How You Handle The Offer Conversation Can Be The Difference In Getting A Recruit Across The Finish Line

So the big question is this, how do recruiting leaders like us who have 12 to 15 other job responsibilities, when at this game of recruiting, how do we build a system that allows us to recruit effectively in a minimal amount of time while motivating recruits towards meaningful change? That is the question. And this podcast will give you the answers. My name is Richard Mulligan and welcome to recruiting conversations. Welcome back to another recruiting conversations.

It's your host, Richard Mulligan. And. We're going to talk about how to have a compensation conversation with a recruit. Because this is such an important spot that you win and lose recruits And let me just tell you behind the scenes, when I'm consulting, one of the things that I look at is I look at this space right here, which is how many offers are we making? And how many people are accepting?

And then how many people are actually starting? And the way we handle this compensation conversation matters. In that gap that exists, and it's a big gap for most organizations. So let me just introduce you to some data around this, because in the dozen plus really large audits that I have done. Where we come underneath the hood of the organization and we look to see what is going on from a recruiting and a retention standpoint. One of the spaces that we look at is this right here.

How many offers have we extended and how many of those people actually showed up? And what was very normal is to have a range in the low 20 percent to the mid 30 percent from offer to start now, just grasp the enormous, the, the enormous amount of people. That we're whiffing on because we just don't understand how to have this conversation. I do think that this solves that problem.

I've been able to prove that what a lot of leaders do is they find the right person for the position and they get to this place where they say, can I make you an offer? And the recruit always wants to see the offer in fairness to them. If it's a bunch of like smoke and mirrors, and I don't know what's coming, It could be anything.

And in some industries that I coach, people that are recruiting, highly successful salespeople, they're giving an enormous amount of money upfront to these people to get them across that finish line. So if I'm at, if I'm that experienced salesperson, sure. I want to see your offer. I've heard about some of the other offers that are taking place in my industry. So we want to make sure we frame this up correctly for you.

This is an opportunity for you as a leader to get into the low single digit percentages.

Of going from offer to start. And if you think about that, if you can get a 4%, a 3 percent no show ratio from offer to start and other people are 35%, that is a major multiplier for you over the next decade. for who you're going to be able to not just bring to the team, but also retain to this team. When you think about it, there is typically two opportunities that exist in the world.

One of those opportunities is what I always call the opportunity improvement offering, and that just says we're a little bit better. Everyone, and most people. And when I say most Matt's being kind, almost everyone. Is saying we're a little bit better in some framework, right? Better compensation, better benefits, better support, better.

Hey, all those things say we're a little bit better, but when you look at business and you understand who the companies are that have literally changed industries. These companies never arrive on the scene and say we're a little bit better. They always arrive on the scene and say we're different. These companies present a different opportunity. Different is better than better. So how we present ourselves needs to be different. Not better comp, not better benefits, not better fill in the blanks.

We could go into a lot of places here, right? Better tools, better products, better support, whatever. So what we're going to do here is frame this up different. And where I always start with this is let's just set the stage because there's a moment in time as a leader that you are sensing. That you're ready to make this offer. So this can come in a variety of different settings, but it's typically in a face to face meeting of some sorts.

It could happen over the phone, but a lot of times it's happening either face to face virtually or face to face where you're actually in the physical. Room with that individual, but it could also happen on the phone. And what I like to do is in just setting the stage for this meeting is I want to make sure. That I'm not diving, just diving right in.

If this is a meeting that's building, like I've had lots of meetings that are building this moment, this meeting needs to begin with reestablishing credibility and relationship. I want you to start this meeting with this thought that this has to be a relationship building meeting. I'm going to re establish all the rapport that I've been working to build with this individual. But here's a really important second point I need you to get.

You have to understand your recruits dream and why that dream is important to them. Don't you dare. Okay, I'm just going to tell you this is of the essence of everything that I coach too. Don't you dare have a compensation conversation. Before you actually know the big dream for your recruit and why

that dream is important to them. And the reason why is this, let me just reduce recruiting to a very simple premise. If I reduce recruiting to a very simple premise, it's this. Is that as leaders, we have to understand the big dream for the recruit. And the framework that I like to operate in is like a 10 year window. Where do you want to go through this business? And also personally outside of business, where do you want to go in those two places over the next decade?

I've got to know that dream. If I know that dream and here's this framework, if you know the dream and you know why the dream is important to them and you as a leader can help them accomplish that Then I feel an obligation to convince you to join this team. Okay. So if I know your dream and why that dream is important to you, and I convince you that me above any other leader will help you accomplish that. It's not a matter of if you join my team, it becomes a matter of when you join my team.

So I'm setting the stage here because if you don't know that, why would you ever have a compensation conversation or an offer conversation where you don't know that, right? Because this shows up in employment surveys all the time. It shows up in behavioral psychology. We know this. The most important thing, if it's not in place, is feeling safe and provision. Safety and provision. That's, that's behavioral psychology.

