7 reasons to stop candidate bargain hunting

As the Euro teeters at the edge of a European toilet, businesses are observing nervously on the side-lines and moving into conservative mode. Hiring freezes and protracted recruitment processes seem to be the norm. Open positions are reportedly over subscribed and many employers have their choice of top talent. Reports of organisations trying to bring in excellent talent at budget, lower than market rate salaries seem to be on the increase. But how wise is this  decision to go candidate bargain hunting?

Doomed
The trend where HR Managers are issuing ” plenty more fish in the sea” type statements,  playing on candidates’ market insecurities without offering anything in return to buy in longer term commitment are on the rise.  Strategic  carrots which might be offered could  include:  a later salary review based on results or performance, training or development possibilities or longer term career benefits, a mentor, luncheon vouchers, an extra-days holiday, telecommuting, flexi-time.  Anything! Where is the imagination?

A recent MBA graduate , who has just invested €50K in his professional development told me that an HR Manager had given him a ” take it ir leave it” option over a €1000 per annum salary differential (€2.7 per day), after receiving a salary offer which was already 10% below the market rate,  as well as being 10% below his stated minimum requirement. The company wants to see how he might “settle in“.  Message: they’re not that bothered if he joins or not!

This development is a short-sighted, ill-advised HR practise. Win/lose negotiations damage relationships in any arena and will almost always be doomed from the outset. The hiring process is no exception to this general rule.

  • Suggestions that an organisation needs to see a candidate “settle in”  sends signals about the lack of trust in their own hiring process and lack of belief in the recruitment decision. Probationary periods are normal,  but  if the  recruitment procedure is top-notch,  they are generally a formality.   Organisations need to convey excitement about their prospective hires, not doubt. Doubt does not inspire or motivate!
  •  HR practitioners should  think long-term and with business vision leaving room for negotiation, despite seemingly pressing budget needs. With the value of onboarding estimated at around 3 times annual salary,  this attitude is short-sighted and ultimately expensive. Salary  benchmarking differentials can also be found in the public domain so an increasing number of candidates know  their market value  (especially MBA candidates)
  • Candidates may  indeed accept this discounted offer and then shop around for a better one, only to withdraw at the last moment. The company is then left high and dry. I have seen this happen far too often when organisations under-pitch their offers. The cost of an open position has to be factored in.
  • Word gets round and damages the company brand. Playing hard ball for €2.7 per day sends out a bad message about all involved in the process.
  • Companies which are cheap at the beginning with low-cost salary policies may not change.  Candidates understand that well.
  • The new cheap hire will leave as soon as the economy picks up.
  • The new cheap hire will not go the extra distance nor be totally committed unless there happens to be a visionary manager in the process or the HR Manager who took this obdurate position has moved on.  Either way, from a company perspective that leaves too much to chance.

Times are indeed hard, but companies have many options to foster a positive attitude with a creative and flexible talent management strategy. If €2.7 per day is a deal breaker then there is something wrong somewhere.

2 responses to “7 reasons to stop candidate bargain hunting

  1. Hi Dorothy – I found this article refreshing, as I’ve known several companies here in the States who take this exact approach to bargain shopping in the economy. The idea is “You are lucky to have this opportunity, so you better appreciate what we give you (which is little)” instead of “We are thrilled to have you on board and helping us get to the next level.” It is all backwards – the candidate comes in thinking they are a burden that is under suspicion…how can they do their best work in such environments?

    Glad you shared this – someone needs too! Bargain shopping is not a HR Best Practice…like most bargain buys, you typically regret not spending more where it counts. And people always count.

    • Thanks Nacie – although times are indeed tough being instransigent on salary negotiation is poor practise on both sides of the table. Finding the cheapest candidate or trying to get a more expensive candisate cheaply can back fire eventually.

      There ae many ways to engage and motivate candidates and make them feel excited to join a company. Many of these are low cost but require some imagination. Even a deferred review based on results is better than the ” take it or leave it” approach

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