Job Offers Closing the Deal

With the unemployment rate hovering at a 29-year low at 4.1 percent (as ofOctober 31, 1999), hiring is serious business. First you have to find the rightemployees — which, these days, is like looking for a needle in a haystack.Then, once you’ve found prospective employees, you have to let them know whyyours is the best company to work for, over other choices they may have.Finally, once you’ve wowed them with the opportunity, you have to close thedeal. And you have to do it quickly or another employer will snap them up with abetter deal faster than you can say, “Show me the money.”

How do you close employment deals rapidly without sealing your doom by hiringthe wrong people in haste? Here are some pointers on how to make, and close,employment deals quickly and effectively.

You’ve spent weeks, maybe even months, finding the right people. You’vescreened, interviewed, tested and evaluated. Now it’s time to make an offer.Although they’re not often thought of as critical points in the hiringprocess, because human resources professionals and hiring managers usually feellike by the time they’re making an offer a candidate has already pretty muchcommitted to working for their firm.

Don’t be fooled.

The offer letter and the subsequent negotiating phase are extremely importantaspects to sewing up the right deal with the right employees. These stages canactually make or break the deal. If these steps are done incorrectly, acandidate may snub you for the employer up the street. It’s as important toknow what to say, as it is to know what not to say.

Linda Konstan, president of LMK Associates, an HR consulting firm based inDenver, says a lot of her clients recently have experienced the followingscenario: A company representative makes a verbal offer. The candidate accepts.The rep tells the candidate he or she will receive a written offer in the mail.But by the time the written offer arrives, the candidate often has alreadyaccepted an offer from another company.

It’s a situation of too many jobs, and too few people to fill them. It canbe a hiring nightmare. And the problem is: If you snooze, you lose.”Consequently, a lot of my clients are changing the methodology of offerletters,” says Konstan.

Now they have an offer letter template that allows them to just fill in theblanks with the right numbers and dates. They then fax the offer letterimmediately to the candidate with an expectation of having a faxed copy backfrom them within 24 hours, and a hard copy mailed back the same day as well.

Here’s what Peter Firla, director of human resources for InfiltratorSystems Inc. of Old Saybrook, Connecticut, keeps in mind when he’s writing anoffer letter: “[It’s important to] understand the values, expectationsand longer-range issues a candidate has, and to ensure those elements areincluded in the offer.”

“It’s critical to get as much information as possible about thecandidate’s present situation because you’re generally recruiting people whoare gainfully employed and not necessarily unhappy in their present roles,”says Joan Farrell, an independent HR consultant based in Ocean City, New Jersey.

Knowing not only how the 401(k) match works, but which fund families they caninvest in through their current employer versus what your firm offers, iscritical to knowing whether the candidate will view your plan as a gain or aloss. “Professional candidates are far more savvy than they used to be atcosting an entire package against their present situation instead of justexamining the base salary,” says Farrell.

That’s why it’s critical to know what your competition is offering, andto know what your candidate wants the most from your particular firm. You shouldalso know the relative cost of living in your company’s location if relocationis necessary. “They’ll look up that information on the Internet, so beatthem to it and consider the data in the offer,” adds Farrell. “Youwant to put together a fair package in terms of total value. Once you’ve donethat, you can fine-tune it to the candidate’s specific needs and wants,”she adds.

You should build in some negotiating room up front, so that if the candidatecomes back asking for some relatively minor enhancements, you can approve themon the spot. “This makes the firm look like it’s responsive andinterested in the person, not just in the ‘rules,’” says Farrell.”And on the subject of rules — one-size-fits-all doesn’t work in a tightlabor market. Consider offering some things at ‘better than plan’ with areturn to plan at some future date, particularly in such areas as vacation orbonus guarantees,” Farrell adds. “You want to make sure you don’tjeopardize the tax status of your qualified plans, but other than that, yourobjective is to ease the individual’s transition, not to play cop.”

In the offer letter, be sure to list anything you’ve already told thecandidate verbally. If you said you’d offer stock options, a stock-optionpackage should be included.

The rule is: Even if you neglect to put it in writing, your word can beconstrued as an implied promise. Candidates can later argue (in court if theyhave to) that anything you said during the “courting” phase of theemployment relationship is an implied and binding “contract.” Thatmeans, if you don’t mean to offer it as an enticement in the first place, makesure that no one in human resources or any of the hiring managers implies thatthere’s something that will be offered that eventually isn’t.

According to the Smart Workplace Practices newsletter (published by Employersof America in Mason City, Iowa) on the topic of job offers, the real dangers ofthe offer letter happen in one of these ways: either by being construed as acontract, by containing unintentional promises, or the letter conflicts withwhat the candidate was told during the interview.

“The frightening fact is this: Letters determined to contain acontractual agreement and letters containing no contractual agreement are forthe most part indistinguishable,” the Smart Workplace Practices newsletterstates. That’s why you should refer to the letter as a “statement ofunderstanding” rather than a letter of employment. This way, it sounds lesslegal and not so much like a contract.

