Good candidates are hard to find, in times of low unemployment and high unemployment.
Often when recruiting, clients want to ‘squeeze the lemon’. This is an expression regularly used by one of my clients, meaning they want to get as much as they can out of their candidate while paying what they deem a reasonable price. As recruiters, part of the service we offer is providing the client with an overview of current market prevailing remuneration levels. Something interesting, but perhaps not surprising is often the client immediately wants to target the lower level, or certainly set a limit, which instantly starts to reduce the talent pool available to them.
Commercial pragmatism must rule, but sometimes to the detriment of the organisation. Recently while going through feedback on how two candidates were integrating into a business with a Manufacturing Manager, he indicated he would have liked more breadth of experience. The two appointed were achieving expectations but he still expressed some disappointment in not paying more. There had been two people put forward that had broader experience, and the business would have really benefitted from the additional experience they would have delivered. Unfortunately, they were seen to be too expensive. If my client had increased the remuneration by another 10 per cent, he would have been able to secure these more appealing candidates and the diverse skills they offered. These people were within the remuneration scoped as ‘market’, however my client decided to specifically target those closer to the bottom of the remuneration bracket.
Admirably, he is continuing to work with the two candidates hired and support their development, however in hindsight, he wishes he had paid the extra money for the candidates he had viewed as too expensive. He indicated the additional skills they brought to the organisation would have far outweighed the extra money. This was an interesting perspective from such a client. It also helps create a more rewarding recruitment experience for all concerned when the candidate delights all stakeholders with what they bring to the situation. The potential additional cost needs to be weighed against the outcome.
Now I know the recruitment industry is notorious for ‘pushing people’ onto clients above the anticipated remuneration and I’m not suggesting you let a recruiter talk you into an expensive hire you’re going to regret down the track. I’m simply recommending if you are looking at a range of candidates, with some on the higher end of the remuneration scale, before you dismiss them, you should have a good look at the additional experience they bring to the table and how this “additional value” could potentially boost your business. You also need to think about the costs associated with additional development for those on the lower end of the scale who you may need to upskill once you bring them on board. Perhaps the more experienced and therefore more expensive candidate might be the best value for money in the market.
One assignment I was involved in some months ago involved specifically targeting potential candidates we knew had the right experience. After some months the process whittled itself down to one candidate. We then held several more meetings to ensure the candidate was the right culture-fit and the client’s business was the right place for the candidate to achieve their aspirations over the next several years. We had been working through the remuneration question so knew where we needed to be. The client then asked to make an offer 20 per cent greater than we had discussed. When I queried this decision, he indicated the candidate would have responsibility for a business turning over $500m. The right person could make an enormous difference to that business, how it grew, the development of others and the amount that reached the bottom line. The extra remuneration to reward the right person was a small impact compared to the cost of bringing on the wrong person. This was a great way to think about it.
I am not saying you should make an offer to a candidate 20 per cent above the market every time, not at all. I just recommend you think very carefully about paying the recommended remuneration your recruitment professional has told you. Of course, make sure they are bringing what is required to the role, but don’t get too caught up on the remuneration compared to the impact the person will have long-term in the role. Otherwise, you may always regret that potential star employee you let get away.