How to make sure the candidate takes the job
Now that you have decided which candidate is the most suitable for your role you will want to make them an offer. It is important to get this right. If the selected candidate turns you down you may need to start the whole process again, which will be time-consuming and costly.
If you have a second candidate who is a close contender, consider if you will offer them the job if your first choice declines. Explain to them that there will be a delay in making a decision. Perhaps a key decision maker is away, for example. Do not tell them they are second choice as psychologically you want them to think they are exactly what you are looking for, should you decide to offer them the job.
By this stage you should be aware of what is motivating the candidate to seek new employment and join your company. This motivation is usually complex and is unlikely to be purely based on money, but this will play a big part and you need to make the offer as appealing as possible.
How to structure the offer
In larger organisations salary and benefits will be pre-set and the candidates will already have been told what the package is, but in many companies there is some flexibility.
Before you can put together your offer you need to make sure you have the candidate’s full present salary and benefits, which will include some or all of the following:
- Basic salary.
- Personal bonuses (those based on individual performance) – how they are calculated and how much they have earned.
- Group bonuses (based on team effort).
- Company bonuses (based on company performance).
- Commission – how it is calculated and how much they earn from it.
- Pension plan – does it include employer contribution? Is it a final salary pension?
- Other benefits such as private health care for self or self and dependants, or discounts on products – how much, what on, and how much does this save the candidate?
- Car – what type.
- Car allowance – how much.
- Private mileage.
- Any benefits to spouse/partner.
- Holidays.
- Sick pay.
- Shares / share options – what do they have currently and what will happen to the shares when they leave?
There will be other considerations for those working offshore but these will not be comparable to locally-based jobs. They will only be relevant if your role is also offshore. These packages vary so you will need to know if theirs covers housing, car with driver, schooling for children, flights home, etc.
If you are using a recruitment consultant they should be able to provide you with the details of the candidate’s package and give you some indication of what they are looking for in terms of salary, bonuses, etc.
Basic salary
Basic salary is usually the most important component as you can’t pay your mortgage with pension contributions or other benefits, so most candidates will be looking for an increase in this.
The majority of people leave for an overall increase of around 20%, so try and structure your offer to cover this.
Bonuses and commissions
Bonuses and commissions are only worth what they pay out, so make sure you know how much the candidate has actually earned and not what they could have done if they had reached full bonus.
A candidate tells you that they can earn up to 30% of their salary in a company bonus scheme. However, this is based on company profitability and in the last two years the company has not been in profit and the bonus has not been paid at all.
Equally, make sure you can quantify your own bonus schemes. Have some examples of what individuals have earned, levels of company bonus, when they are paid and any qualifying periods, for example in some cases you may have to work a full year before you qualify for the company annual bonus whereas in others it will be paid pro rata.
Find out when the candidate’s bonuses and commissions are due. It can be a stumbling block if a candidate realises that they will not be paid a bonus if they leave before a certain date. This may mean that they will want to start later than anticipated. In the case of a more senior employee you may want to offer a ‘signing-on bonus’ if the candidate agrees to start when you need them to and to forego their bonus or commission.
If the candidate has been earning commission or bonuses which are not replicated in your offer, make sure you include something else to compensate.
Pension benefits
Candidates at all levels have become much more aware of the benefits of company pensions. If you are hiring someone with a company pension, especially if it is a final salary scheme, but your business does not have one or yours is not comparable, you may need to increase your offer on basic to cover this shortfall.
If you are offering a pension plan with employer contributions, make sure you have all the details.
Other benefits
You do not have to match the exact benefits the candidate has but you will need to equal them or surpass them in value in some way. Whatever your company benefits are, make sure you can explain and quantify them.
Medical insurance is one benefit that many candidates do not want to have to give up if they change jobs despite the fact that the monetary advantage to them after tax is quite small. For the same reason it is also a useful tool to add into your offer as the perceived value is high.
Do not forget to include company facilities such as a heavily subsidised canteen or a free in-house gym. Although these are not financial payments they will represent substantial savings if they are not available in the candidate’s current workplace.
Car or car allowance
Because of the tax implications company cars are no longer the benefit they used to be and many companies now opt for car allowances as they are easier to administer.
If you are recruiting a candidate who currently has a company car or allowance but you do not offer one, you will need to compensate in some other way and ideally on the basic.
Be aware that in some sectors company cars are still seen as status symbols and candidates may be disinclined to downgrade.
If you are offering a car allowance, especially to a candidate who has never had one, make sure they understand that this is taxed as part of their salary.
Benefits to spouse or partner
Some benefits will cover the spouse or partner of your new employee. Medical insurance may be for the employee only or may include dependants.
If you offer any benefits here make sure they are offered to all the relevant people and that you are not discriminating against single-sex couples, for example.
