How To Make a Job Offer and Negotiate Salary for a New Hire

**We have updated our guidance for 2023 in light of trends toward salary transparency. Please see How Candidates Respond to Job Ads That Don’t Disclose Pay, How to Determine Fair (and Competitive) Compensation for New Hires, and Why Compensation Matters for Inclusive Hiring.

After a lengthy hiring process, you really want the candidate to accept your job offer. And why wouldn’t you? The cruel irony of staffing is that the recruiting process only happens when you are already overworked and understaffed.

When your job offer is rejected, it’s frustrating. Some hiring managers feel personally rejected, while others feel embarrassed to have “gone to bat” for a candidate only to be rebuffed. It can feel humiliating to bet your internal political capital on someone who did not feel the same way about you. And even when you don’t take the rejection personally, it’s depressing and exhausting to even think about starting over with the hiring process.

At the end of a search, after all the interviews are completed and a finalist has been selected, most hiring managers are desperate to get back to their other work. And right in the very instant they turn their attention away from the hiring process, they unknowingly sabotage their chances of having their job offer accepted—the end of the search is just as important as every other step. The last thing anyone wants to do at job offer time is to sabotage their odds. But very few organizations manage the job offer process correctly.

Situations to Avoid and How to Handle Them

Unnecessary Delays Making the Job Offer

Why the best candidates keep rejecting your job offers. A slow-moving hiring process is like falling out of a 60-story building. The first part actually goes surprisingly well…until you hit the ground. As the saying goes, “It ain’t the fall that kills you; it’s the landing.” In hiring, you think your process is fine…until it isn’t. The longer you take to hire, the more candidates’ interest in your position falls. In many professional jobs, 10 percent to 15 percent of the best candidates drop out for every unnecessary week of delay.
Taking too long to make the job offer. Time passes very quickly when you are in control and someone else is waiting for you. A week passes and it feels like a day. But when you are not in control and you are waiting for someone else, every day feels like a week.

Not Managing Candidate Expectations During the Hiring Process

Why hiring drags on and on. Hiring is not like your other work. In your other projects, people notice every mistake and point it out. Every missed deadline gets the attention of upper management. Every failure has consequences. But hiring is like operating in a sensory deprivation tank. You get no feedback at all for long stretches of time. Until the very end, when things often go disastrously wrong.
What happens when candidates don’t know what’s happening? The “normal” interview process almost always fails to meet candidate expectations. And neuroscience research shows that when our expectations are not met, “…our brain doesn’t just get slightly unhappy, it sends out a message of danger or threat.” That is probably not quite the candidate experience you were hoping to create.

Missteps Before Making a Job Offer

Why employers need to stop asking for salary history. If you want to hire the best-qualified people, you need to stop insisting on seeing someone’s salary history in your hiring process–not in your ads, not on your applications, not in your interviews, and not when you make your job offer.
Don’t negotiate when you are desperate to make a hire. If you have not started your first round of interviews with a field of at least six highly qualified candidates, you will probably find yourself coming down to the wire with only one viable candidate at offer time. That makes your hiring decision both simple and dangerously flawed.
Revisit your expectations before making a job offer. Before the courtship phase of your relationship turns into a marriage proposal….hit the pause button. Check in with your candidate. Have a conversation about your expectations and theirs.
The value of employment references. By and large, great people have great references. At the end of a good reference call, you should feel more energized and excited about hiring the candidate. If you don’t, it should be a red flag for you.
Beware of falling into your salary spreadsheet when calculating salary. Beware of the zombie-like trance and the appearance of rational thought that an excel salary spreadsheet offers. Look up from your screen at the real, thinking human being you want to hire, and be sure you understand their expectations. No candidate ever wants to hear about “room to grow” in their future salary when you just offered them a lower present salary than they anticipated.
How long should you wait for a response to your job offer? My father-in-law often said that “Deals that don’t happen quickly usually don’t happen.” The longer I work in the executive search business, the more I value that advice.

Failing to Properly Set Salary for a New Hire

How compensation professionals think about setting salary. Many hiring managers struggle to find a framework to talk strategically about employee compensation. Fortunately, most compensation experts agree on what factors you should consider when making a job offer.
Why lowball salary offers are a mistake. The smart assumption to make when interviewing candidates is that the best people will receive multiple job offers at a fair market rate for their skills. Your first salary offer sends a signal, don’t assume every candidate will want to negotiate with you. Put your best foot forward.
How to hire within your salary budget. Before you overpay for your next hire or underpay and waste salary dollars on someone unqualified, you need to first understand whether you have a recruiting problem (you have not yet seen the right candidates) or a salary budget problem (you have seen plenty of candidates, but simply cannot afford to hire the right ones). How do you know whether your salary budget is unrealistic or whether you just have a recruiting problem?
Hiring to fit the budget vs, hiring to fit the performance expectations. When it’s time to hire someone new, you are often unfamiliar with what to pay or what the “going rate” is for those skills. And there is nothing wrong with not knowing. Not knowing is actually a good thing – you can be more open-minded. But if you did estimate a low salary budget, be sure to interview people who can actually do the work, not just the people who fit the budget.
Be ready to explain your compensation strategy. As a hiring manager, you now need to be ready to negotiate with equally well-informed job seekers. And while that may be unfamiliar territory, it’s actually good news. Credible, shared salary information helps to move the salary negotiation process out of the realm of hard-ball negotiating tactics and trust-damaging gamesmanship.
Should you consider internal equity or fair market rate? In hiring, the market rate is the only true benchmark. The minute you forget that you start overpaying your less valuable people, and your more valuable people start quitting to go where their skills are properly valued.

Hire Better By Focusing on Candidate Needs

To get what you want from the hiring process, be attentive to helping the candidate get what they want from the hiring process. Remember that you are not the only game in town, and any candidate strong enough to get one job offer can usually get two job offers. To be sure your job offers are accepted, keep your focus on the hiring process long after you have selected your ideal candidate.