Moneyball: What's the Right $$$ to Offer to the Perfect Candidate?
August 26, 2010
Jessica Lee is talking about candidates turning down job offers today over at Fistful of Talent, mixing theory on unemployment benefits in with the fact that some candidates out of work are reported to be turning down decent offers.
Which begs a reasonable question. What's a good offer?
Pet Peeve time today at the Capitalist - the topic? Pay and the free agent market....
Here are the scenarios that slay me...
Scenario A - Hiring Manager is contemplating making an offer and wants to know what the range is. Two things generally occur for the hiring manager who asks this question. They either 1) want to pay the minimum, or 2) want to proceed directly to the midpoint.
Scenario B - Candidate wants to know the range for the position in question. If you give that information up, generally by providing a minimum to midpoint range, guess what the candidate does? Sets his entry level expectation directly to the midpoint.
Here's what both parties don't understand. The market level for an offer to a candidate is based on just that - THE MARKET... What's the right comp level for an offer? One that's consistent with your current comp strategy, fair to both parties, but above and beyond all else - ONE THAT THE CANDIDATE WILL ACCEPT WITH MINIMAL COUNTERS.
Say it with me - the market rate for any candidate is the $$ 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.
Of course, Adam Smith didn't factor 96 months of unemployment benefits into his work. Hmm....
A tool I am finding helpful in understanding what pay bands might be available for the specific market in question is glassdoor.com.
Posted by: Ed Han | August 26, 2010 at 10:23 AM