While our main focus is freelancers, we do often get asked and participate in the negotiation of full time roles and aqua-hires. Based on these transactions, we have really learned what moves the needle for candidates in regards to the job offer they accept and it is usually not for the reasons you would think.
One of the most important functions for senior executives and founders is the ability to build the right team. We are finding that a shortage of amazing talent continues to grow while the demand for this talent does as well. Given this extremely competitive landscape for your dream employee, it is crucial that you make a compelling case for why someone should join your team from the get-go.
One of the big misconceptions about this process is the belief that the bigger the payment or comp package the more likely you are to close the deal. It can help but it is also a problematic viewpoint for two reasons:
- If you’re not in a position to offer a big package, you may now believe you can’t hire the right people. This is not necessarily the case. While size matters for some things, it does not matter for all things :-).
- The right mix of options can overcome a huge range of objections.
The key to successful hiring is understanding your candidate. You may have three people you want to hire for identical roles and in all likelihood, you will need to make three completely different offers in order to succeed. Below I’ve listed all of the categories that you’ll need to feel out your candidate in order to find out what is most important to them. There is a lot of recent research that shows job satisfaction is as (if not more) important for millennials than cash compensation. The point is not to follow the research because it speaks in generalities but to find out what your dream employee cares about most so you can tailor your offer around that. The idea that the same things which matter to a recent college grad will be compelling to a woman with two kids is absurd and many companies still operate this way.
Here are the variables to consider with your candidate before you make an employment offer.
1. Base Salary
– This is a biggie for sure as it will often determine the lifestyle that someone can afford. However, it can also be offset by other variables below which really enhance daily living and happiness (for example: being able to work from home on Fridays).
Explaining clearly what you are offering with all the ups and the downs will be the first way to engender trust. Employees are getting a lot more savvy after years of being burned by worthless equity scenarios.
- Vesting schedule – Allowing someone to vest faster might mean the world to some candidates.
- Options vs stock – Having to buy the options may be daunting to someone who might not have the resources to do so, whereas being issued stock may be preferable if they can handle the tax consequences.
- Length of time to exercise options – We all know the horror stories of leaving a job having vested into a bunch of equity but not having the liquidity to buy it. The other issue here is if they feel they have to make a decision buying something before there is any kind of clear path to an exit for the company. Giving more time to someone who has been burned by this in the past may make a world of difference.
- Class of stock – Nothing is worse than getting some skin in the game, only to later learn that your skin is completely worthless because everyone gets their money before you and there may be nothing left for you.
- Mitigating tax consequences of purchase and sale – If you can’t afford to pay the taxes that come with your equity, they are useless to you. Some companies are getting wise and solving this problem for their dream employees. This might just be one of the things that pushes someone in your direction.
3. Cash or performance-based bonuses
– If you can’t offer a competitive base salary or equity that is commensurate with a potential dream employee’s desires, bonuses based on their success or the success of the company might just be the right carrot and align everyone’s incentives.
4. Expense Account
– For some roles, having an inadequate set of resources to gain career development, wine and dine, travel or go to conferences, can be a great reason for someone to go in another direction.
5. Budget for performance of duties
– If an employee is tasked with achieving certain goals and doesn’t have the resources needed to do that, it is a no win situation. For those with a keen understanding of this, they will steer clear of jobs where they can’t get what they need. Conversely, an employee who has never worked with a bigger budget might take a lower comp so they can finally get to spread their wings and experiment with things that have been dying to try.
6. Paid time off (PTO) / Vacation Policy
– This is a crucial item particularly since people from other countries have completely different standards. Offering someone from Europe a package that starts with two weeks of paid vacation is a non-starter. Remember to consider the individual candidate and if PTO is important to them, consider extending it.
7. Flex Time / Allowing remote work
– For some, this is everything and for certain roles (especially ones that require a high level of concentration (programming, composing, writing, etc) this is EVERYTHING. It gives employees the room to get into flow, work better and smarter and should lead to increased productivity.
8. Health/Fringe Benefits
– Make sure they understand what you offer. For people who have families, providing good coverage can be very attractive. This can be a biggie. Also maternity and paternity leave for people in that age range.
9. Company Culture
– For the candidate, they need to know that they are going to be somewhere awesome, with awesome people, where they are supported and valued. This can be the thing that pushes someone in but if it is a negative, it will surely push them out.
For those focused on career advancement, taking a role that might not be as good on other levels, might be unattractive.
12 Mission of Company/Job
– If all things are equal, given a choice between working for a company that provides no value to the world vs one that does, you know how people will choose. Make sure to highlight your best qualities as it relates to this.
13. Reporting Structure
– For some, reporting directly to the CEO or a C level person is a big deal and makes them feel closer to the top and big decision making. Another attribute to highlight if it works in your favor.
14. Path to Career Advancement
- Public Acknowledgement and Credit – In some instances, giving credit or even publicity to an employee are important. Letting them build their personal brand can offset an offer that might otherwise be deficient.
- Promotion Opportunities – The opportunity to move up the corporate ladder may trump all for some people. In these instances, implied, promised or scheduled promotion can offset other areas of compensation.
We live in an age with personalized medicine, personalized programming of content, personalized education (or at least it is coming). Thus, we need to move rapidly to bespoke, customized offers if we want to win the dream employee.