Common denominator: the budget.
Common detractor: the budget.
People are one of the largest investments a company can make. The value of a role to an organization often comes down to the bottom line – what can the company afford to pay? Each role has been tasked with aligning with the company’s pay philosophy and acquiring top talent, but all try not to pay and arm and a leg for it.
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Does your hiring manager have champagne taste on a beer budget?
The job description has been submitted, the market report has been run, and now the hiring manager is saying the range is too low for the candidates the manager wants. Consider how the role is benchmarked versus the ideal candidate the hiring manager envisions. When managers define the job based on minimum requirements instead of full proficiency, it is no wonder that the data comes up too low for what they want. Candidates aren’t going to settle for the minimum salary.
The manager’s champagne taste needs to be incorporated into the benchmark to capture the purple squirrel your manager seeks. Ask the hiring manager about the desired skill level and to be realistic about how many years it takes someone to be fully proficient in the position. With certain qualifications, there will be a higher expectation for pay. Pricing a job at the point of proficiency will often give you the wiggle room your hiring managers seek when looking with their champagne taste.
On the other hand, if your organization has a beer budget, you’ll want to work with your managers to learn how to identify the best candidates for your budget. Either way, you’ll need to get clear about whether it’s a champagne or beer job.
Is your recruiter looking outside your labor market into a different labor pool?
The compensation strategy of an entire organization can sometimes fall into a set it and forget it situation. The labor market and ranges that were finalized months ago don’t take into consideration that the market outside of your strategy is fluid and constantly moving.
Are the candidates the recruiter is presenting seeing numbers from companies that are outside of your labor market? Consider the competitors in your area – are there some industry leaders that are influencing pay nearby? Your budgeted numbers might not reflect the in-demand talent pool in your area, especially for highly technical or specialized roles.
It might be relevant to ask that hiring manager which companies on the candidate’s resume made them so desirable – this might be an opportunity to take a new approach.
Can the company compromise?
Sometimes you just have to pay more. Recruiters are an asset to get top talent in the door, and HR’s goal is to keep talent in their seats once inside. Is it possible to find money in the budget? Bargaining with the hiring manager to move money from ad-hoc expenses or a technology budget is another common practice to consider.
Perhaps it’s possible to appease the purple squirrel with a base rate that falls in line with your strategy, but then is creative when it comes to incentives (total cash comp). Depending on the role, it is also helpful to consider the total comp package you’re offering. Perks are never a bad thing!
Communication is key. There is an opportunity to embrace transparency when it comes to a competitive wage negotiations. Don’t be afraid to have a conversation with the candidate to reevaluate pay in a quarter or six months, especially if there is room in the budget and a way to measure success. Be honest, make your best offer, and leave some wiggle room.
In the end, the goal is make sure that HR, Recruitment and Hiring managers all have something to savor at the compensation party, aligning around the candidates necessary to make the business succeed. What lessons or questions have been particularly helpful for you as you’ve worked across departments? Let us know in the comments section below.
Whether you’re having champagne, beer, or sparkling cider, have a safe and prosperous New Year!