Shows up in your employment surveys because people say they want more than money. And when you think about feeling safe and provision, that comes in the form of money. But we know about humans that they want to belong to a tribe of people that are like them. So, um, They want to be affirmed and they want greater purpose and greater meaning in what they do.

So if I know your dream and why that dream is important to you, then when I offer you something, I can connect to that, which is the most important thing. So I'm looking in the mirror here in the second point, I'm saying, can I articulate this recruits a dream and why that dream is important to you? And if I can, Then I'm going to keep going. If I can't, I'm going to stop here and make sure I drill down to get this. The third thing is this.

I'm now going to go on a journey of creating alignment with you and me. What do I know about you? That is also true about me. And this is a space where I go to core values, the things that I, uh, may have found in social media about you. Family's important. You put your family first. Integrity is important, but you're someone who's evolved in a nonprofit.

You lead with your faith, like whatever those things are that I know that we have alignment around, I'm going to actually reconnect the dots in those. Cause this typically comes through the process of getting to know each other. I want to bring those things front and center again. And cause I don't want to take for granted that you see what I see. So I always call it the, do you see what I see game?

Because if you see what I see, then whatever I offer to you is going to be much easier to convince you to join this team, even if I missed the mark in some areas, and if you're in a really competitive industry, For example, we're working with a number of people that are in the mental health industry today. And what we know is that for every 10 people that enter the mental health industry, 13 people leave.

And the reason why they leave is because 80 plus percent say that they're, that if you're a mental health professional, you'll know this, about 80 plus percent say that they are suffering somewhere between extreme burnout and burnout. And so they're going to different places. We also know is that over the course of the next decade, there's a major shortage, a major lack of, of opportunities that recruits in this space. So you're in a highly competitive industry.

And if you're in the mental health industry, looking for a therapist, a counselor, a psychologist, um, so you, these are some things for you. If you get stuck strictly solely on compensation, you may lose On compensation. So I want to connect the dots of these things because people want more. We're aligned in terms of our values. I, as a leader, understand your dream of why that dream is important to you. I care about you.

You know that I care about you as an individual, because I went on this journey of building a relationship with you. Those are points one, two, and three. I just backed into them. I get into this place now where I'm going to ask the question. I'm going to ask permission. Would you be open to me making you an offer? And I think that's important to do. Too many people make the assumption and sometimes even create it. Okay. I literally have had people send me offers, okay?

In my journey, I've had multiple companies send me offers by email. I had never even had a comp, a conversation with them. And to that, I'm like, what just is confusing? Okay. If I'm not ready to have the offer made, why would you make me an offer? So I'm going to add, I'm going to gain permission here. Okay. This is a way of building trust with people. When you ask if I can cross this Bridge, if I can take this next big step with you, would you be open to me making you an offer?

Is that fourth step that you need to be following? Okay. Now, here's where I go. You need to have a belief system that allows you to create some guardrails for this conversation. Okay. So what do you believe about compensation? Have you ever thought about that? Like, what are some of your beliefs around this? Like, one of the things that I believe, Is that compensation should be fair. And if we get into the dissection of that word fair, it means that it's a two,

it's a two way street, like fairness. If one person is, if it's being unfair to either party here, that will be a short term relationship. If I pay you too much and it's detrimental to the health of our organization, at some point, we'll have to pull away from that and we'll change it. And then that's detrimental to you staying within the organization. So where I always start is I believe in fair compensation. In fact, we always talk about living the ideal life and lifestyle.

We believe there's five things that represent the ideal life and lifestyle. One of those things is fair compensation. So I believe in that. And that's a guardrail for me, because if there's something that's not fair, If I'm not giving a fair offer, and if I'm not, if the offer is not fair to us as an organization, that's something that won't work long term. So I always start there.

The second thing is this, I recognize that when I'm asking someone to change organizations, they're taking some risk. You may not get your last paycheck. If you're a salesperson, your agreement might state That you get paid on closed deals, not deal started. So there is some risk here that the person I'm looking to bring to my team is taking. And so I believe in building what I call compensation bridges, right? It's like an on ramp to my organization.

Okay. So I want to know where have you been historically in terms of your, if you're a salesperson, in terms of your past commission, in terms of your past production. Where have you been historically? I'm not going to ask you to take this big leap, taking risk here, unless I can show you that there's a bridge there to get you from where you are to where you need to be. So a lot of times this will depend on the type of industry that you're in, the type of position that you're hiring for.

Well, I've spent most of my career in sales. And so salespeople have a track record, right? Like you've produced X and last year you made X and your current commission structures X. And all of that leads me to a place where a lot of times with a salesperson, I'm giving some form of guaranteed compensation in a window. And that for me is the bridge. I want to build a bridge here. It needs to be fair. And then I believe I'm building compensation bridges, compensation on ramps.

