Say It With Me: The Market Rate for any Candidate is the $$ Amount They Will Accept with Mimimal Counters...

I love talking about all things related to recruiting.  Been in the game long enough, and you'll learn one of the touchiest, funkiest items you'll deal with is the psychology of the offer process once you've found the candidate you want. 

I've always been lucky to work for companies that aren't constantly trying to nickel and dime candidates at the time of offer.  Most, if not all, of the people I've worked for in my career wanted to pay people fairly.  But let's get one thing straight - those same people don't just want to accept an aggressive candidate's stated need.  Instead, the smart company (or agent of the company) knows what the market is, and what the candidate's expectations are.

The time of the offer is the point at which the market, the culture of the company, and the psychology of the candidate intersect.  Sometimes it goes well, sometimes it's a car wreck. 

More on the psychology of the offer process from the Marketing Headhunter, Harry Joiner (one of my all-time favorites):

"I wont beat around the bush: Salary ranges are total bullshit. There. I said it.

I mean, what's the point?  When you bought your house, did the seller quote a range?  And if he did, which end of the range did you hear?  The low end or the high end?  The low end, of course, and that became your starting point in the final negotiations -- unless you're smart, in which case you started negotiating below the lowest end of the range, making the seller work you back up to his stated minimum.

ON THE CANDIDATE SIDE: The recruiter must brace his candidate for a low-ball offer and coach him not to take it personally.  Any recruiter worth his salt simply must tell his candidate to expect the client to bounce their first pitch in the dirt.  It's all part of the game, and deals fall apart when candidates take these things personally.  (And they do.)

Beyond that, all candidate's must not only understand what the "market" is for their skills, but also what the client can fairly afford without feeling burned by the process.  To quote any economist worth her salt, "You are looking for the optimal point on the efficiency curve."  After all, candidates, you'll need your honeymoon period in the new job -- and running roughshod over your new employer in a salary negotiation will only shorten it.  Leave a few bucks on the table, but not so many that you feel cheapened by the process."

Here's what all parties (hiring manager, company and company) don't generally understand.  The market level for an offer to a candidate is based on just that - THE MARKET... What's the right comp level for an offer?  One that's consistent with your current comp strategy, fair to both parties, but above and beyond all else - ONE THAT THE CANDIDATE WILL ACCEPT WITH MINIMAL COUNTERS.

Say it with me - the market rate for any candidate is the $$ amount they will accept.  They've got info about what they are worth, you've got info about what they are worth.  When it all comes down to it, ranges give guidance, but you can't rely on the extremes in the offer process.  You use the range to close business.

To be fair, all hiring managers and candidates don't have issues with this concept.  But those who do have a hard time understanding that ranges, and at times pre-dispositions, mean nothing when it comes to the market rate for talent.

The market rate for any candidate is the $$ amount they will accept.  Everything else is noise...

So, if you have a candidate who grudgingly accepts a fair offer, don't feel bad.  Adam Smith would say the acceptance, even with the static, is the free market at work.

Comments

[Anonymous]

FWIW, just because a candidate accepts an offer, it doesn't make it fair. In this market, all it may signal is that he is desperate.

[KD]

I hear you - it is the market, however. I didn't make any representation of fair. markets move based on the circumstance....

[Debbie Brown]

Kris having recently been through the experience, you have stated this very well- IF there is mutual respect and trust at the point of offer- this is the way it could and should work.

[survivor]

There are companies which try to low ball candidates or haven't kept up with the current salary range for a position. You can't expect a candidate to accept a 1995 salary range in 2009. Even if a candidate grudgingly accepts a low-ball offer, when the economy is on the upswing they will definitely be looking for greener pastures..can you say flight risk ?

[twitter.com/havrilla]

You hit the nail on the head -- The People and Leaders should be focusing our energy and resources into the 'Creed'! Frankly most recruiters - internal or external - learned long ago how to identify employees from target companies in LinkedIn without accessing "the weak member of the tribe's" network.