What’s wrong with most job offer development processes? Almost everything!
In fact, the job offer development process at most corporations is a 20th-century design that simply doesn’t meet today’s 21st century needs. Yes, during an economy when the need for fresh talent is at its highest. And because CEO’s now cite recruiting as their number one internal challenge. The corporate process that generates our critical job offers remains poorly designed, with little accountability, and barely managed.
I find that the single most damaging flaw in this antiquated process is that most corporate offer development processes create job offers that have no sales component. And as a result, on average, a painful 17% of US job offers are rejected (almost 1 in 6). Unfortunately, Glassdoor data reveals that those rejection rates have been rising since 2015. I find that this process is often so mismanaged that today it needs a complete top to bottom modernization overhaul.
The Six Major Flaws In Most Job Offer Development Processes?
In my experience, most offer processes need a great deal more than a few tweaks. They in fact need to be completely repurposed, modernized, and upgraded in six major areas. The major flaws include:
- The process is run by compensation – when the process is managed by anyone, it’s likely to be compensation. Professionals that frequently know little about selling and unfortunately, the goal of compensation professionals is often a misguided one, which is to “save salary dollars”. Some compensation analysts have even been known to purposely provide lowball salaries in the misguided hope that they may save the organization a few salary dollars. This penny-pinching focus may end up driving away many top finalists. Instead, recruiters who fully understand the importance of continuous selling in the offer and the information provided alongside the offer, the offer needs to be managed.
- The lawyers have had too much influence – due to a few isolated lawsuits in the 1980’s. The primary goal of most offer development processes still appears to be to avoid mistakenly making promises of long-term employment or guaranteed pay. This is in direct contrast to the fact that one of the best ways to improve your offer acceptance rate is to make more believable promises that are specifically designed to excite the finalist.
- The offer process doesn’t focus on selling – the entire recruiting process is a waste of time if you don’t get a “yes answer” to your offer. Most involved in the hiring process make a major mistake when they end their selling after the last interview. The candidate selling should continue both within the offer itself and the supplemental information provided when the finalist is given an offer. In today’s talent market, where new-hire ghosting can reach 10%, you may need to continue your selling effort through their first week on the job.
- The offer process is not scientific and based on data – unfortunately, those involved in developing offers have no data about this finalist and what they need “to say yes.” Instead, the offer development process needs to be more “candidate-centric.” This requires that you conduct candidate research that reveals the “job acceptance criteria” that the individual finalists will use to make their yes or no acceptance decision. Typical job acceptance criteria include their salary, manager, commute, and the prestige of the organization. To learn these critical criteria, simply tell the finalist that “we don’t want to embarrass ourselves with an inappropriate offer if you are the finalist. So, can you please take a few minutes and list in priority order your ‘job acceptance criteria.’” Obviously, for a top candidate, any effective offer will have to meet most of their listed criteria. So when you present the offer, it’s wise to show them how your offer meets their acceptance criteria line by line. In addition, you must avoid making the candidate believe that this job contains any of their turnoff or “knockout factors” because a single one might cause them to hesitate or even to say no.
- Generating salary offers takes too long – everyone must realize that speed is everything in offer acceptance. And let’s face it, the people in compensation all too often lack a sense of urgency. As a result, they can be painfully slow in providing salary numbers, which results in a long time to hire. Any delay will mean that some top candidates will have already accepted another offer by the time yours is even issued. Ideally, you want your offer to be the first one received by your top candidate. And that means that you must track your talent competitors to see how many days their offers take. Once you know the number, when possible, make your “bird in the hand offer” no later than the day after the candidate’s final interview with you. Making an offer quickly and first also shows the finalist that your manager is decisive and that the candidate is wanted.
- There are no periodic postmortems for continuous improvement – in almost all cases, no one takes time to measure your overall offer acceptance rate. If you want to improve it continually, you must continually learn from your successes and failures. Start that learning by contacting candidates that reject your offers after a three-month delay to find out what elements in the offer they like and what factors contributed to them saying “no.” This feedback must, of course, be immediately used to improve the process that creates future offers.