Once you’ve got the letter written, how will you send it? There are as manyopinions as there are methods, but perhaps these guidelines will help.

One human resources professional at a media organization says she hase-mailed offers to candidates in a password-protected document. Either thepassword was hinted at in the e-mail or the candidate was told to call for thepassword. The document is sent in such a way so that the candidate can’tchange the content of the offer letter. Adds Bob Gately, president of GatelyConsulting based in Hopedale, Massachusetts: “All e-mail correspondence,such as offers, should be followed by written letters of confirmation until thecourts speak with one voice on the issue of e-mails as binding contracts.”

“If they’d like to fax back the agreement, fine,” says Konstan.”But, of course, a hard copy must be mailed in or delivered to me forbackup of signature.”

The offer letter, although it’s the first step in closing the deal, is notthe final say. There’s usually more to negotiate. It’s important to know howto bargain so each side wins.

An offer letter is the first step in formalizing an employment deal. The nextstep is negotiating the terms. While there’s a small percentage of candidateswho inevitably will accept an offer “as is,” the largest percentage ofprospective hires realize the letter on the table is only the first step incoming to an agreement.

Many candidates will negotiate — and negotiate with a vengeance. And in thistight employment market — considered an employees’ market — they often havethe upper hand.

Here are some ideas on how to negotiate for the best talent, while doling outyour firm’s valuable resources in moderation — and where you get the biggestbang for your buck.

Some human resources managers feel they have to make the first offer letter”perfect.” The big news is: It doesn’t have to be. Although theoffer letter certainly should state everything the company intends to offerinitially, it should always leave room for negotiation. So expect candidates atthis stage to ask for what they really want. Then be prepared to listencarefully. “It’s OK to make the offer a two-way conversation,” saysFirla. “Obviously the employer leads off with a good, solid offer, but askilled negotiator understands what others’ needs are and weaves those intothe [negotiation] process as much as possible.”

Any good negotiations will result in a win-win. “We need to makecandidates feel like they won, or at least got something extra as a result ofthe discussion. This is where a good relationship starts, or falters,”Firla adds.

“I tend to take a far more flexible approach these days, often puttingout feelers: (‘Our typical package would offer you x’) and then listeningcarefully for a response,” explains Ronnie Grabon, vice president, humanresources for jewelry retailer Carlyle & Co., based in Greensboro, NorthCarolina. With this strategy, he explains that sometimes the person accepts andsometimes he or she asks for more specific items such as a laptop (especially ifthe person’s a ‘techie’) or more time off. “I then work from theredepending on what we can do within guidelines. I generally have found this towork, but managers making these types of offers need to be carefully trained intheir limits and on how to negotiate.”

Grabon cautions that this strategy has backfired on occasion when workingwith an applicant who has a number in mind (especially a yearly salary figure)and has no interest in looking at all factors. “The basic principles hereare based upon the getting to ‘yes,’ by expanding the box onnegotiating,” says Grabon.

It’s important to remember that any negotiations that take place between aprospective employee and the hiring manager or HR, should be in the context ofmutual cooperation. After all, you’re hoping to bring the person on board. Theoffer negotiation process should set the tone for the future businessrelationship. If both sides are willing to give a little, it bodes well forfuture performance and business outcomes

So you’ve offered an applicant the job. You’ve negotiated the deal, andnow the employee is coming on board. It’s true that at this stage, you’vegotten through the toughest part. But now that you’ve committed a great dealof resources into hiring the new employee, you need to ensure that your company’sinvestment in its new hire pays off.

Employee orientation is an often neglected and widely underutilized tool thatcan help your company’s newest recruits get up to speed. After you’ve spentan enormous amount of time finding and wooing the right employees, you can’tafford to drop the ball on day one when your new people show up. This is when agood employee orientation program can help.

Savvy human resources managers are realizing that employee orientation is atraining opportunity that gets people headed in the right direction from thestart. And it’s not just an act of goodwill. It’s smart business.

According to the American Society for Training and Development (ASTD) basedin Alexandria, Virginia, companies that invest in training (such as goodorientation programs) do better over time in market-to-book ratios and in stockmarket values. However, in 1996, only two percent of training budgets weretypically allocated to new employee orientation programs. Understanding today’semployee orientation program goals can give you insight into why they’re soimportant to finalizing the deal with new employees.

The original purpose for the employee orientation was to “orient”new employees to the company so they would know where things were located andget a brief overview of company operations, procedures and policies. It wasoften short and sweet.

The goals of today’s employee orientation have changed dramatically. Thesedays, the employee orientation process can last from a few minutes to severalmonths, depending on how much the company values the opportunity to show theemployee what the company is all about. The purpose of an orientation programnow includes helping reduce the cost of a new hire by getting him or her up tospeed more quickly; reducing a new employee’s anxiety; reducing new hireturnover; and helping new employees develop realistic job expectations, andtherefore increase job satisfaction especially in the critical first few weeksand months on the job.

