A challenge our clients face in a candidate-driven market (fall of 2021) is spending copious time and energy with a promising candidate, only to have that candidate unexpectedly take an offer with another firm, or worse, explicitly leverage the offer to secure a better offer elsewhere.
If it was a modest interview let’s say you meet three times for an hour and a half. Several team members join through the process. Cumulatively the company has invested 12 hours. Let’s say company time bills out at $150/hr. The interview cost the company $1,800 and it has nothing to show for it. To add insult to injury, if the offer is blatantly leveraged, it violates the social contract of mutual goodwill that should be established through the interview. So it was expensive and insulting. The hiring team starts over, frustrated.
TWO WAYS WE SET OURSELVES UP FOR THIS PROBLEM
Talk about compensation expectations up-front without continuing to reference compensation expectations as the candidate’s objectives and job expectations are discussed. Certain expectations are set early and few measures are installed relationally to understand how those expectations may shift through the process as more information on both sides is uncovered.
Talk about compensation at the very end, often after the hire decision is made as an after-thought. Sometimes the expectations are out of alignment, sometimes rapport is unraveled because the interviewing parties move from a friendly rapport-building mindset to a shrewd self-interested negotiating mindset. We’ve literally seen companies roll out the red carpet for candidates, building a foundation for a strong relationship, only to talk about negging them in a counter-offer. This is emotionally manipulative and counter to quality leadership.
What’s wrong here? Compensation was discussed in both examples.
THE MISSING INGREDIENT: CONCEPTUAL AGREEMENT
Conceptual agreement refers to a shared pool of understanding between parties about what the commonly held goals and methods should be between them. Interviews that focus on compensation as a market transaction lack conceptual agreement on what everyone is trying to accomplish.
Succinctly, achieving conceptual agreement means both parties are aligned in terms, goals and methods.
Think about how varied interview objectives can be. Some companies interview without having a real hiring need, some candidates interview for practice, some interviews are bureaucratic formalities to satisfy a selection process protocol, more interviews were never truly employment options but entirely intended to generate offers to create negotiating leverage.
Point is, many people don’t mind wasting other people’s time if they gain some advantage. Many people do not know how to negotiate based on value justification and ONLY rely on creating adversarial leverage between offers.
"Few, if any, forces in human affairs are as powerful as shared vision."
- Fierce Conversations by Susan Scott
DON’T PLAY THE TRANSACTIONAL INTERVIEW GAME
Instead of trusting that each party is properly aligned with terms, methods and goals, these can be made explicit through questions and transparency to create a shared pool of meaning, which creates more trust. Sincere clarity is very important!
A FEW PRACTICAL EXAMPLES
Start the interview by framing it as a collaboration. After all, if it doesn’t work for one party, it won’t work for either.
Welcome any/all questions important to the other party. If they choose to ask obviously improper questions, disqualify them. If you cannot answer, provide a clear justification.
Propose a plan on how the interview should proceed and ask for their perspective and buy-in. Together, create a shared agenda of important topics to cover. A good interviewer recognizes the unique interview paths required for the inherently unique people they interview.
Define terms. Ask a lot of questions around how a counter-party defines industry terms, acceptable methods, problem solve, etc to find explicit examples showing congruence or incongruence.
Set expectations around how this offer process is collaborative and tailored to them. All the offers you make are good-faith offers and bad-faith leverage negotiation will prompt the offer to be retracted.
CONCEPTUAL AGREEMENT BUILDS ON SHARED UNDERSTANDING
Build conceptual agreement with questions and clarity - a key foundation for this is understanding why they do what they do.
Motivations come in layers. Often you can continue asking ‘why’, ‘how’, and ‘what’ questions to find a deeper layer to that motivation. As a hiring authority, your priority should be to hire the best-qualified candidate that you are prepared to invest heavily in. Hiring candidates you are not fully prepared to invest in is a failure on the horizon.
Asking persistent questions that uncover the individualized layers to your candidate’s motivations helps you understand if you can meet their needs. Now you can explain to them how they can meet their goals here, or not, effectively selling the role in an entirely integrous way with their best interest at heart.
CONCEPTUAL AGREEMENT REQUIRES RECIPROCATION
Understanding the other party is not enough. They must understand you. This is where real relationship starts. No trust is developed without vulnerability. Yes, you can be too vulnerable. You can also not be vulnerable enough. Point is, we must show up as a real human.
Recognize the temptation to ‘look good’ is human nature but counter-productive to building trust. The real motivation should be to ‘be good’ which requires honesty about deficits so we can improve.
This vulnerability requires judgement and the stomach to lose candidates who do not want to accept the specific expectations or limitations you’ve been honest about. But better to lose them now then later. It’s okay to lose the candidate for good reasons.
MAKE NO ASSUMPTIONS
Assumptions often come in the form of goodwill or the benefit of the doubt. However, they are costly to everyone. Just because someone has been successful elsewhere does not mean they will be successful with you. Examine everything. Worst case you will screen out candidate who look good on paper, best case is they will respect your careful scrutiny as it positively reflects your professional standards.
Hiring mistakes are rooted in a lack of open collaboration between the parties. Sometimes the idea of collaborating in a compensation negotiation concerns a hiring manager or candidate. No one wants to be taken advantage of.
The beauty of collaborative negotiations is you get to see adversarial negotiation tactics for what they are. If one side is more transparent and the other side does not reciprocate, that is an excellent indicator of that party’s perspective and indicates their future collaboration/negotiation performance.
CAVEAT: THIS IS NO PANACEA AND PROPER INTERVIEWING TAKES A LOT OF TIME
Some of the best hires I’ve made were snap decisions. Some of the worst were long conversations. There are no procedures that guarantee hiring effectiveness. We can move the success percentage.
We date for months or years before we marry and the divorce rate is still 50%. We trust friends slowly over time. We hire and trust people with substantial legal, financial, and reputation risk in the space of hours.
Sometimes you just lose out to a competitor fair and square. It takes keen judgement to diagnose and prescribe new interviewing behvior unemotionally.
While no one can afford to make every hire exhaustive, it’s important how impactful hiring is and how quickly we do it. Frankly, it’s a recipe for disaster to hire quickly. It’s insane to trust people with so much so quickly. Nonetheless, it is the way we do things.
TJ's advice on the challenges and market changes relevant to SME construction companies searching for talent on the West Coast.