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.
Automation will soon take over sourcing & assessment so that selling will dominate. Yes, selling will become the sole remaining competitive advantage element in the recruiting function in the future. Mostly because it’s the only element of recruiting that can’t be effectively automated. This “excellent in selling capability” must include convincing reluctant recruiting prospects to physically apply, convincing top candidates to remain in the hiring process, and convincing every chosen finalist to accept your job offer. Unfortunately, this new focus will be problematic for most companies. Because in most of today’s recruiting functions, “their job offer development process” ranges from poorly managed to be in complete disarray.
The reader should note that Part 1 of this article covered the six major flaws found in most corporate offer development processes. Those flaws included having little data on the finalist, a process that is not data-driven, and not placing enough emphasis on selling. Part 1 also detailed 18 “offer improvement tools and tricks” under three categories of offer actions. This Part 2 covers the final 20+ additional “getting to yes tools and tricks” within the four remaining categories of offer actions. It’s worth noting that the easiest to implement actions that have the highest impact are listed first under each offer action category.
Note: The First 18 Offer Actions Under Categories I – III Were Covered In Part 1
Offer Action Category IV – Building On The Monetary Aspects Of Your Offer
Even when your organization is lucky enough to be able to make offers that include high salaries, in all cases, it still makes sense to further support and build on the monetary components in each offer. The best way to do that is by highlighting key elements of the offered job, that can in some cases, match the importance of money to a finalist (i.e., making a difference). It’s also important for recruiting leaders to remember that the highest impact hires (i.e., top performers, techies, and innovators) frequently place “the excitement of the work” and “making a difference” ahead of even their money expectations.
- Highlight the most competitive elements of your offer – not all finalists stay in tune with current market-level salaries. Try to prevent them from assuming that your salary offer may be low. Verbally highlight each of the areas in your offer that are the most competitive. Show where each element is superior when compared to the industry norm.
- In a few cases, consider guaranteeing a total salary amount – where an exceptional finalist is especially concerned about actually receiving a total salary amount. Consider guaranteeing that they will make their projected minimum total income if they work through the first year.
- Offer a delayed salary review to minimize their initial salary concerns – quite often, the largest hurdle that keeps a finalist from accepting an offer is their concern that they will be locked into this lower salary for a long period of time. So when you can’t give them more money, consider offering them “an automatic reopener clause.” This is where you agree to reopen their salary discussion on a set date 3 to 6 months down the road (when both sides will now know how well they performed). Many companies have used this extremely powerful reopener tool.
- Beyond salary, realize that having a job that has meaning and purpose is the #1 motivator – many hiring managers and recruiters over-focus on “the money.” Without realizing that “knowing that their job makes a difference” is literally the #1 motivator (Source: the Harvard Business School). And especially for Millennials, Gallup’s research has revealed that they are “motivated more by mission and purpose than a paycheck.” So it makes sense to also include as a supplement to their job offer a “job impact statement.” That outlines the new-hire’s likely impacts on teammates, customers, the environment, the community, and things they value.
|If you can only do one thing© – provide the finalist with an “impact statement.” Highlight the importance of their new job and the many impacts their work will have on customers, teammates, the environment, and the community.|
- Beyond salary, highlight how they will be doing “the best work of their life” – it’s true that most top performers and all innovators put “doing groundbreaking can’t put it down exciting work” ahead of pay. So be sure and highlight how this job will be an opportunity for them to literally “do the best work of their life.” Common “best work factors” often include highlighting the leading-edge, innovative work they will be doing, the advanced tools they will be using, and the advanced skills they will be developing. You might also include supportive comments from their future teammates covering how they have realized that they are now doing their best work.
- Beyond salary, sell them on the quality of their team – the best new hires are always interested in learning from excellent colleagues. Reinforce their interest in learning from this team by making them fully aware of the outstanding capabilities of their future teammates. Do that by compiling and giving them profiles of their team members (or use LinkedIn profiles). So that the finalist can see that they are joining a winning team that they can learn a lot from. Just like in sports, having one or two of the most compelling teammates contact the offered finalist directly with encouragement can also be powerful.