After decades of studying why offers fail, I attribute our rising rejection rate mostly to the fact that the offer creation process used at most companies is designed solely to meet the administrative, HR, and legal aspects of a job offer. As a result, in today’s much tighter job market. Your candidate offer rejection rate may be as much as 50% higher than it should be. Instead, if you used a data-driven process that was scientifically designed to meet the specific factors that excite this candidate.
The upgraded version of this process is more scientific because it covers each of the many positive factors that have been revealed in the many surveys of finalists that ended up rejecting an offer. In particular, it identifies the most important positive factors that will lead to them giving “a yes answer” for each finalist.
|If you can only do one thing© – ask the finalist to provide you with a written prioritized list of the job-related factors that they “must-have” in order to say yes to an offer.
A Long List Of Recommended Actions For Improving Your Offer Acceptance Rate
The remainder of this article focuses on providing the reader with a handful of action steps that will directly improve your offer development process. These “deal closers” tools and tricks aren’t always cheap or easy. However, I have seen each of the ones listed here work extremely well in the corporate world. This long list of recommended action steps are separated into seven action categories
Action Category I – Tweak Your Hiring And Offer Processes So That They Drive-Up Offer Acceptance
If you expect to improve your offer acceptance rate dramatically. You will need to make several changes to both your hiring and your offer development process. Those process changes can include:
- Start with their job acceptance criteria as the outline of your offer – rather than starting with a standard offer template. Instead, for top candidates, assume that you must meet most of their job acceptance criteria. So literally create your offer and the supporting information using their list of priority acceptance factors as a foundation.
- Make the offer letter format more exciting – one reason why offers are rejected is the form and format of the offer letter itself is long and confusing. Letters that are overly legalistic (with a lot of fine print) are major turn-offs. Also, letters that leave out any mention of key “promises” discussed verbally during interviews will invariably frustrate the candidate. So make the letter and the process candidate-centric. And when you can’t include something formally in an offer letter, still highlight what you will try to do in separate supplemental information provided verbally or in separate informal correspondence.
- Make sure they see diversity during the hiring process – most candidates, but especially diverse ones, expect to work in a diverse environment. So make sure that diverse employees are fully visible during their on-site visits, during interviews, and when one-on-one meetings are offered with teammates.
- Make sure that the finalist has no remaining questions – especially when you’re dealing with a candidate that already has a good job. It’s important to realize that any unnecessary amount of uncertainty will likely cause them to remain with their current employer. So it makes sense to provide the candidate every opportunity, both before and after the offer, to have their questions fully answered (for example, my manager?). If you find that they are reluctant to ask questions. An alternative is to post the frequently asked questions (with answers) from all previous candidates in this job family on one of your websites.
- Get a tentative yes before they leave – it’s not uncommon for candidates to “change their mind” after they leave their final interview. So for in-demand finalists, consider making an offer “on the spot” before they leave. And then encourage them to accept while they are still with you. At the very least, try to get a tentative verbal okay. This is important because they have more chances to hear negative feedback from colleagues, friends, and family after they go home and receive other job offers or counteroffers from their current boss.
- Assume that they will get other offers – top candidates will get multiple offers. So, it’s important to have a plan for countering them. Start by realizing that having a fixed policy not to make counteroffers will cause you to lose many top candidates. So begin your counteroffer process by determining how high you are willing to go to “match” others salary offers. Then determine if there are any other areas that you are willing to match.
- Realize that the difficulty of the interview may impact offer acceptance rates – most hiring managers assume that offering difficult interviews might scare away candidates. That assumption can be a mistake because many candidates use interviews to gauge the quality of a potential employer. They should also know that this glassdoor.com research revealed that candidates in professional and technical industries are significantly more likely to accept an offer after facing a difficult job interview.
- Make the offer face-to-face – anyone who understands psychology knows that it’s harder to turn a request down in person than on the phone or a Zoom call. So within Covid guidelines, try to select a time and place where they feel comfortable meeting and presenting your offer.
