Part 1: Compensation
The process of finding the right candidate to fit an opening in your company is complex, arduous, and often stressful. However, after 18 years in the executive search business, I have identified five key components of the employer/employee relationship that, when given the proper consideration, can simplify the hiring process and increase your chances of securing a successful, long-term hire by up to 50%.
Using what I call “The Five C’s for a Successful Hire,” I coach both my clients and prospective candidates to focus on three base-level requirements (compensation, competency, and community), as well as two higher-level considerations (chemistry and curiosity).
In this installment, I’ll concentrate on the first C: compensation.
Go Beyond Base Salary
A candidate’s compensation includes significantly more than a simple base salary, and yet in my experience, both companies and candidates get bogged down by this first number. A base salary must be competitive within your market, of course, but it is only one piece of the compensation package. When presenting the compensation to a promising candidate, be sure to include ancillary income streams, including incentives, LTIPs, paid vacation and sick leave, insurance coverage, etc. Taken together, these pieces can form a much more attractive and lucrative compensation package than a base salary on its own might suggest.
Consider the Cost of Living
Another common misstep I have noticed during discussions about compensation is a tendency to ignore changes in the cost of living between two regions. If you are recruiting a candidate from outside your market, make sure to discuss with them any significant cost-of-living changes that will affect his or her compensation package. For instance, if a candidate is interested in relocating from New York City to your office in Iowa, make sure to prepare a comparison between those two markets to ensure that they understand why the numbers in your compensation package look the way they do. Keeping candidates rooted in the reality of how far each dollar will go in a specific market is critical to ensuring a smooth transition from one region to another.
Be Flexible, but Realistic
Make sure that you have established a salary range for the position that fits within your budget. If you want a top-tier candidate, be prepared to pay at the top of your range for his or her expertise. Start strong, and make your first offer your best offer. However, if a candidate is out of your price range and cannot or will not consider a compensation package you can realistically afford, do not try to force the fit. The right candidate will fit your needs without breaking the bank.
Getting your target candidate on board with your total compensation package is an important first step, but it’s far from the only consideration you must keep in mind during the hiring process.
Stay Tuned for Part 2: Competency