Attracting, selecting, and retaining top talent is a challenge for many businesses. Join long-time executive search professional Scott Peterson, alongside Steve Yakesh, President of Direct Hire & Executive Leadership Search at one of the leading executive search firms, to discuss insights and techniques to assist companies to achieve their best results. If you’re an executive leader looking for advice on hiring the best talent for your company, you’ll want to hear this advice from these industry experts.
Steve Yakesh | President, Direct Hire & Executive Leadership Search
As President of Direct Hire & Executive Search, Steve Yakesh leads Versique’s award-winning permanent placement division with more than 20 years of experience. Additionally, he guides strategy for Versique’s twelve practice areas, including IT, HR, Finance & Accounting, Engineering & Operations, Sales, CPG, Digital Marketing, Executive Retained Search, Healthcare, Manufacturing, Family Owned and Demand Generation.
Scott Peterson | Vice President, Executive Leadership Search
Scott Peterson leads the Retained Executive Search division at Versique as the Senior Practice Director. In his role, Scott fills critically-important senior level positions such as CEO, CFO, CIO, COO. Scott has over 20 years of experience in executive recruiting. Additionally, Scott has also served on the Board of Directors the University of Wisconsin-Eau Claire Foundation, Medina Golf and Country Club, as well as several youth sports organizations.
|Get ready for your weekly dose of talent strategies and tactics from industry leaders to help you attract, select and retain your top talent. You’re listening to Inside Executive Search with Steve Yakesh and Scott Peterson.
|Hello and welcome to the Inside Executive Search podcast. My name is Steve Yakesh and this show is for business owners, board members and executives exploring strategies and tactics to attract, select and retain the very best. If you’re not feeling 100% confident that you have a plan to recruit, said very best, keep listening, this podcast will help you get there. That said, I’m once again excited to bring in Mr. Scott Peterson from Versique Search. Hi Scott.
|Good afternoon. It’s great to be here today.
|Last week we covered interview bias and we previewed that we were going to be coming into this podcast that we were going to be talking about retention strategies and tactics. However, we’re going to do a little u-turn. So, based on some of the responses and feedback from our listeners, they were hoping we would dive into a little bit more detail about presenting an offer. We sometimes take that for granted because it’s kind of what we do and we do it all the time, but I can appreciate others wanting to learn about what’s the better way to present an offer and the do’s and don’ts. Right? Yeah.
|Yeah and we’ve certainly seen the offer at the offer stage at go in multiple directions. Sometimes it goes great, sometimes it goes in a direction that a we don’t want to or the client doesn’t want to. So we thought we’d give some insights and tactics around the offer process.
|Yeah. And I don’t envy companies that are doing it on their own. We as search professionals, we just have so many more tools that we can ask and close the candidates as at that third party.
|We have the fortunate position to be having confidential conversations with our candidates, so we kind of know where their head is, what else are they looking at? Where are they at in terms of those opportunities? And so we’re always talking to our candidates through the process probably more so than just a company would on their own.
|Yeah, and I agree and I’ll maybe just recap with, we as a firm are another search firm out there. You know, they’re closing the candidate, they’re asking all the, you know, quote unquote tough questions. What if, how about this? Well, what if they offered this versus that, they flush and we flush all of that out so we can confidently go our clients and say, Bob is accepting the offer. If it’s at x to make y with these perks or benefits, etc. and really help our clients get there. So there isn’t any issue about somebody accepting it, but when they’re doing it on their own, that can be tough.
|Right, and we’re even talking the first conversation with a candidate about what their expectations are versus what we know our client’s willing to do generally speaking in the compensation package. We try to get alignment before we even get to that offer day. That’s a bit more tough if you’re doing it on your own.
|Yep. So let’s just assume some of the tactics prior to presenting the offer was done. So, when the first or second conversation with candidates, you’ve said, hey here’s our compensation range and they obviously know the scope of responsibility, who they’re going to report to. Everything’s feeling good. Yup. All right. So that’s the assumption. So, my first question, who should be presenting the offer? Is it HR? Who’s the right person in your opinion?
|And we’ve seen it go both ways in terms of HR presents the offer or the hiring manager. My recommendation is the hiring manager should do it. You gain much more candidate loyalty. If I’m the hiring manager and I call you Steve and I say, Steve, I want you on my team. I thought we had a great interview, the interview panel, your evaluations came back, your assessment came back great and you’re going to be working with me and for me. It’s much more impactful and actually makes you feel better about the opportunity and the company because they’re going that extra step and having the hiring manager and, or the person who report to present that offer. It just works better.