- Build up the required trust using a talent community – without a strong trust relationship and a feeling that the company cares about them as a person. Most offered finalists will be reluctant to believe all of the promises that may have been made during the hiring process. So give yourself more time by convincing your top potential prospects and applicants to join and engage in your online talent community because those online learning interactions will give you time to build up the needed trust.
Action Category II – Engage Others In Influencing And Selling The Candidate
Even top candidates don’t make their decision to accept a new job alone. So it makes sense to identify and then attempt to gain the support and encouragement of those that will likely influence a finalist’s decision.
- Influence the influencers – remember that decisions to accept the new job are major life-changing decisions, so they are almost never made alone. So it’s important, wherever possible, to first identify and then influence those who will influence the candidate’s final acceptance decision. Proactively reach out to pre-identified job references, colleagues, mentors, professors, and family members. Provide them with information about this job and your company to actively go out of their way to encourage the finalist to say yes.
- CEO calls have a significant impact – having a passionate and personalized call from your CEO that asks them to say yes. “Together, we can build this company to the next level” – is extremely powerful. A handwritten note from the CEO attached to the offer letter is also a nice added touch. Calls from board members, founders, and owners may also have a high impact.
- Peer calls can close the deal – if you follow professional sports, you know that the primary reason many superstars join a team is that another superstar player encouraged them. So encourage each of your key team members to informally let the finalist know how much they are needed and that they will be welcomed with open arms. Make sure that you educate each teammate first, so they know what the candidate cares about. And if the finalist is a referral, also have the referring employee call them and try to close the sale. Providing the finalist with brief LinkedIn profiles of each team member may also encourage more communication with future teammates.
- Utilize “peer” interviews as a selling tool – because coworkers “live the job,” they are often the most effective at alleviating any fears and convincing prospects that they would like to join the team. So, where possible, offer a top candidate at least one “peer interview” with the team.
Action Category III – Action Steps That May Make Them Say Yes Faster
Fortunately, there are several proactive things that you can do to “encourage” a finalist to make their decision much faster. These tools include:
- Provide an expiring offer – give them an offer that is only good for a number of days, and then it is automatically withdrawn. This created deadline puts pressure on the finalist to decide and not to wait for additional offers that may or may not come through. Of course, rushing them could also force them to say no. But because most candidates want to say yes, they are more likely to go with an offer in hand.
- Offer them a sign-on bonus – learn lessons from sports on how to close reluctant candidates by offering a sign-on bonus as an added incentive to say yes, despite any existing doubts. A few have made the sign-on bonus in the form of a loan automatically canceled if they stay through six months.
- Convert their sign-on money to an “exploding bonus” – you can put even more pressure on a finalist to say “yes” more quickly by offering them what is known as “an exploding bonus,” which is where a significant sign-on bonus is offered. But this bonus is contingent on your offer being accepted within a few days. And after that initial period, the bonus dramatically decreases until it eventually reaches zero within a week.
- Include an “unexpected” surprise in the offer – after several interviews, most finalists know what will likely be included in their offer. So you can provide a pleasant surprise to a finalist by adding a significant and unexpected “WOW” that hadn’t even been discussed in your offer. These unexpected but pleasant surprises might include, you can work at home on Friday, we will supply you with your dream hardware/software, or you can pick your own job title. This works because adding something extra (when you don’t need to) reveals that you’re willing to go “above and beyond.” Adding this surprise will also provide the finalist with a “WOW story” that they will likely pass along to their family and colleagues.
- Offer a delayed start – occasionally, a candidate is reluctant to accept an offer because they don’t feel they will have sufficient time to settle their affairs before making a job move. So in those cases, it may be beneficial to offer to delay their start date to give them more time. This also increases the risk that they may eventually ghost you.
Part 2 of this article will be published on 10/4/21 on www.drjohnsullivan.com. It covers numerous additional offer improvement actions, including adding support for your salary offer and making dream job offers.
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