Who should negotiate the offer– The employer or the recruiting firm?

  • Who should negotiate the offer– The employer or the recruiting firm?
  • You have worked hard to find the perfect candidate and now it is time to make the offer.   The offer stage is sensitive since the candidate ties their self-esteem to the offer. On the other hand, the hiring manager is concerned with internal equity and operating costs.
  • The most proven process is to allow the recruiting firm to verbally present the offer, then, once the candidate agrees to the terms the company sends the written offer (with a 48-hour expiration). This makes for a smooth process and is much less work for the client, since they are preparing the offer once, and not multiple times.
  • Advantages of letting the recruiting firm verbally present your offer.
  • Increases the chances of securing the candidate!
  • If you are working with a well-trained, professional recruiter, then your chances of securing the candidate are drastically improved.  An exceptional recruiter will make sure both the candidate and the employer receive what they need, resulting in a win-win outcome. If you do not trust your recruiter to assist you with the negotiations, then you should find another recruiter.
  • Prevents candidates from having hard feelings toward future employer
  • When the recruiting firm serves as the mediator, there is less chance that the candidate feels like their future employer was unfair during the negotiations.  We all know that negotiations have the potential for one of the parties to feel like they lost.
  • Keeps the candidate’s compensation requirements realistic
  • The recruiter has spoken to the candidate more than anyone else involved in the process at this point. This allows them to better understand what is motivating the candidate to change companies.  Most of the time, money is not the reason a candidate is seeking to make a change. If the recruiter is diligent, then they will know the candidate’s reason for making a job change and can keep the candidate realistic with their compensation requirements by reminding them of their real reasons for making a change.   
  • Prevent salary creep
  • Once a candidate realizes that they are your number one choice, they tend to  become overconfident. This usually causes them to start asking for a higher base than originally requested. Since the recruiter has gathered compensation information during their first call and gained agreement on their walkaway numbers, they can remind the candidate of those commitments.  Most employers are not trained on how to obtain this information, putting them at a drastic disadvantage during negotiations.
  • The Offer Process
    1. The recruiter and employer should establish compensation ranges prior to starting the search. (In some cases, the employer will not know what the salary should be and will rely on the recruiter to help determine appropriate compensation.) Candidates should NEVER be told what the range is since all they hear is the highest number. If you tell a candidate the base is between $120,000 and $140,000, be prepared to offer $140,000!
    1. The recruiter is responsible for obtaining the candidate’s compensation early in the process (first conversation) and the amount they are seeking to make a change should also be determined. Candidates are more reasonable and forthright early in the recruiting process. Ask the candidate what their W2 was last year.  Make sure you obtain detailed information such as base, bonus and commission.  If you wait to the end of the process to start asking compensation questions, the candidate may be harder to pin down. 
    1. Once a candidate becomes viable, the recruiter should reveal to the employer the compensation numbers obtained from the candidate.   The employer should rely on the recruiters input to determine an acceptable offer.  The recruiter will know what the candidate will accept or reject.  
I realize that some recruiters are unethical and will try to increase their fee by trying to negotiate a higher base salary for their candidate.  There are two ways to avoid this.  One is to have a flat fee. The other is to only work with reputable recruiters.
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