|Yeah, and to that point, if I’m the HR leader who is typically the one presenting offer by default, right? Or the talent leader. I can see how that would be less impactful if I as the HR leader say, Hey, Scott, guess what? Taylor is excited for you to join the team versus Taylor saying, Scott, I’m so happy to extend this offer and get you on my team. You’re going to do great things. Right? I mean it’s just that simple example I think will make sense.
|Yeah, that’s a phone call by the hiring manager to present the offer orally. Now internally you can say the offer might be coming from our HR person from a logistics standpoint internally in confidentiality of information. So, HR might that off or via email in a word doc as a follow up to that. But that initial phone call to make the verbal offer, we’ve seen it work much more effectively by having the hiring manager do it.
|Perfect. So, segue in and I’m now the hiring manager. I’m reaching out to you to extend that offer like you just gave us guidance, walk us through that conversation, not necessarily in delivery of the actual numbers, but prior to that, what are some of the important keys as I should be talking about too?
|Yeah. And really this goes even before the offer, but continued to ask those questions. Like, do you have any hesitations about coming on board at this company to this position with the information that you have? So, you’re gauging their level of interest before that verbal offer might go out. If there’s hesitation, if there’s a question, you can jump on it right away and say, Oh, you know, our strategy around international acquisitions is going to be this and that might just be enough to push that person into accepting the offer when they didn’t really know a couple of key elements during the process.
|Sure, or maybe it might even just be a little things too like, if it’s snowing outside the typical Minnesota winter and are you okay if I show up at noon and not fight the traffic or work from home that day.
|Little things that sound trivial or minor but they all kind of just matter in aggregate. It might even be, do I get a parking spot up front? Right? There are just little things that matter in total in and of themselves probably don’t move the needle one way or the other in an offer. But I like that idea of just getting it all on the table verbally versus having to go back and forth and negotiate after the fact.
|Yeah and you know it’s a good point too. I mean because at a certain point I’m trying to put myself in the candidate shoes. I’m interviewing with my hopeful future company until you’re kind of selected as the person, you’re not going to ask about that parking spot up front or certain little tiny things because they are somewhat trivial but at the same time they are important. And if you are asking about those, you’re probably not going to be their candidate. Exactly. Early in the process. You don’t want to do that. So I get that, Scott. So we’re covering all those little nuances, parking spots, etc. and we are now needing to talk about numbers. Your base salary, annual cash bonus, the metrics that surrounded it and now tip all that other stuff. When do I enter in the conversation about are you going to accept a counteroffer? What’s your current company going to say? How are you planning on resigning? Is that before I’m presenting the numbers? Am I presenting a numbers, getting excitem
|Well, I think you talk about counter offer throughout the process and that’s a little bit easier when it’s a firm that’s representing your company and the firm will do that continuously throughout the process, but it’s something that you want to walk through with a candidate, especially if they’ve never gone through an offer and counteroffer process. There is a lot of statistics out there that if you accept a counteroffer at your current company because you told them you’re resigning for another opportunity a high percentage of those employees leave from that counteroffer company within a year.
|Yeah, I’ve seen anywhere 60 upwards to 80% engaging. 80 might be a little high, but 60 is kind of scary. Right?
|And why is that? Well, now the company knows that you are an interested in staying other than for more money, because really nothing changes in the job or the company, so the only thing they did was offer you more money to keep you and so you want to have that conversation with a candidate saying, is there anything that they could do at your current company to keep you.
|And I always throw a big what if’s. What if they came back with $30,000 more on a base salary or what if they came back and gave you a piece of equity, how do you react to that? Right?
|That’s the kind of things that you want to know even well before the offer as well but again as a last piece of the process, you asked that again because you want to make sure that nothing changed from the previous times that you’ve asked it.
|Yeah. Then it comes back to like we’ve talked about a few times during these podcasts, kind of those three areas to get alignment in. If I’m about to present an offer, I’m probably wrapping in and reminding them of our company culture and how they fit, how their skills and experience align really well with the job at hand and as important, the vision I see, not for this person, I’m about to make an offer to what their career path looks like. Right? Get them thinking that way and that’s going to help them.
|So any counter offer they would get is just irrelevant because you’ve got really good alignment on those three areas. Then there’s really nothing that company that they’re leaving is going to be able to do other than offer more money and that just delays the inevitable in my opinion of that candidate leaving that company at another point in time.
|So about employment agreements, obviously at the executive level they’re more frequent. Pretty standard, right? What’s your guidance, are you talking about what the framework of that employment agreement looks like prior to extending that offer? Or is it just assume we know that there’s going to be one and that’s the little stuff will get taken care of after the fact? What do you think?