Holidays
The legal minimum holiday entitlement is now 5.6 times the usual working week so for a five-day week this works out to 28 days. This is including the eight statutory bank holidays.
In some sectors or for senior level roles it is more likely that the norm will be five weeks. If this is the case in your sector, then you should consider increasing your holiday entitlement as you will find that candidates are very loath to give up any holiday allowance and drop from five to four weeks’ holiday per annum.
Sick pay
The offer of sick pay schemes and the level of entitlements are rarely deal-breakers at the offer stage. It may be that there is a reticence among applicants to ask for too many details in case they sound as if they will be taking time off work.
You do not have to offer a company sick pay scheme but if you do, explain how this operates as it can be a significant benefit especially if the candidate is not in a scheme at present.
Share / share options
At senior levels shares or options to buy shares at a preferential rate can be a very attractive feature.
Once again make sure you have the details of your plan to hand, especially for more junior candidates who may not have had this option before.
If you are offering a job to someone who currently has shares in their present company, you need to ensure that they know the implications of leaving that business. In some cases they may lose their shares or at least not be able to cash them in, and this may need to be factored into your offer.
Re-location costs
If you are expecting a candidate to re-locate in order to take up your offer of employment you will need to offer some kind of re-location package. In larger companies this will be calculated by a set formula but if you are a smaller company or this is the first time you have had to re-locate someone then you will need to put one together.
Unless you are planning or see a need to re-locate on a regular basis then the easiest option is to deal with it on an individual basis. Find out what the individual plans to do. Will they keep their main home but rent locally, or will they want to sell up and buy again?
Re-locating is fraught with problems. There is a huge variance in the price of homes in different parts of the country, which may mean that for the price of a large four-bedroom family home in Yorkshire for example they will have to consider a much smaller apartment in central London. Also it is not always easy to sell a property and they may have to rent for some time.
The candidate should not be out of pocket by re-locating to join your company, so you could consider including the following in your re-location package:
- Removal costs.
- Legal fees for buying and / or selling their main property.
- Rental allowance for a set interim period between buying and selling their home.
- Interest payments on a bridging loan to facilitate the purchase of a property while trying to sell theirs.
- Stamp duty.
- An allowance for carpets and curtains.
Most companies offer a one-off payment, which is tax free up to a current limit of £8,000 and can only be used to cover these costs on production of relevant receipts or invoices. Any amounts over this limit will be classed as income and liable to tax and National Insurance contributions.
Many candidates will not want to re-locate completely, especially if they have children at school or their spouse or partner has a job they do not want to leave. You need to consider if this will work for your business and what, if any, re-location package you want to offer in these circumstances.
Review your offer
Finally, review your offer and make sure it is going to be tempting. It has got to be worth the candidate’s moving companies for.
When offering a different type of role, money may be less important, but few will accept without an increase in salary.
If you have a flexibility, consider if there is another way you could structure the offer to make it more interesting for this particular candidate. Could you include an additional benefit that they do not have currently?
Private health care is a relatively inexpensive perk but is considered highly attractive, as is an extra week’s holiday.
If you are putting these into an offer but they are not your company norm, be aware of how this could impact on other staff. If this is a new role or this is the only person at a certain level then this will not be a problem, but if they are part of a team you will have to offer these benefits to the others. People do talk about their salary packages.
How to make the offer
Verbal offer
In the first instance, make the offer verbally. Make sure you have all of the terms to hand so you can discuss them with the candidate. This will help you get immediate feedback and will alert you to any potential problems.
Candidates are likely to be at work, so ideally make the call out of hours or call and ask the candidate when it will be a good time to talk to them in detail. Ask for their immediate thoughts but allow them time to think the offer over. Agree a time by which they will get back to you with an answer.
If you are working with a recruitment consultant they will make the offer for you. It is often easier to make the offer through a third party, especially if there is likely to be some negotiation. However, if this becomes prolonged or complicated it might be preferable to cut out the middleman and speak directly to the candidate yourself. You can then gauge their feedback and it may enable you to structure the offer differently.
Once you have made the offer, make sure the offer letter is sent out immediately even if the candidate has not yet accepted. There is nothing more frustrating than being offered a job and then waiting days for the written confirmation.
If the candidate turns down your offer, make sure you find out why. There may be something in the offer that you can change to make it more interesting, or there may be something they have doubts over and you can put their mind at rest.
The offer letter
Candidates will expect to see your offer in writing, and if they are in employment they will want to agree the terms of the offer before they resign. You cannot expect anyone to resign with just a verbal offer. Also, it is a legal requirement to issue a written statement of employment within the first two months of the new employee starting work so it will be easier to do it at this stage.
