• Making a job offer? Lowest isn't always best.

    Thu 21 Apr 2011

    Some employers tend to offer the bottom of the salary range that a potential new employee asks for. Not because there is any reason to negotiate down, not because the budget can't stretch any further, but because they feel they should offer the minimum that was asked for. It's just the way it's done.

    Why is the instinct to offer the minimum? Perhaps it's because the person making the offer feels that their company expects them to get maximum value for money. Perhaps it's because the person making the job offer naturally likes to "win" deals and negotiations. Perhaps the employer feels they should offer the minimum because there is some element of the job seeker's skills or experience that is not a perfect match. Whatever the reason, if you are an employer who is about to make a job offer, think about whether offering the minimum is actually to your advantage.

    Put yourself in the shoes of the potential new employee. Moving to a new job is a big deal. They are excited about this major life change and nervous too. It's a risk to take a new job. Everyone has a portion of their self esteem bound up in their job. Probably they'll want to talk to their husband/wife/girlfriend/boyfriend/family/friends about the job offer and maybe ask their opinion (or permission). They'll want to feel validated, to be seen to have made a good decision, and to feel valued in the eyes of their employer and also their peers. The best possible position for someone to be in when they discuss a job offer with their family and friends is for them to feel they have "done better then they asked for".

    When someone joins your company you have the opportunity to set their state of mind from day one. You want them to feel really excited about the new job, and you want them to feel not only that it's a great company and a great job, but you also want them to feel that they have taken a step up in the world. You want the new employee to start off with as much goodwill as possible. One easy way to get a huge boost in goodwill is give a pleasant surprise in the salary offer - make it higher than the minimum requested. You don't have to offer a huge amount more to gain goodwill; even a few thousand dollars is enough to give the potential new employee the sense that they have done better than they expected. Those few thousand dollars will buy you far more goodwill and enthusiasm than the value of the cash.

    So offer more than the minimum and gain the goodwill of your new employee, it'll pay off.

    If you're thinking about offering less than the barest minimum being asked for, that's no problem if the potential employee has overvalued themselves. Otherwise, think about what the inverse of goodwill is, and if you wouldn't better off with a more motivated new employee and a few thousand less cash.


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