|This depends on the size and sophistication of the company. Sometimes there’ll be smaller organizations that are hiring a CEO where they don’t do employment agreements, right? Sure. But this candidate might be coming from a place where they have one. So now the new company needs to think about that needs to understand that that’s part of their package, part of their compensation, part of their deal to have one of those. You want to make sure that there’s an understanding up front of are they going to need one. If you’re using an outside service provider like us or others, we already are having those conversations with candidates, we’ve already seen their current employment agreements so that we can have alignment with the new one, but yeah, those are pretty standard in the industry now at the executive level and they contain a lot of different things from severance package, change of control,
|so if the company gets sold, do their stock options accelerate, invest immediately. So there’s just a lot of detail and typically lawyers are involved in those, whether it’s a company’s internal lawyer, legal team that’s put it together and then my recommendation is probably having the candidate get legal counsel as well because in a lot of those agreements are very legal jargon which can sometimes make your head spin a little bit in terms of what do those words mean? Or what does that paragraph really mean?
|Sure. No, that’s good to get good guidance. So, do you pass on, you mentioned earlier the logistics of physically sending the offer. Do you recommend the hiring manager also kind of outsource, figuring out start date and building that onboarding plan, etc. Give the listeners your thoughts.
|I think the hiring manager can say, hey we would love to have you here on September 1st. We’ve got a strategic planning meeting on the fifth. We’d love for you to attend. Sometimes an executive has a 30-day notice, or a two-month notice, or a three-month notice built into that employment agreement, right? So, you have to understand, and again, I keep going back to if using an outside firm, we would have known that and communicated that to our client that they had a 30 day notice or whatever the notice requirement is because they’re a top executive. So, understanding all that again certainly want to lock that down at this point. But also, you should have understood it coming in of, what is your current employment agreement look like? That can be part of that interview process and understanding what all they have to bring to the table there. Perfect.
|All right, well the last item, kind of the dark, dreary part of this conversation. What if they don’t accept your offer? I got two questions. Do you go back and ask why and try to put an offer together that they will accept, and then my second part of the question, if that’s just not the key and you’ve got to start over, what can you give guidance to accompanied as takeaways? What can they learn from their current process?
|First off, yes you always ask why because there may be an opportunity to enhance your offer and it may be in something that doesn’t cost you much. Again, could be those little things, it could be a car allowance, it could be a multitude of things, but understanding of why. Now that why could mean I have another offer and that opportunity is better for me. Right? I would still ask the question, why is it better for you? Tell me what about it is better? Is it compensation? Is it location, is it size? Long term opportunities, growth potential, etc? So, just because they say no, it doesn’t mean it’s over, it might mean that we didn’t quite get the offer right and so again, asking why or have them counter back, what would you accept?
|Is there anything I can do to change our offer that you would accept? And I don’t encourage that going back and forth 20 times because then they’re just kind of grasping at compensation and that’s not the kind of person you’d probably want in your company. You missed in that alignment somewhere else if you’re going back. And that gets back to the second piece, really evaluating your process of how did we get all the way down to the alter and the groom runs down the aisle and leaves without saying, I do. Right? So evaluate yourselves a little bit, look internally, look in the mirror and say, what did we miss in this process? When did we not ask the right questions at the right time or did we not ask the questions at all? So yeah, self-evaluation is always something you want to do when something like that happens and I actually encourage it even if it’s a positive outcome, look back and say, what did we do right and evaluate that again.
|Right! Again, a plug for us and other firms, we insure if the client gets down on bended knee, the person says yes, not maybe, or let me think about it, right? And I think some companies, if they’re doing it independent or on their own, they are better at it than others. But I mean that’s a tricky thing, especially at the executive level.
|What we have found is that most companies internally, if they do the process, are uncomfortable asking those questions early in the process. Where us as executive recruiters are expected to by our clients. So think about that in your process as well. Don’t be afraid to get that level of detail early on so that you are so to speak, dancing with the right partners all the way down.
|Well good, that’s going to wrap up this plus one episode adding in the offer and onboarding and acceptance type conversation, which I enjoy. I’m glad our listeners brought it to our attention, so I’ll give you the same preview for next week as I did last week. We’re going to be looking at a variety of different retention tactics and strategies moving forward now that you do have your brand-new top executive or key roll onboard, how do you ensure high levels of retention for the long haul? So, we’ll dive in next week with the high-level overview of what the following, what four or five episodes will look like. Selection and Attraction are in the books.
|Now we have the third leg of the stool, retention.
|Absolutely, well, as always if you want to get ahold of Scott, feel free to look them up on LinkedIn or hop out to versique.com and click on executive leadership. You’ll be able to find him. And if you like what you hear, go ahead and subscribe to us on a major podcast channels and we will talk to everybody next week. Sounds great, talk then. Alright, see you, Scott!
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