Land the deal: negotiating the employment contract
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Landing the deal- turning the candidate into an employee. You’re keen, they are keen, so we are set up well for this to happen, but it doesn’t always work out. Sometimes we can’t help this, but sometimes we can.
The elephant in the room blows her nose
There is a very clear and identifiable beginning point to the stage we are discussing. You’ve interviewed the candidate, collected their references, tested them, and so forth, and you’ve called them up to offer the job. Thanks they say, that’s great; it’s all warm feelings up to this point. Now we get to the conflict- what is the offer?
The elephant is the conflict we have been avoiding. How much? What’s in it for me? The selection process is all about best impressions, giving good vibes. Candidates are motivated to diminish their self-interest, to enhance their common interests with you. But this is avoiding a difference between us, difference between what they want to get, and us to give. This is natural, but it’s unpleasant, but we need to resolve.
Conflict kicked down the road; don’t keep kicking
In these articles, I avoid making analogies between employment and romantic relationships; they are too easy but the implications get weird quickly. But I will on this occasion, because it’s strong comparison that can’t be found elsewhere. An interview is like dating, meeting them, seeing if it could work out as mutually beneficial before committing yourself and interwining your interests with them. But signing a contract is commitment; we need to move past being nice, to work if this will work for both parties.
Most of the time, pay and specific terms are discussed but not negotiated. It’s common for a prospective employer to ask a candidate salary expectations to ensure that it isn’t going to be a waste of time, and it’s common for the prospective employer to inform the candidate of standard terms in addition to salary (extra leave, bonus scheme, cost price product etc). But the conflict of the negotiation is put off until to offer stage.
Rip the band-aid
It has been my observation that it’s best to deal with this conflict in full at this stage. The temptation is to placate the candidate with promises of future reviews (e.g. we can’t meet your salary expectations now, but we will review in six months), but unless your organisation has specific mechanisms to ensure this happens, this delay of conflict will be remembered by the employee, and forgotten by the company, which is recipe for disengagement. Better to have a solid negotiation that does/doesn’t, bring on an engaged person that create a disengaged person.
The price, vs the terms
It’s important to differentiate the elements of the offer into their two constituent groups, because these will be all discussed together. Within the employment contract is the price, the benefits, the compensatory elements that constitute the price paid for the labour the employee will do (pay, leave, carpark etc). These are prices that can be negotiated- often its just money, but depending on bargaining power, candidates can bargain more favourable terms in the other elements); one of my negotiations once turned on the type of company car that would be leased for the potential employee.
The terms are generally less negotiable, more standardized, more rigid. These are generally requirements about how to act while employed (confidentiality, health and safety, location of work etc) and how employment may be ended- fixed term, trial periods, notice period and so forth. Often these terms are non-negotiable by the employer, because of strong preference for standardized terms in their own favour, and rarely are these deal breakers. The capacity to dismiss at will can be deal breaker- I’ve personal declined a job due to a clause that entitled the employer to dismiss without cause or process.
The narrow, narrow window of negotiation
It’s my experience that the window for conflict is narrow, and most of the time plays out like this. You send the offer, they take it away and review. If they counter offer, you respond to that with your second offer.
It’s my opinion and experience that this is the natural tolerance for conflict that both parties can endure. It’s likely that someone reading this has successfully concluded a deal with more offers and counteroffers, but in my opinion those would be the exceptions to the rule.
My observation is that there is always there is specter looming over the negotiations on both sides; ‘is this what they are really like?’ Everyone knows or suspects that interviewing is putting on your best face, that after the niceties, the reality of work will kick in. The more extend the negotiations, the bigger the specter gets, the larger the worry of ‘what if they are actually difficult’ gets.
I’m sure you’ve had this before- you’re talking to the hiring manager and they ask how things are going. If your answer is ‘they are stilling negotiating on price’ you know how that manager will react. You can picture the hardening- of eyes, or heart, of attitude to the person as an future employee. The manager’s engagement with them really takes a hit. So let’s avoid that.
You may need to withdraw the offer
Sometimes the deal doesn’t come off. There could be many reasons- sometimes the parties can’t meet in the middle on the price, sometimes the terms are unpalatable to the candidate. Sometimes the candidate is hanging out for a better offer, either from the market, another company they are interviewing with, or their current company, which means they may never have been willing to commit and engage with you.
It’s not uncommon for an offer stage to be extended for an uncomfortable duration. In my practice, I put a time limit on the offer, typically of 4 days. This is enough time for the candidate to review, get an opinion, come back with a counter-offer and consider the organisation’s counteroffer. The timeframe can be extended and will be if the parties are both engaged with the process, but without a time limit, the conflict can be extended due to avoidance, or stalling behaviour. So be prepared, both psychologically and legally, to withdraw the offer if the other party isn’t engaging in the negotiations.
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