- Supplement their salary with a tremendous amount of freedom and choice – to most innovators and top performers, the amount of freedom they have on the job is a primary job acceptance factor. So after working with the hiring manager to ensure that they will have multiple choices. Make sure that part of the verbal offer discussion clarifies which specific areas they will have exceptional freedom and choices. Those freedom areas might include choices on aspects of the work, including projects, teammates, methods, or hardware and software. When it comes to working time and location, consider offering them choices in work hours, 4-day workweeks, unlimited vacation/personal time, and their physical work location.
- Supplement their salary by educating them on where they are likely to be in two years – almost everyone seeking a new position would like to know “where they will likely be in a few years.” So whenever possible, it’s wise to “show them what can happen. By giving them concrete examples of how previous hires in this job family have actually developed. The discussion might cover development aspects that occurred to the best in the past. Including salary increases, previous lateral moves, leadership and training opportunities, and promotions). Don’t make any formal promises that can’t be kept but do let them know what has been possible in the past.
- Supplement their salary with a personal development budget – almost all top candidates are interested in supporting their development and learning. But unfortunately, the development opportunities offered don’t always match what the employee really wants. So consider offering them their own yearly personal development budget that they 100% control.
- Supplementing their salary by offering remote work options – to some, the opportunity to work at home either permanently or occasionally on one or more days a week can seal the deal. Your ability to work at home may be especially impactful when your company’s in-person facility is located in a high cost of living area and when it often involves a stressful commute. Whenever they choose to work 100% at home in any state, remind them that they can choose to work in an area where their salary would go further because it has a lower cost of living.
- Supplement their salary by highlighting Covid safety – today, it’s a good idea to assume that no matter how powerful your offer is, most candidates will still be extremely worried about having a safe in-person work environment. So try to make each finalist feel 100% safe by providing them with a list of your organization’s proactive Covid safety actions. If you’re going to require all employees to be vaccinated, you need to let them know that also.
- Supplement their salary with a title that’s desirable to them – too many individuals, it’s a mistake to underestimate the value of a title. So if your organization allows it, give them a range of possible titles to choose from, or even let them create their own with your approval.
- Supplement their salary with a status symbol that’s important to them – top candidates often have egos. So consider providing them with one or more status symbols beyond the title that might seal the deal. These symbols might include important things, including a desirable office, an assistant, an intern, first-class travel, or a company car.
- Show that their salary will go further by highlighting community affordability in cases where a new hire will be relocating. Make it clear to them whenever they work at a location with a significantly lower cost of living or no income taxes. These factors will literally make their offered salary go further. Also, verbally highlight other factors (like good schools and low crime) that make their new work location highly desirable.
Offer Action Category V – Provide Them With A Dream Job Offer
We discovered at Agilent Technologies over two decades ago. One of the best ways to instantly get a top candidate’s attention was to tell them that we were striving to provide them with “their dream job.” We found that just the thought that we were trying to provide this once-in-a-lifetime opportunity was by itself a major attention-getter.
- Offer them their “dream job” – for truly exceptional candidates. Consider telling them that your goal is to offer them their dream job. Do that by providing them with a blank page, with “my dream job” as the title at the top of the page. Of course, give them some time to create their list of the elements that would make this next job “a dream job.” In some cases, you can speed up the list development process by providing them with some prompts. These are examples of the factors that others in their field have previously selected to be part of their dream job (i.e., choosing projects, using leading-edge technology, or working with an icon employee). And then obviously, it’s important to work with them to understand the dream job criteria that they select fully.
- Offer a chance to work on their dream project – in cases where you can’t offer them their dream job. Instead, for project-oriented top finalists, ask them if they have a dream project that they would love to work on. If you find this type of project within your organization. If they accept, they will be able to spend a dedicated amount of their time each week on that project. Another alternative is to follow the lead of Google and 3M and offer them a fixed amount of time each week to work on their pet project (a.k.a. 20% time at Google).
Offer Action Category VI – Offer Process Elements That Will Lead To More Successful Offers
This category contains some key offer development process elements that have proven to have a high impact on producing successful offers.
