Platt Perspective on Business and Technology

Negotiating what you can offer as a hiring manager in building and maintaining great teams

Posted in HR and personnel, strategy and planning by Timothy Platt on May 25, 2010

I recently posted a third installment on the negotiations phase of doing an effective Plan B job search where I made note of how a job candidate needs to understand the constraints that the hiring manager operates under. That is important, and I cite it as a reference for this posting as I turn to look at those constraints from the hiring manager’s side of that interviewing and negotiations table. Constraints, after all, apply on both sides of that table and the best candidates you would want to hire are also looking at other possible positions too, including positions with your competitors.

On the one hand you want to maximize the overall benefits you obtain for your business from hiring and onboarding a great candidate, and on the other you need to meet the realistic needs and requirements of that candidate in a competitive hiring marketplace. And for your key employees that means retention as much as it does initial hiring and for your best employees, this applies regardless of the job market as a whole.

From an accounting perspective this at least sounds like it should be a fairly straightforward costs/benefits analysis with a valuation of expected benefits from bringing this candidate on board measured against costs for doing that. This more readily quantifiable side to this issue is in fact largely one of bookkeeping, and certainly from the costs side with salary and benefits paid out coming with specific anticipatable monetary values and price tags in place. Benefits to the business from hiring can be quantified with at least something of a measure of exactitude for a lot of line positions too where a sale can have a known immediate value, and where employee performance is directly tied to sales and revenue generation. But even there, longer term value in making a one time sales opportunity a basis for repeat sales and ongoing value may be harder to quantify, as important as that is for ongoing business success. And for non-line and other supporting positions, new hires and the services they work in are often identified in the books simply as cost centers. The precise value created by these employees as they carry out their various on-the-job tasks and responsibilities can be much harder to quantify and compare to value paid them.

As a hiring manager, you have to be able to present your case to your supervisors and to the business that your team and your department offer value to the business, and in ways that would justify the costs incurred from hiring and from meeting the salary and other compensation needs of the best candidates available. In effect, this puts you in the same position that the candidate is in when they negotiate a job, only in your case you are negotiating a position you need filled and you are negotiating for the flexibility to hire people who can best do that job.

• Your job description should be drafted both with an eye outward to the job market and to prospective hires, and inward to the people you need to win over to be able to hire in the first place. Know and use the terms that would work for both of these audiences. Address their issues and priorities as you outline the responsibilities for this job and for both audiences.
• Looking inward, you want to develop allies who can support you in hiring where that makes sense and in hiring for the best whenever you hire at all. You want to identify and network with potential internal clients within your organization who would benefit from this hire to enlist their support. Ideally these people will help you argue the case that this hire will add value to the company, helping to clarify the uncertainties that a simple bookkeeping comparison might overlook.
• You need to do your due diligence in showing how bringing in a new employee will create and/or help sustain monetizable value. Quantify here where possible, and this is where citing internal clients that your team services can help, and particularly where those internal clients are in line positions that directly connect to the business’ bottom line.
• This always applies when hiring to a new position, but it can apply equally importantly when hiring to a continuing position that is currently vacant, and especially when the business is down and the market it operates in is slow – and there is pressure to cut back headcount and by attrition at the very least.
• When business is down, this approach can be crucial for staff retention and in maintaining a viable, functional team and even if you are not explicitly looking to hire new people to it.
• When business is starting to turn around again and senior management is looking to hire, this can be key to filling critical gaps and in keeping your team one of the business’ best performing.
• And this is all about negotiating, and in building a supporting consensus.

As a final thought in this posting, I want to pick up on and explicitly cover a point that has run as underlying assumption throughout this posting. When I discussed negotiations from a job search candidate’s perspective I made note of the asymmetrical nature of this process where the hiring manager can be at greater advantage from holding more knowledge as to what issues and value ranges are potentially on the table (see Part 15 of the job search Plan B series.)

The side of the table that makes the go or no go decision always holds this advantage at least as a strong potential as they are the negotiators who get to set the ranges and who at least get to set the starting point as to where priorities are. Here, the hiring manager starts out potentially in that weaker position and the hiring manager needs to do the research and preparation to balance out that starting asymmetry.

This is all about what you know as that hiring manager and it is all about what you convey in presenting your case that hiring and in this situation and for this position would benefit the business as a whole. As stated above, this set of issues may not be crucial when the business is expanding in general but when business is slow and markets are uncertain, it can become crucial. And when business is down and markets are in flux, strategic hiring can be essential if the business is to stay in step with evolving market needs and ahead of the competition.

So I started this by citing a comparison to job seeker strategy and planning and I end with that same point of comparison and for a reason – for some important considerations the hiring manager and job seeker face similar challenges. And a key to understanding the knowledge asymmetry here is in the difference in what people on the two sides of that negotiations table start out knowing as how to quantify value paid to a new hire and value received from them in return. It is easier to quantify salary and other compensation issues in an exact form and a great deal harder to so quantify value received in return and the more easily and reliably quantifiable always carries more weight – at least where a business has a good Finance department and the CFO is listened to. Ultimately, the compensation ranges offered for position levels on the table of organization, and decision to hire are based on this uncertainty and on the business’ understanding of acceptable financial risk – when hiring and compensation are based on a logical foundation. Understanding the underlying forces and dynamics behind business policy and presenting a case grounded in that – good negotiations makes all the difference.

I am going to write a follow-up posting to this on when hiring decisions and hiring parameters they have to conform to are not simply based on logical and even axiomatic decision making – when personality and interpersonal relationships and history enter the picture. In that, this posting simply sets a baseline, even if an important one.

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  1. […] first installment to what with this posting has become a short two part series. That first posting: Negotiating What You Can Offer as a Hiring Manager in Building and Maintaining Great Teams looked into the financial and related constraints that hiring managers have to accommodate as they […]

  2. […] and When To Do This for a job search example from the job candidate’s perspective, and • Negotiating What You Can Offer as a Hiring Manager in Building and Maintaining Great Teams for a posting on this from the hiring manager’s side of the […]

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