Would your employee in Manhattan earn more than double your employee in Albany? How does your company judge “fair”? Obviously, I picked two cities in New York State with a huge difference in cost of living. Should this be a criterion? What happens when you want to move that NYC employee back to Albany?
Candidates look at spendable income more than ever. They are not afraid to decline an offer if they feel that they will not earn enough money to live at the level they are accustomed.
When Was Your Company’s Last Compensation Study?
If your company last conducted a Compensation Study more than 2 year’s ago, your company is behind most of your competition right now. The employment market is moving that quickly today.
There are two dangers with old compensation studies:
- Your Employee Equity is based on an old study. This could mean your top staff may be underpaid, and susceptible to the competing Recruiter’s call – “What? Is that ALL they are Paying You?” I have made that call many times during my Talent Attraction career – and many candidates took the bite.
- You offers may be too low to attract top performers.
Neither of these situations help a company attract and retain top talent.
What Is My Suggestion To Improve Our Offers?
I suggest that your company, if it has enough staff, conduct an annual Compensation Study. Remember, how much does it cost your company to have an open position? More than simply the work not being completed and paid for. The open position may cost employee morale when other employees are overworked.
An annual Compensation Study ensures that your employees are earning what they deserve (according to the market), and new employees in all locations are offered the right compensation offers to attract them.
This is not an easy solution. However, few Talent Attraction solutions are easy solutions. The companies that master them are the industry leaders because they Attract and Retain Top Talent.
Talent Attraction is Better than Talent Acquisition!
If you would like a conversation on how to ATTRACT talent instead of using an Applicant Tracking System or HRIS to screen them out, we should chat. Call me directly at 435-714-4425 (mountain).
I am available to consult with your company to improve your Top Talent Attraction strategy. Attracting and integrating Top Talent gives your company an industry edge. The process is worth the effort by improving productivity, innovation, and profitability – Look at Google, Tesla, SpaceX, and Apple. Retaining Top Talent keeps your industry knowledge inside your company – instead of with the competition.
The RecruiterGuy.com Top Talent Attraction business model is my differentiator. I focus on one client at a time and charge a flat monthly fee. This model enables me to attract new talent to your organization while identifying and suggesting improvements to your company’s Talent Attraction process, including Manager Interview Training. https://recruiterguy.com/
Learn how I coach my Career Transition Clients in my most recent book – Employee 5.0: Secrets Of A Successful Job Search In The New World Order http://amzn.to/2D9w39f My book includes an appendix with action verbs and sample interview questions.
I help organizations Recruit, Onboard, Actuate, and Retain Top Talent.
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