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Captain Obvious and the Lowball Offer

As a recruiter, I’ve had to learn to adapt to many different personalities. (Haven’t we all?) This applies to both candidates and hiring managers alike. When it comes time to make an offer, you’d better know the personalities on both sides very well if you want to make the deal.

There are candidates that can’t stand negotiating; they hate it as much as they usually hate confrontation. With folks in this category, you only usually get one shot at an offer. They’re not going to negotiate; they will either accept or decline, pointe finale.

Then there are those on the opposite side of the spectrum, no matter how good your offer, they have to negotiate; it’s in their DNA. In this case your offer better have one aspect that has wiggle room where you can give at least a little just to make the person feel like they done their duty. I liken this to buying a car. Most people don’t go into the dealer and offer to pay full price for the vehicle of their choice. In fact, if they don’t negotiate something, they usually feel like they either failed or got ripped off, or both.

Then there are the hiring managers. Some don’t like to negotiate and some do. Once upon a time I started working with a manager and had one hire that nearly fell apart because the manager does not negotiate after the offer is in writing, but the candidate wasn’t going to start to negotiate until he saw the initial offer in writing. I saved the deal, but really wish I had known up front how both people like to operate.

The worst case scenario for me though is always the lowball offer. There are some managers that always want to start low and negotiate till they get to the bare minimum the candidate will accept. It may seem like the manager is being cost conscientious, but this for me is always a critical mistake. It does not matter whether the candidate is active or passive, employed or unemployed, NEVER EVER LOWBALL AN OFFER.

To me it seems quite obvious that in doing so you immediately damage your relationship with the person that you want working with you for the next five to six (hopefully more) years. Yup, seems like a job where Captain Obvious should jump in with something to say. Sadly, Captain Obvious doesn’t always show up where needed; so on his behalf, I’ll spell it out.

  1. It’s an insult, plain and simple. The usual candidate reaction is “Really? That’s all you think I’m worth?”  They might not say it, but they are thinking it.
  2. Scenario A: Feeling insulted, the candidate tells you they’ll think about it and then drags things out for weeks while they try to get the competition to make a better offer, either that or they flat out turn you down.
  3. Scenario B: Let’s say the candidate needs this job, either because they are unemployed or their current work situation has something negative causing them to need to make a change. They accept the offer even though it is low. What will they spend the next six months doing instead of committing to you and your company? Look for a better paying job is what.
  4. Scenario C: Ok, we’ve started low, but the candidate can handle negotiations and the back and forth goes on until it comes to a place where the candidate is comfortable and HURRAY, they start working for you. The potential here is that there will always be a negative tinge to the relationship, that feeling of being insulted. Even if that is not the case, the other potential is that the candidate, now employee, will always be looking over their shoulder, feeling like you the manager don’t really feel like they’re worth what they’re getting paid. If times get tough, they’ll feel like their own head will be the first to roll. What do people do when they feel that their position is in jeopardy? Well hey, here comes Captain Obvious now. Why yes, that's right Captain. When people feel that there is a threat to their job they will... (drum roll please)... look for another job.

I’m not saying that negotiation is bad, far from it. It is a normal part of the process. As recruiters, we try to make sure that we know up front what the candidate is looking for and ensure it fits with where the manager wants to be. If we get it right, we can often make an initial offer that satisfies the candidate’s needs and the manager’s budget, but things don’t always work out perfectly.

The point is: don’t deliberately start out low just to try and get a better deal.  Start from a place that takes into account internal equity with the team, the duties and responsibilities of the position, and the experience and needs of the candidate. Look to find the middle ground that is win win for all parties involved. It isn’t always easy and yes there will often be negotiations involved; but if you start from this place and use open and honest communication, you start the relationship off on the right foot. This also means that you need to know when to walk away, but I’ll save that for later.

For the record, I’ll also state that an offer that only matches an employed person’s current compensation is, more often than not, one you should consider a lowball. (Not always, but often.)

But hey, we’re all recruiters here; we already know this stuff, right? Where’s the hiring managers blog? ...What do you mean there isn’t one? ...Sigh….

Views: 1519

Tags: Job Seekers, hiring manager, lowball, offer, recruiter, recruiting

Comment by Amy Ala on March 25, 2013 at 1:28pm

LOVE LOVE LOVE THIS. My previous company was notorious for NOT negotiating - by the time we got to an offer it was usually the "best final" offer and the result of a lot of negotiations between me and the manager.... however I would let the candidates know this was our process.

Comment by Tony Hogeveen on March 25, 2013 at 1:37pm

Thanks Amy, upfront knowledge is really key, if you know your manager's process, you can work with it. Surprises are where you run the risk of being derailed.

Comment by Amy Ala on March 25, 2013 at 1:57pm

Exactly. And I think explaining to the candidate that I am having these conversations on his/her behalf, also helps a lot. It's not as if the hiring manager just throws out a number and I go with it.... I don't know why people can't just be transparent about this (on all sides)

Comment by Derdiver on March 25, 2013 at 2:25pm

I have to say that I rarely "negotiate" with either a manager or candidate. Simply, I do the homework.  I know the going rates in the market place.  The manager knows this. I work in a world of contracts and those contract represent rates that I can pay in order for the company to make a profit. A person that either has a job or not and wants to interview for mine knows going in this is it. There is not more. It is my job to come to the table with viable candidates that know that this is what they are going to be paid.  When a candidate tells me that the money is not there and wants to negotiate with me AFTER the process normally sends me to the candidate next in line. This is a reality.  There are, at this time, in the US at least, considerably more people that are willing to work for a good wage.  Being honest with each other as to what that is at the front tends to stop confusion. Like my old boss said, "there is a led for every pot".

Comment by Tony Hogeveen on March 25, 2013 at 2:33pm

@Derdiver - understandable, I work predominantly on permanent hires and there are definite differences. I did a small amount of time in contract ERP recruiting, and youre right, the rate is often not negotiable.

Comment by Will Thomson on March 25, 2013 at 5:04pm

Tony, I love this article.  You know what I am seeing a lot in the marketplace right now?  Candidates lowballing themselves.  All the time.  I recruit in California a lot, and I just don't get it.  Why don't they ask for what they are worth?  Maybe they have been hit so hard by a recession that they are scared to death to ask for what they are worth.  Pay them what they should be paid.  You will have a happy employee and someone that will always represent your company in the right light.  Great read!  Thanks.

Comment by Ryan McCormick on March 26, 2013 at 9:27am

Tony, great article! I work in IT recruiting where good talent is scarce. Candidates who accept lowball offers are sure to take the next job they find with a better offer. Cheap = No loyalty.

Comment by Deanna O'Connell on March 26, 2013 at 10:10am

Tony, this article is spot on! 

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