Hiring is ultra competitive, so timing is key. You must know exactly when and how to hire the right candidate for the job.
Why is bad timing a problem when hiring a new employee for a small business? Top candidates are interviewing with multiple companies and probably getting other offers. Wait even an hour too long and another boss could snag your dream employee.
In that case, you might have to make an offer to your second or third choice. If they decline, you’ll be back to square one. A second search will cost you more time, effort and money.
Hiring can be especially challenging for small businesses, which often can’t compete with big companies purely on salaries and benefits. In fact, 35 percent of small businesses have openings they can’t fill, according to an April 2018 report on small business economic trends by the National Federation of Independent Business (NFIB).
But that doesn’t mean you should rush the hiring process. There’s a big difference between acting swiftly to hire the right candidate and making a hasty hire just to fill a role. A bad hire can cost your small business. Estimates vary, but the mistake could cost you one-third of the annual salary for the position. The total you spend on a bad hire includes: placing ads, screening resumes, interviewing, conducting drug tests and background checks, onboarding, training, and paying the wrong person for as long as they’re on the job.
On the other hand, the right hire can help profits soar. One positive, motivated employee can have a ripple effect on other employees and your company culture. A good employee helps keep your customers happy and is likely to stay longer, reducing your costs for future job searches, onboarding and training. Finally, a stellar employee will take initiative and might just come up with a brilliant idea for your next product, service or process.
So, if you’re 100 percent sure you’ve found the right candidate, make the offer on the same day as their final interview. If that’s not possible, call the following day.
How to Make a Job Offer
You’ve finally found your ideal candidate, and you know they’re a perfect fit for the job. Now, how do you make a job offer?
Rule number one: Pick up the phone. A phone call has several big advantages over an email or letter. First, a call is the quickest and most direct way to extend an offer. It eliminates the possibility of postal snafus and emails going to spam folders. Second, a phone conversation lets you personally connect with the candidate and address any doubts or questions. Third, a call will give you insight into how the candidate really feels about taking the job.
Before you call, it’s a good idea to write out a short script outlining the items you want to discuss. This will help you to relax during the call and ensure that you don’t leave out any important details.
What should you say in the call? First, greet the candidate warmly and ask if they have a few minutes to talk. Then delve into the details. Here are items you should touch on in an offer phone call:
1. Reasons for the offer — Start out by outlining two or three specifics about why you think the candidate is an ideal fit for the job. Highlight the specific skills and experience that impressed you.
2. Benefits — Briefly describe the benefits package. Play up any benefits that the candidate expressed during the interview process. And mention any perks that make your small business unique, like work-from-home options or free lunches on Fridays.
3. Salary — Tell the candidate how much the position pays. When setting compensation, which should happen well before you make the offer, it’s important to note that pay should be at least 10 percent more than the candidate’s current salary. Don’t forget to include any bonuses.
4. Start time — Tell the candidate when you want them to begin work and whether there’s flexibility with the start date. Ideally the candidate should have enough cushion to give plenty of notice to their current boss.
5. Candidate questions — Ask if the candidate has any questions. This is a good opportunity to address any issues that make the candidate unsure about taking the job. Answer questions honestly but also play up the positive aspects of working for your small business. Why do you think you’re a great employer? Sell the opportunity.
6. Next steps — If the candidate accepts, tell them how excited you are to have them join your team. Outline next steps, such as pre-employment screenings or paperwork. But what if the candidate says they need time to think over the offer? Ask how much time they want and set a decision deadline. Also remind the candidate again of the benefits of working for your small business. In either case, promise to send an offer letter right away.
Tip: Your attitude matters. When you call to make the offer, it’s important to be enthusiastic, positive and warm. Smile before you dial, and use positive words like “happy,” “excited” and “delighted.” Remember, the offer call sets the tone for the beginning of your working relationship and may even make the candidate more likely to say yes to the job.
What if a Candidate Refuses a Job Offer?
What if you make the job offer and your dream candidate says no? All is not lost. Depending on the situation, you might be able to turn “no” into an enthusiastic “yes.” Here’s what to say if the candidate refuses the offer for the following reasons:
Pay is too low — If you have room to negotiate, ask what the candidate is seeking in terms of pay. Consider making a counteroffer. If you can’t increase pay, talk about how the job will enhance their career and may lead to advancement opportunities and higher earnings in the future. A 2017 recruitment study found that, while a competitive compensation package was most attractive to the highest number of prospective hires (46 percent), advancement opportunities came in second (32 percent). Training and continuing education were also important to many (26 percent) job seekers. If you offer training, including on-the-job training, tout that benefit.
Benefits are inadequate — As a small business, you might not be able to compete head-to-head with large employers on benefits like health insurance. But remind the candidate of any perks you do offer. Do you have Friday morning yoga classes? Healthy snacks in the break room? Flexible scheduling? Casual dress (and not just on Fridays)? Play up these benefits. In that recruiting study cited above, prospective employees also were drawn to “soft” benefits. For example, many job seekers sought: a collaborative environment (29 percent), an emphasis on work-life balance (27 percent), a fun, engaging company culture (25 percent) and work-from-home options (17 percent).
Took a job with another company — You probably don’t want to try to persuade a candidate to renege on a promise they made to another employer. So, congratulate them on their new job and wish them well in their new role. Tell them you really enjoyed getting to know them, had really hoped to work with them and would love to connect on LinkedIn. Keep in mind that switching jobs is fairly common. By nurturing the relationship, keeping in touch and showing patience, you increase the chances of working together in the future.
Considering another offer — What if they haven’t accepted another job yet and are simply weighing an offer? In this case, it’s not too late. Ask the candidate about the other role and why it’s attractive. Use this information to favorably compare your small business and role to the other job. Recall the desires the candidate expressed during the interview process and explain the advantages of working for you through that lens. This is your chance to use your powers of persuasion and also to show that you’d be an excellent boss who listens and considers employee needs.
Not happy with job description —Get details on specifically what they don’t like about the job description. Maybe there’s a misunderstanding you could clear up about the role, or maybe they truly aren’t a fit for the position. (Ideally, though, this is something both of you would have discovered earlier in the interview process.) Or, maybe there’s a small part of the role that could be shifted to another employee to accommodate the right candidate’s talents and desires.
It’s important to act quickly and offer the job to the right candidate at the right time. But it’s also crucial to avoid offering a job to the wrong person due to impatience.
When you do find that ideal candidate, make a job offer by phone and be ready for a wide range of responses. You might need to pull out your powers of persuasion to convince a candidate to take the job with your small business over another employer.
Keep in mind that senior candidates for higher level positions might need more time to negotiate and consider whether they want the position. In this case, the process can last weeks and might even include an attorney review of the contract. Just be patient and give the candidate time to decide.
Now that you’ve learned the ins and outs of when to hire, and how to make the offer, you’ll have a much better chance to beat other employers to the punch and add the perfect new employee to your team.