I'm giving you some ideas here. You get to define this yourself. What do you believe about this? What would you defend around this? Here's the third thing. And this one's going to be a little bit controversial for some of you. I don't believe in sign on bonuses. And let me tell you why. So having spent my entire career in sales, I am very aware that some industries, not only are sign on bonuses used as incentives to get people across that, that finish line.

But they can be massive amounts of money. And so a CEO might challenge us and go, that doesn't work for us. Here's what I want to task you with. I probably have more recruiting data as an organization than 99. 999 percent of the world. Here's what I'm aware of. Sign on bonuses don't work in terms of the percentages. They don't work long term to retain employees.

Okay. I was recently looking over one for a specific industry, and this was a peer group study, it was a group of CEOs and the CEOs were being asked when you hire people, when you recruit people, what are the forms of incentives that you give in order to get them across the finish line? And the incentives kind of fell into a couple of buckets. And one of those was signup bonuses without a clawback.

If you're understanding what a clawback is, where if you leave, we actually, you have to pay us the money back. So signup bonuses with clawbacks, signup bonuses without clawbacks, uh, guaranteed compensation over when it's a time and increased commission over when is the time. And there was one more category used called other. We don't know what it was, but it was, it's outside the box of those four areas.

These CEOs said that sign on bonuses don't work the data set it at a really high rate Okay, sign on bonuses don't work. Okay, and so I know it from my own experience I know it from seeing the Intel being behind the scenes working with companies as a consultant I know it from public information public data is being used Here's the challenge for you as a leader, and this is where I want you to go.

If I can't bring you, as a leader, more value than your current leadership is bringing you, why would you come here? That's why I stand in this space and say, I don't believe in sign on bonuses.

Why? I believe that if I can't bring you more value, if, and I can point back to your dream, Are you accomplishing your dream and are you able to stay aligned with why that dream is important to you while working at your current organization? I don't know leaders who are even asking that question. Okay, I would say most leaders never even get to the heart of, Why is this person here and how am I helping them in the greater scheme of their life? Beyond the compensation.

So it forces some of these things for you. If I know your dream and why that dream is important to you, and I'm all about helping you accomplish that is way better and way bigger than any sign on bonus, I'm going to give you. If you're a salesperson that needs coaching and wants to grow, I can bring you lots of value in that space.

And if you as a leader can't look in the mirror and know that you're going to bring a lot of value to the people that you're bringing to your team, then the challenge for you is to go on a journey of becoming more valuable. So I can stand here with a lot of confidence in this space and say, I don't believe in signup bonuses because I can give you a long list. of other reasons why you should be here. And remember my belief system, which is that the leader is the product.

So I should be improving myself as a human. I should be coming a better product always and forever. And if I'm a great product, then why you'd come here would be for me. So challenge for you in this is that you get to define your own. What do you believe? And when I sit with someone, I say, let me just establish what I believe about compensation. I'm creating some guardrails for where this conversation is going to go. If you don't, then this conversation could go anywhere.

Now let's keep going here because you go and you create your offer. And every one of you has your own different processes. Some of you are able to put these together yourself. Some of you go through an approval process where you, they go up the

hierarchy inside the organization and somebody else has to approve it. Some of you are completing forms online with HR and they're sending them back to you. Okay. But I don't want this offer to ever be presented without you being present. Okay. So you need to think about the internal workings of your organization. There are some organizations that the moment you give that information to HR, it gets blind. I'll call it, I'll use the word blind.

It gets blind emailed, meaning that it just comes from a generic inbox at HR. And that recruit gets to go through that offer themselves. I will never email an offer blind. And the challenge for you as a leader is to do the same. What you will find, okay, I have the data around this. What you'll find is that when you blind offer. The percentage of offer to start, not just goes down, it goes down dramatically.

What a waste of time for you as a leader to go through all this trouble, identifying the individuals you want to pursue in your market, pursuing them, putting them through a process, getting to a place where now you're ready to make an offer. Now the offer goes out blind. And a lot of times you will begin to get ghosted. Why? I think about that. Why would you get ghosted in this moment after you made your offer? And this person said, they'd be open to seeing your offer.

And you're like, I think that offer is incredible. Why would that, why would they ghost you? Because now the next step is the big, risky, crazy step of saying goodbye to their current organization, where maybe they're comfortable and moving into yours. So I'm a huge believer in this idea that to some degree, we're playing a game of tennis, think about the game of tennis. When I hit the ball to you, it's now in your court and you have to hit the ball back to me.

If I can hit the ball to you, run around on that side of the net and help you hit it back to me, then the ball's always in my court. So I will always gain agreement on all of my next steps. I don't leave anything out here open when someone says, let me, let me look at that and get back to you. That's just a generic response. There is no, there was nothing agreed to. If I then proceeded and said, what's your calendar look like later on this week so that we can get back together on that.

