“A wise person should have money in their head, but not in their heart.” – Jonathan Swift
So when it comes to attracting new senior hires – does money make the world go round?
It is true to say that people are motivated by a range of different factors at work, many of them are non-financial and do change in relative importance throughout an individual’s career. But experience tells us that 9 times out of 10, you have to offer people more money to move.
Last week, I talked about how to write a foolproof job description to attract high calibre candidates to your company. While this is a critical starting point for attracting the best talent, an attractive and well-defined role is just the first step. In order to convince anyone to leave their current job, you’re going to have to get your compensation offer right.
The remuneration package is the most tangible aspect to the offer and finding an optimal balance that works for all parties can be a fine line. It has to be enough to incentivise the candidate to move, within budget, and fair when compared with internal and external candidates with similar experience.
Here is my guide to getting your compensation package right for new hires;
1. Benchmark salaries
It’s essential to have a realistic salary in mind right at the beginning of the recruitment process. As an executive search firm, we plan out a project according to its budget and scope, it will influence where (and at what level) we will be able to attract people from.
It is very rare that clients come to us with a salary figure in mind for a position and we tell them they don’t need to pay that much. Much more often they underestimate.
Sometimes they will look to benchmark people in similar roles within their own company. Be careful when making comparisons to internal people who may be underpaid for their experience; if they have been a long-term employee, their salary won’t have increased in line with the market.
Take a look at your main competitors to get an idea of the market rate for similar positions. You can do this via contacts you have at these firms or those at consultants and clients who work closely with them. Executive search firms such as ourselves will also have a vast amount of data and industry knowledge to help you understand the market. We provide benchmarking information for free to our clients.
Once you know how much your role is worth, you need to make sure you are paying enough to convince the right people to leave their current jobs and work for you.
There can be an assumption when you’re immersed in a company that everyone is dying to work for you – but there are a lot of good firms out there and many people are settled in their jobs. They know their way around their existing roles and they may have built family routines around them. Put yourself in their shoes – why would you change all that to work for your company?
It is important to bear in mind that most candidates with a solid and successful career history will often seek an increase of 15-20%, with many actually moving for a c10-15% rise.
3. Get the balance right
Ultimately there is a trade-off between the job specification and the salary. If the salary is not moveable then you may have to be flexible on the level of skills and experience you require. Put simply, the more responsibility and skill requirements attached to a job, the higher the salary will have to be.
Be positive, look at the impact of the job. How much money could the right person make or save you, and therefore how much can you afford to pay to get – and retain – that person?
4. Be flexible
If you can’t change the base level of salary, little things can make a difference. You could base a role at home to allow travel to be claimed as an expense, or offer additional holiday allowance.
More and more companies are offering flexible compensation packages, allowing people to pick which benefits they like from a range of options. This works because different people have different situations and motivations, which also change throughout their career.
Some smaller companies can even work out specific plans to attract individuals, such as flexing pension contributions or bonuses up. Any flexibility you can find is a potential benefit.
If you have put together the best compensation package you can, you’ve re-evaluated your job specification and you still can’t find the person you want from within your market sector, it is always an option to investigate allied sectors.
For example, if you’re looking for a health and safety director with rail experience, but they are all in high demand, you could look to the oil and gas sector, which is not as buoyant at present. This sector may have strong people whose futures are uncertain and who may be keen to move.
Another approach is to recruit someone who is currently at the level below the role you are filling but is ready to take a step up in their career. They will be more affordable than someone already in the equivalent role at a competitor.
In both these cases you should expect to give more support at induction and anticipate a longer learning curve.
Flexibility can work well but to capitalise you need a broad sense of what is happening around you. Again this can come from research and contacts or you can look to tap into the knowledge of executive search firms who have a wealth of research at their disposal.
**This blog post is the second of seven based on Newsom Consulting’s ebook The Ultimate Guide to Hiring Senior Managers in Transport and Infrastructure***
To get your free copy of the e-book of “The Ultimate Guide to Hiring Senior Managers in Transport & Infrastructure” please click HERE