The offer letter should include the following:
- the job title and the fact that you are offering them that job
- any pre-conditions which the offer is subject to, such as exam results
- any post conditions such as being subject to a satisfactory probation period
- salary and how it is paid, e.g. last working day of the month into a bank account
- bonuses and commission
- hours of work
- any other benefits
- pension arrangements
- holiday entitlement
- place of employment
- the starting date
- what action the candidate needs to take, e.g. returning a signed acceptance of the offer, agreement to references being taken up, any date constraints on acceptance
- request for bank details and national insurance number (you may want these sent to you or you may ask for them on the first day)
- instruction to bring their P45 if they have one on the first day.
The offer letter can form the main terms and conditions of employment but some companies will have detailed contracts of employment and it is good practice to send these out with the offer letter if possible.
If the contract is going to be issued later, then you should state that in your offer letter. You should also make it clear if the offer letter is going to form part of that contract as there are points in it that are not specifically covered in the main contract.
If you do not have contracts of employment it is worth taking legal advice and considering having one put together. In most cases one contract can cover all types and levels of job up to senior management, where there may be significant differences in the terms and conditions.
Remember that the employment contract is a legal one, and exists even before the candidate has commenced employment.
Start date
Once they have accepted, you need to agree a start date. This should fit in with their resignation period but it also needs to fit in with your plans. There may be a particular meeting you need them to attend or they may need to start when you are available or other key people are in the business. If they have a long notice period you can always ask if they can attend an important event before they start.
Most employers think immediately about having a new recruit start on a Monday. Sometimes a Wednesday or Thursday start may be more beneficial. It gives the new member of staff two or three days to settle in, then a weekend break ready to start fresh the following week.
Ask them to start a little later on their first morning. This allows whoever is doing the induction to get the rest of their day sorted out. This will be especially important if this is a line manager who needs to fit the induction around their normal working week and regular commitments.
Induction programme
Starting a new job is daunting for everyone, no matter how senior, and it can be especially nerve-racking for junior employees.
The aim of the induction programme is:
- to help new employees settle in as rapidly as possible
- to give a good impression of your company
- to make them feel welcome.
The quicker they settle in, the quicker they will be working at full capacity. Therefore consider it time well spent.
In larger companies the induction programmes will be devised and organised by the human resource team but they are equally important in smaller businesses.
If you are putting together an induction for the first time, remember you will be able to use it for other new starters but make sure you review it each time to ensure that the details have not changed. It can be conducted by the line manager or you could allocate this responsibility to another member of staff.
Give the new employee a copy of the induction programme, especially if it is over several days or involves training sessions.
Start by asking yourself what you would need to know if you were starting in your company for the first time.
General inductions for all staff should include some or all of the following:
- Paperwork / identity card. There are usually some formalities to complete on the first day. You will need bank details and national insurance numbers if you do not already have them, and P45 if available.
- Site orientation – in smaller companies show new employees around the whole site, or in larger companies familiarise them with the area they will be working in and around.
- Include where to leave their belongings and where the toilets are.
- Health and safety. If you are in an area where there are hazards such as chemicals, or on a building site, you should ask the new recruit to sign to say that you have given them health and safety training.
- Other people – introduce them to the other key people that they will be working with or need to interact with.
- Canteen or lunch arrangements. If you do not have a company canteen, explain what most people do for lunch and where it can be eaten.
- Telephone training. One of the most frustrating things about being in a new environment is not knowing how to answer the phone. Include training on how to answer a call, how to transfer, put on hold and if the calls are external what wording the company prefers staff to answer with.
- Emergency procedures. In all organisations this should include evacuation procedures, location of alarms, fire extinguishers and fire exits. In others this may be more extensive, such as in a hospital or other areas with responsibility for members of the public.
- There is also likely to be other training specific to their job which will need to take place over a period of days, including computer system, procedures and so on. Do not try to fit everything in a short period of time; people can only take in so much and you will end up spending time repeating things. Training can take place over the first week or even longer if necessary.
- The induction for more senior employees should include the above but they will need to spend more time meeting other people and understanding how their role relates, what their departments do, and this can also be covered over a few days.
Include a review at the end of the first day, the first week, and the first month in your induction programme. Do not assume everything is going well – make sure it is.
Another useful way of helping employees fit in is to have a ‘buddying’ system. This is where one person, usually from the new employee’s peer group, becomes a buddy to them to help them settle in and answer their questions for them. This can take the pressure off the line manager and the new person will feel comfortable asking their buddy more basic questions like where to get stationery from, rather than bothering their manager.
- Make sure you know exactly what their current or last salary package is.
- Structure your offer to make it tempting.
- Take their benefits package into account.
- Make the offer verbally but put it in writing immediately.
- Arrange a mutually convenient start date and make sure the relevant people will be on your premises.
- Devise an induction programme to help the new employee settle in as quickly as possible to enable them to start working to full capacity.