By Shaun Carpenter

What can I do to ensure I won’t lose an amazing candidate over compensation issues at the end of a search?

Has this ever happened to you: you’ve been through a long and exhaustive recruitment process and you excitedly present the preferred candidate with an offer, only to be turned down because it was less than what the individual was expecting?  Obviously this is a frustrating and costly situation, especially if you don’t have a strong runner-up. We’re all in the business of people so there’s no way of predicting every outcome but here are a few things to think about to positively impact the offer stage of your next recruitment:

Understand all the compensation parameters. 
Whether you’re conducting the search yourself or working with a search firm, create a Compensation Summary Sheet for the position so you can answer the candidates’ questions which are bound to come up and compare “apples to apples”.  Consider:

• Base salary (including the range, target hiring amount and the absolute highest figure that would be considered if the perfect candidate was presented). This “wiggle room” as I like to call it will vary tremendously from a public sector to private sector employer, and from a mid-level position to a rainmaker type role where company profitability and market expansion can impacted significantly.
• Short-term incentive (target percentage, formula for calculating it, and actual bonus paid out over the past 3 years). The last part will be a likely question from candidates, as they often want to get a historical perspective.
• Long-term incentive
• Stock options
• Vehicle allowance
• Memberships
• RRSP contribution matching or alternatively pension plan details
• Preferred borrowing rates (these can be significant in financial institutions)
• Education reimbursement
• Vacation entitlement

Get to know your candidates’ compensation packages from all angles. 
I think it’s human nature that people simply find it difficult to talk about money, especially their own.  Sometimes you just need to take a calm, confident, matter-of-fact approach to get someone to open up.  It may be helpful to remind the candidate that you’d prefer not to waste his/her time if the compensation is “out of the ball park”.  At the point where you’re qualifying an individual whose resume looks good (even before the face to face interview), ask very direct questions to understand the full picture and don’t make any assumptions. On one search I was conducting, a candidate looked absolutely ideal but I learned that he wouldn’t consider leaving his current role unless his pension plan was transferable. My client believed that they could sweeten the pot in a few other areas to make up for the fact it wasn’t, but the topic was absolutely non-negotiable. Better to know this before all parties have invested a great deal of time and resources.

Take out your Compensation Summary Sheet and ask for specific details on each item.  A great final question to ask is, “Are there any other perks or benefits you currently have that we’ve not covered off?”

Another angle to consider are the ways in which a relocation can impact overall compensation.  In this case you’ll also need to address tax rates, cost of living differentials (including the big one…real estate), and many other factors.  If you don’t have an expert internally to help with relocation aspects, my suggestion is to hire a consultant who specializes in this area.

Communicate the salary details to the candidate early and often.
After I’ve concluded talking to the candidate about his/her own earnings, I will usually make a judgment call about how much to disclose about the compensation target of the position that is available.  If the person is currently earning close to the overall target compensation or more, I’m very direct about what this position pays to ensure expectations are clear.  The worse thing that can happen is for the person to decide to move ahead expecting that he/she’ll be able to negotiate up at the end of the search.  I’ll even ask, “Based on this job paying no more than X, are you still interested in pursuing?”  If the person is willing to “trade money” for something else that is appealing about the role (location, company, project size, growth opportunities, shorter commute, etc), make sure you understand this fully.

At each stage in the process, remind the candidate of your earlier conversation about the compensation target and confirm that he/she is still okay with the figures discussed.  This way, when you get to the final strokes of the recruitment there won’t be any surprises about the offer.  You should be able to avoid any unnecessary embarrassment and you won’t ever offend your candidate because expectations are firmly in place.  The offer stage should be a smooth process because of your due diligence along the way.  Good luck.

Shaun Carpenter is Associate Partner with Pinton Forrest & Madden Executive Search. He has worked in the executive search business for 12 years and is well respected in the industry for his aptitude in candidate development and client relations. His thorough, insightful approach gives clients confidence that their needs are being met in a professional, timely manner. Shaun also has past experience as Manager, Human Resources with a leading Canadian health insurance provider where he was responsible for recruitment, retention, coaching, performance management, and employee/labour relations. He received a Bachelor of Commerce degree from the University of Calgary, which included studies abroad at the University of Strathclyde in Glasgow, Scotland. Shaun is also currently an active member of BC HRMA’s Coastal Vancouver Advisory Council.