- Minimize the possibility of negative surprises by verbally going over your draft offer – avoid making the all-too-common catastrophic mistake of providing a final salary offer that the finalist finds to be embarrassingly low or even insulting (i.e., one well beneath their current salary). Do this before the final offer is completed by verbally revealing the key salary elements that you expect will be in their final offer. If you decide that your offer is way off after getting their reaction, this may give you a chance to save face and make changes before the final offer is tendered.
- You must personalize each job offer – all finalists want to think that you consider them special. Reinforce that belief when you put together their final offer by ensuring the offer itself and the supporting materials appear to be 100% personalized. This, at the very least, means that the offer doesn’t look like a boilerplate because it includes a few offer elements that would only be relevant to this particular finalist.
- Assign an offer coordinator to monitor the time of each offer – offers that are not closely monitored are likely to develop more slowly, and they may not be ready before the finalist has already accepted another offer. So utilize candidate research to determine the ideal and the maximum number of days before an offer should be tendered in each job family. Assign a recruiter to continuously monitor the progress of this offer to ensure all roadblocks are eliminated and that the offer is ready within the targeted number of days and it comes close to meeting this finalist’s job acceptance criteria. The offer process coordinator should also periodically report to senior managers how often the target number of days is met and the percentage of our accepted offers.
- Be continuously excited about the candidate – initially, it might seem like a minor thing, but most people want the organization to be excited about the prospect of them joining. You can help continuously reveal that excitement by having everyone involved constantly display their enthusiasm about them, their capabilities, and what they will add to the team.
- Minimize any fear of failure by offering a no-fault divorce option – many finalists are nervous about their capabilities and the probability of succeeding. So for exceptional finalists, consider offering them a “no-fault divorce process, which is a non-confrontational way to end a new-hire’s employment after six months. In the rare cases when either side feels that, for any reason, the employment relationship isn’t working out and an internal transfer isn’t a viable solution. This no-fault separation starts by assigning no blame. Next, the employee is guaranteed a positive reference and a predetermined lump sum severance payoff. So that they always know that if needed, they can walk away relatively unharmed.
Offer Action Category VII – Difficult To Implement But Extremely Powerful Approaches
All offer enhancement approaches provided so far have required little budget and few organizational approvals. However, these three remaining offer enhancements usually require either some extra budget or external approvals.
- Hire them both – this is a hiring approach that has been successfully used by both McDonald’s and the U.S. Army. The hiring tool encourages a desirable finalist to say yes by offering them a once-in-a-lifetime opportunity to work alongside someone they always wanted to work with. So you let exceptional candidates know upfront that you’re willing to hire another qualified colleague as a package deal. This “buddy hire” could be a mentor, a colleague, best friend, or even a qualified family member. Of course, you can limit the time when you promise to allow them to work together on the same project/team.
- Develop a dedicated “hiring” team – this approach is used everywhere at Google and several other firms. It adds value because individual hiring managers that fill vacancies infrequently often have assessment and selling/closing skills that are rusty. So instead, for key positions, you put together a dedicated “hiring team” made up of individuals who have proven to be particularly adept at assessing and selling candidates. And because they hire so often, they better understand the talent marketplace and what candidates need. They are much more likely to be able to persuade a hard-to-land finalist to say yes.
- Create side-by-side offer comparison “sell” charts – often, hiring managers are not completely familiar with what your competitors offer to their new hires. And because it’s essential that you successfully convince each top finalist that “what your firm has offered” is superior to any offer from a competitor. I recommend that you provide managers with a “side-by-side” offer comparison sheet. These single-page “sell sheets” make it extremely easy for extremely busy hiring managers to see exactly how the job offer elements from your firm stack up against the typical offerings from each of your major competitors. In addition, this sheet makes it easy for your managers to easily and quickly identify and then sell the finalist in each of the areas where your organization’s offer is clearly superior.
In today’s highly competitive talent marketplace, it’s extremely hard to get even an average candidate to accept an offer. So if you, like everyone, need to improve your offer acceptance rate among the even more difficult top finalists. It’s time to convert your current integrated offer process to a more scientific selling strategy and approach, which relies on finalist research and data. To first identify and then to provide in your offer the specific content that this unique finalist needs before they will “say yes.”
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