Making An Offer That Sticks: 7 Strategies for Closing the Deal with Top Talent by ON Search Partners

THE EXECUTIVE WHITE PAPER SERIES | 2012

MAKING AN OFFER THAT STICKS 7 Strategies for Closing the Deal with Top Talent

PRESENTED BY|

THE EXECUTIVE WHITE PAPER SERIES | 2012

ABOUT THE AUTHOR | TIM CONTI Tim Conti is a Partner and Co-founder of ON

Employing a communicative and collaborative

Search Partners. Concentrating his practice on CXO,

style, Tim has successfully maneuvered his clients

Vice President, and Board-level searches, Tim has built

through every step of the team-building process, from

management teams across a broad swath of industries,

candidate identification and assessment to hiring

focusing on the intersection of the energy, technology

decisions and offer negotiations. Intrigued by the

and industrial sectors.

evolution of leadership and its impact on business

In addition to leading senior level searches, Tim has partnered with his clients to conduct executive level assessments identifying areas of strength and weakness then crafting strategies to plug the most glaring gaps.

development, Tim leverages his background as an intellectual property litigator and a certified public acccountant. To reach Tim about crafting an offer that sticks

Having spent a career focused on executive level

in order to recruit the top talent in your industry, email

assessments, Tim and ON Search Partners have been

him at tim@onpartners.com.

able to craft a customized behavioral screen to identify true leadership.

THE EXECUTIVE WHITE PAPER SERIES | 2012 The Executive White Paper Series is a cooperative effort by leading experts to provide meaningful leadership insights to todayâ&#x20AC;&#x2122;s executives. To view more topics in the series, please visit www.onpartners.com.

MAKING AN OFFER THAT STICKS

As a leading retained executive search firm, ON Search Partners locates and lands the best CEO, Board and Vice President talent for both public and private companies. Known for a highly-personalized consultative approach, our partners are distinguished by their professionalism and a tenacious entrepreneurial spirit. Our goal is to provide clients the insight and context necessary to make smart leadership decisions. We are dedicated to your success. Explore our website for more information on our partners and services.

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THE EXECUTIVE WHITE PAPER SERIES | 2012

MAKING AN OFFER THAT STICKS . . .

Seven Strategies for Closing the Deal with Top Talent

Attracting talented leadership to the senior ranks is essential to any company’s ability to

No matter the effectiveness of a search process, it’s this final phase – closing the finalist

execute a long term strategy and outperform its competitors. The mechanisms available to

candidate – that ultimately defines the success or failure of a search.

companies needing to identify top tier talent have dramatically increased over the last decade as executives have willingly put their career histories on the web for the general public to view. As the founder of a retained executive search firm, I’ve seen firsthand my clients’ motivation for hiring my firm change over this same time period. Before the internet evolution, we were retained because clients desperately wanted to tap into our highly specialized

There are many reasons why offers breakdown at the eleventh hour, including insufficient compensation parameters and clumsy presentations to the candidate. To increase the probability of hiring the candidate that the search process has identified as critical to your growth plans, keep in mind the following seven important strategic considerations from start to finish.

network. Now, we’re more often retained for our ability to: · effectively position or elevate our clients’ profile with the best candidates in the market who are inundated with multiple opportunities; · create screening mechanisms that qualify and extract the best single candidate from a large pool; and, · most importantly, create and finalize an offer that gets the chosen candidate into the company.

MAKING AN OFFER THAT STICKS

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THE EXECUTIVE WHITE PAPER SERIES | 2012

#1:

Consider the Chicken or the Egg

Every successful search begins with the development of a comprehensive position profile accompanied by a strategy to successfully recruit just such an individual. That strategy is only effective, however, if it includes a compensation philosophy for the role at hand. For instance, a companyâ&#x20AC;&#x2122;s internal metrics may not be sufficient to attract the top tier talent desired. The hiring manager, on the other hand, may not be willing to settle for anything less. Compensation conservation and best in class talent are often competing principles. So, if the mandate to your search partner is to recruit the best available candidate, then you must commit to compensation flexibility regardless of your internal metrics. If internal ranges must be preserved, then you have to accept the market returns and focus on the candidate pool recruitable for that compensation range. Determining expectations and then driving consensus on these priorites will ultimately shape and define the success of your search strategy.

MAKING AN OFFER THAT STICKS

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THE EXECUTIVE WHITE PAPER SERIES | 2012

#2:

Build a Compelling Offer for the Marketplace

If you have committed to compensation flexibility in order to attract the best possible

Making the candidate an “owner” helps to alter the mindset of the individual ensuring focus

candidate, then you must remember that your internal comparisons to already existing

on decisions and actions that are good for the company. This is extremely important to

employees may ultimately be meaningless to the candidate. To work, the offer needs to be

investors when recruiting a C-suite to manage their investment, but should be considered by all

compelling versus the candidate’s current compensation package, not your company’s

levels of managers when developing a package to attract top talent.

internal metrics or peer group. Remember, in today’s highly competitive market, an executive needs a compelling reason to leave his or her current situation. Of course, compensation packages must make sense to both candidate and company, particularly in the current economy. Often the best packages for all concerned involve elements of pay for performance. In other words, consider compensation plans that include escalated bonus payouts for achievements that go above and beyond. The best candidates will seek out such a plan due to their confidence in their abilities to deliver. The best companies will be comfortable with such a plan because it prioritizes and rewards achievements above all else. Similarly, rewarding achievements with equity grants (i.e. options and RSUs) also helps to align candidate and company goals.