Now I'm working towards gaining agreement. So I just want you to challenge, challenge, understand the internal workings of your organization, how these offers go out. The second thing is this, always present it live. I want to go over this with you to make sure that you understand it. Employment agreements aren't simple. Maybe yours is, but I've seen a lot of employment agreements over the last 30 years. Most employment agreements are complicated. They're written by attorneys.

So, when I present this, I don't want you to confuse anything here. Because my integrity, my character, the trust that I've built with you, it's all on the line here. And if I said I was going to do X and then X doesn't quite show up that way, or it's not understood that way, then I lose everything that I've worked towards. I want to present the offer live to you. I want to see your response. I want to hear your questions. I want to create next steps from this presenting it to you live.

So this next step of making the offer. I'm going to gain agreement on when I can actually make the offer to you. And I want to make sure at least I'm doing this over zoom face to face in person is even better. I just want to encourage you. The virtual world is such an easy world to operate in today. Like I'm going to do a screen share and I'm going to hang on to that offer until the very moment that your eyes are setting on it, and then I'll send you with it. So don't blind offer, offer live.

And then from that, you're going to gain agreement on next steps. Don't you make me an offer. I might say, let me get with Leah, my wife, and I'll get back to you. And a lot of people go, we gained agreement on next step. We're going to, he's going to talk to his wife. He's going to get back to me. No gaining agreement around a very precise, very clear. Next step would be Richard. It's Friday. I would guess that you're going to have this conversation with Lee over the weekend. Am I correct?

Yes. Great. What is your calendar look like to get back together on Monday or Tuesday? I'm open on Monday afternoon at 2 p. m. I'm open at Tuesday at 4 p. m. Which one of those works best for you? Now I've gained agreement around my next step. That's going to be important for you. Okay, so this is the way the conversation is going to go. You've got a great framework here. Now, one of the things that you need and why I want to cut another podcast around this compensation conversation.

Is that I believe there should be a separate document that exists. It doesn't come from your HR. Okay. It's not part of your employment package, but I think you need to have a document that entails the value that you bring as a leader. Okay. The things that you bring at a local market level ideas that you bring coaching, that you bring events that they would be invited to. There's a long list of things that we just get comfortable saying. They're just part of what we do.

Okay. In business, I worked with a phenomenal leader this week and in creating a, what are you going to get document, which is why some of this is very relevant right now. And what happened this week for this leader is that offers been presented. There's a separate document that exists called, what are you going to get outside of the actual offer? And there were 11 things of value that this leader brings. They are incredible pieces of value.

He's hiring a salesperson, a highly experienced, highly successful

salesperson in his industry. And this document here lists out 11 things that ultimately lead to the salesperson growing their book of business, living a better, more balanced life. They, these things are invaluable and it's on a separate list and articulates it incredibly well. So when we come back here in the next podcast, what I want to do is how do you go create this? What's the journey of creating a, what are you going to get?

That I can present, I can tell you this conversation this week went like this. The recruit literally held up the, what are you going to get document to this leader and said, the reason why I'm joining your team, your offer, your money offer is the same as another company that, that, that made an offer to me. The reason I would come to your team is this right here.

And I think as leaders, we do a very poor job of really thinking through all of the things that are of value that we offer to people and that we're A lot of times have real dollar figures associated with them.

When you bring someone to your team and you put, you have a 90 day marketing jumpstart program, or maybe you build a website for them and you announce to all of their referral partners that they've joined the organization, you take on their database and begin marketing that they're at a new company for them. And those things are valuable to them, right? Not every company has that. And every leader builds a process and sequence around that.

If you can handle this conversation and a framework that I've given to you, and you have a massive amount of value that you're going to bring outside the dollars and the cents that are going to show up in that employment agreement, you are not just going to improve the chances that you get someone, you will significantly, dramatically improve the opportunity of getting someone. So we'll come back here, another episode.

And until then, you've got some awesome next steps that you should be working on, that you should be laying out. This is a sequence. You're going to build relationship. You're going to make sure you understand the dream and the why you're going to create alignment. You're going to ask for permission to actually make the offer.

You're never going to blind off for anyone. And you're going to present this live. And once you present it live, you're going to gain agreement on the next step for when you're going to get back together to cover any questions that they might have had in between looking at that moment and looking at it with their spouse or anyone else. And if you do that, what you're going to find is this.

You're going to take this big gap or this big void where there's maybe 25 to 35 percent of people that you're not getting, you're going to reduce that significantly. And it's a big multiplier for you. When you start to look at a year, three years, five years, 10 years from now, you will get more people than most will recruit simply by having a compensation conversation roadmap. So come back again here next week, and until I talk to you then have a great week, everybody.

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