Befuddled Boston Boss - The Business of Furniture 5/18/16 - Stephen Says




Dear Stephen:

I'm a hiring manager, and I've had an opening for more than six months now. I have made several offers, but for some reason, I cannot get anyone to "yes." I'm sure I've been making competitive offers. I've taken your advice that I have read here in BOF. I asked each candidate for their previous year's W-2, so I know their total income from last year, and I'm also asking for a pay stub, so I know what they make to the penny. I'm taking all these steps to be sure I am offering more money than they're making at their current job. Since we're

looking for employed candidates, I'm pretty much poaching people on my own. I'm giving them a minimum 20 percent increase on their current base salary. Competitive, right? I'm also willing to guarantee them an overall 20 percent increase on their total income from last year. To sweeten the pot, we pay 100 percent medical, and I'm even willing to start their medical from Day 1, when they leave their job.

We have very little turnover, and these are growth openings, but I'm still having difficulty. What can I possibly be doing wrong? Twenty percent seems ​more than competitive to increase someone's compensation, I know my medical plan is better than most, we tend to retain employees for a long time, I'm told we have a great reputation, and people seem to like working here. What's your advice on helping me close the deal? How do I get them to say "yes" to the offer?

~ Befuddled Boston Boss
 

Dear Befuddled Boston Boss,

It sounds like you're doing most of the right things. It's true, getting a candidate to accept an offer is often the hardest part of hiring someone today. Besides dealing with a counteroffer, if the candidate is any good, there are the emotional ties that people have to their current bosses and companies, and sometimes a monkey wrench is thrown in, too, because there is something about your reputation that is giving the candidate pause.

I know you think you have a good reputation, but knowing for sure isn't always so easy. So the first thing I suggest — after reading the rest of BOF, of course — is to go online and take a look at your Glassdoor.com reputation. See if you have a profile, and/ or if a former employee wrote something negative about your company. Glassdoor, and other online services like it, are the Yelp of the workplace. Employees can write negative things about you or your company without having to post their names, so be sure you've seen what people are writing. You never know if that is influencing someone, and, I can tell you it usually is. It sucks, but welcome to the Internet.

With that said, based on everything else you describe you're doing right, I can't imagine your reputation is what's making it tough for you to get someone to accept an offer. I don't necessarily recommend going above 20 percent because once you give someone a base salary that high, you're stuck with it forever. What I'm recommending for my clients today is to take a page from the sports hiring handbook and offer a signing bonus. Not such a common term in our industry, you may think, but it's far more common than you might realize. Consider it no different than making your base offer, but on steroids. Every single group within our industry is doing it to get a fast yes. A&D Firms do it, dealers do it, major manufacturers and small manufacturers alike do it.

The deal is that you offer them a bonus upfront, which they get as soon as they sign the contract. Now, I know that none of you reading this own football teams where signing bonuses can be up to $40 million. Obviously, no one is suggesting that sort of payout. In the furniture industry, depending on the position, the bonuses range from a low of $10,000 all the way up to $50,000, sometimes more. First of all, if you've made the hire directly, that is, without a third party or recruiter involved, don't be a cheapskate. You just saved a huge headhunter fee. So sweeten the offer by giving a signing bonus. It would cost you at least $50,000 to hire a headhunter to do the search, so put that toward the candidate to make the sale (yes, hiring someone is like closing a sale). Even if there is a recruiter involved, your recruiter will surely tell you there is some intangible incentive to candidates being made to feel they are important to the business early on in the hiring process, and that is exactly what a signing bonus can do. Like Sally Field's acceptance speech, the candidate suddenly feels that "you like them, you really like them."

I daresay, in my own experience facilitating hires for my clients, the signing bonus is no longer a luxury for employers, but a necessity today if you want to get the candidate to yes. Try it, it works almost every time. It has a different significance than an extra high base salary alone. For you, it's only a one-time payment, which is even better for when the economy chills again, and that is coming my friend.

~ Stephen

BoF