MAKING AN OFFER THAT STICKS

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THE EXECUTIVE WHITE PAPER SERIES | 2012

#3:

Recruiting Talented Leadership is a Sales Effort

Decades of search experience has taught us that “heads down” candidates tend to consider other opportunties for one of only four reasons: a) better company (by culture or market position); b) better industry sector (one that is growing); c) better compensation; or d) a better (i.e. expanded) scope of responsibilities. Consider that often the best talent is defined as someone “heads down” working with focus and drive at a competing firm. In fact, over 65% of our placed candidates were not originally looking for a change. This percentage goes up the higher the executive, the more competitive the industry.

So, when establishing a search process, you must demand that your search partner build a strong enough connection to the candidate to identify the source of the candidate’s interest. Then, the recruiter should work to “sell” that unique aspect of your position that will make the candidate take notice.

ver 65% of our placed candidates were not originally looking for a change.

As a result, companies do not have the luxury of simply assessing candidates in a onesided process. Instead, they must work to position their opportunity as being unique from others in the marketplace both professionally and financially – selling themselves along the way.

MAKING AN OFFER THAT STICKS

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THE EXECUTIVE WHITE PAPER SERIES | 2012

#4:

Don’t Blow the Goodwill You’ve Built Up at the Close Throughout the course of the search

you’ve spent considerable time assessing the candidate’s professional skill set and getting to know the candidate personally. Your efforts and time spent have created a personal relationship with the candidate — a bond of sorts. Yet more often than not, when the time comes to negotiate offer terms, the company representatives disappear and all communication with the candidate is cut off.

This is a tremendous mistake I’ve seen made over and over again. It essentially extinguishes the goodwill you’ve built up with the candidate. Remember, no matter how attractive the job may be, the candidate will only join if they’ve connected personally with the company. So stay connected to the candidate even as your search partner works to negotiate terms. This “open door” approach will cement the candidate’s belief that he/she is joining a company that values them as an individual and has a culture of communicating openly.

#5:

Let the Recruiter Be Your Buffer

While you should stay engaged with the candidate throughout the offer negotiation and be available to them at anytime, it’s best to allow your search partner to lead discussions with the candidate about the compensation details. Discussions on compensation terms, such as base

If a candidate’s demand is unreasonable, let the recruiter tell the candidate. If your offer is below market, let the recruiter provide you with feedback. The recruiter’s role is to be consultative to both ends, helping to ensure an agreement that both sides feel positive about.

salary parameters, bonus targets, and equity offerings, can often times be emotional. In those cases, it’s best to let your search partner be your buffer.

MAKING AN OFFER THAT STICKS

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THE EXECUTIVE WHITE PAPER SERIES | 2012

#6:

Consider Going the Extra Mile to Close the Deal

With the highly competitive nature of today’s talent market, it may be helpful to consider that adding on unplanned compensation can tip the “scale” in your favor. Keep in mind that the cost of going the extra mile is almost always less impactful on a company’s bottom line than the cost of an empty seat in a key role for an extended period of time. This is especially true when you consider the drastic impact a single top performer can have on the accomplishment of your organizational goals. Your search partner should be able to help you identify exactly what constitutes the extra mile. In certain circumstances, it can be elements completely unrelated to cash compensation that help you overcome a candidate’s objections or obstacles.

mile” is to simply sweeten the cash pot offered to the candidate. While internal metrics should not serve as handcuffs when trying to hire an important executive, there are mechanisms that provide the candidate with the necessary cash increase while at the same time preserving (or not dramatically destabilizing) internal metrics. For example, we have on multiple occasions utilized signing bonuses which pay out in equal installments over a 2 – 3 year period in order to increase the fixed cash portion of a candidate’s offer while keeping his salary in the ballpark of his peers. Choosing to pull one of these levers can often times be the difference between an accepted or a rejected offer.

Examples of noncash levers we’ve pulled in past situations include offering to pay for a candidate’s family to fly once a year back to their native state for special occasions; or allowing the candidate to work in a remote location for one month a year; or providing assistance with the costs of private school for the candidate’s children when the public option doesn’t meet expectations. On the other hand, cash as they say is king, so sometimes the best example of “going the extra

MAKING AN OFFER THAT STICKS

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THE EXECUTIVE WHITE PAPER SERIES | 2012

#7:

Know When to Move On Despite best efforts, there are situations in

which a workable offer becomes out of reach. A decision to end offer negotiations should be done in coordination with your search partner. It should also be communicated respectfully to the candidate so as to preserve that relationship should you ever wish to revisit it. Openly communicating your decision also helps to avoid ill feelings that could do harm to your companyâ&#x20AC;&#x2122;s reputation within the marketplace. If it is time to move on, review your backup candidates with the help of your search partner before starting your recruiting efforts from scratch. The disappointment of a failed offer negotiation with Candidate A often causes companies to ignore equally qualified and vetted Candidates B and C, only to restart recruiting

Remember if your search partner has executed a comprehensive recruiting effort, then your backup Candidates B and C should qualify as strong positional fits compared to the balance of the recruiting universe which should have already been screened and disqualified (or at least lowered in priority).

efforts and end up later with an average hire due to process fatigue.

CONCLUSION | Your search partner is your best resource for developing a reasonable compensation package designed to attract the top candidate in

associated with an empty seat in a key leadership position.

the field for your leadership position. Utilizing a recruiter from the beginning to develop a

By making an offer that works on multiple levels, you can propel your companyâ&#x20AC;&#x2122;s perform-

compensation strategy will lead more quickly to your desired candidate and reduce the expenses

ance significantly in a single act.

MAKING AN OFFER THAT STICKS

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