New employee orientation is more than a one-day event. In a recent survey byThe Training Clinic, based in Seal Beach, California, 25 percent of thecompanies with a formal program described it as poor or just adequate. The mostcommon complaints heard about new employee orientation are that it isoverwhelming — or just the opposite: Nothing happens and the new employee isleft to sink or swim.

“Successful new employee orientation is an enthusiastic welcome, full ofvariety and timely information,” says Jean Barbazette, president of TheTraining Clinic and author of “Successful New Employee Orientation: Assess,Plan, Conduct and Evaluate Your Program” (Pfeiffer & Co., 1994).”Too many programs,” she contends, “dedicate only one day toorientation-a combination of filling out forms and a tour of the facility.Orientation needs to be a process, not a one-day event.”

The result of an unplanned orientation is often a confused new employee whoisn’t very productive, will probably make mistakes, and is likely to leave theorganization within a year. With the high costs of turnover, and the ongoingtight labor market, that isn’t a pretty prospect.

Often employee orientation programs come in two types: Company overview andjob-specific. The overview orientation usually gives an employee the broaderscope of the company and its operations, and is usually conducted by humanresources.

An example of a typical overview orientation are sessions conducted regularlyby the employee development and training team at the University of California,Berkeley. On the university’s main campus, the team conducts employeeorientations once a month, with a campus orientation (that takes three and ahalf hours), and a benefits orientation (that takes two hours). The team feelsthat the time spent planning for the new employee’s first days and weeks onthe job will greatly increase the chance for a successful start.

The job-specific orientation is usually conducted by a new employee’ssupervisor or team leader. “I like systems where the new employee’smanager is the gatekeeper [for employee orientation.] After all, he or she wasthe one who [hired] the person and who has the greatest vested interest in theperson coming up to speed and feeling comfortable in the environment,” saysHR consultant Joan Farrell.

Other companies, such as Santa Clara, California-based Intel, approachemployee orientation as a competitive advantage. The orientation process for newIntel employees starts before day one with an orientation package that’smailed to the person’s home. HR believes that it’s important to get thebasics out of the way before they arrive, so the real work (a six-month”induction” process) can begin once people start there.

A newer addition to orientation programs is the emphasis companies areplacing on giving employees a clear sense of their values and mission. In fact,it’s so important at some organizations that the company’s CEO often showsup to introduce himself or herself to new employees and kicks off theorientation meeting.

“Yes, it’s expensive to convene people but this is the one opportunitya corporation has to instill corporate values, expectations, and so on, into newemployees,” says Firla. Adds Grabon of Carlyle & Co., “I feel thatorientation is best used as a way of helping employees understand where yourvalues are, how flexible you are, what policies are most important to have themfollow, such as diversity.”

This transmission of values is important for everyone who works at your firm,including part-time or contingent workers. “I thought the orientation wasvery good because the person who was leading the orientation was the departmentdirector. He knew his subject matter very well, and communicated the companypolicies and values, and how they wanted their customers treated,” saysCarole Gallagher, a sales professional who recently started working as afragrance model at a San Diego Nordstrom, a department store chain that’s wellknown for its high quality of customer service.

But whether it was by chance or by design, she was left to figure out someother basic information through her own initiative. “As to the exactspecifics of the job, that was going to be handled by the people I was going tobe working with directly. Unfortunately it wasn’t handled well, it was a busysale day and I felt very much on my own. But by being assertive, I got myquestions answered.”

HR can help plan the activities, and will still need to do the classicbenefits briefings. But someone from the hiring function should be the one totake the new person around for introductions and to learn the ‘lay of theland.’ Key managers can meet the new player and vice versa through a ‘treasurehunt’ process where the recruit sets up a series of meetings with individualsto garner specific information from them.

“The information should be primarily position-related but can include a‘treasure’ — something personal they need to discover about each of thepeople. It’s a great way to break the ice,” says Farrell.

Some firms are beginning to take care of some employee orientation activitiesto the employee’s desktop. For example, at FedEx, based in Memphis, much ofthe employee orientation and other training is on an interactive trainingplatform. But it’s supplemented with face-to-face time with the new employee’sleader, who covers local elements of the company, including the company’svalues, mission and so on. It’s really important that an employee isn’t justplopped in front of a computer and expected to figure it all out on their own.

“Orientation tends to be tedious and boring as it is,” says NancyProbst, a manager and organizational development consultant of managementadvisory services for Dixon Odom PLLC, a certified public accounting andmanagement advisory firm, based in High Point, North Carolina. “Yet this isthe first chance you have to make a good impression on your new employees. Doesn’tmatch up, does it? I believe orientation is as much a socialization process asit is a way to stuff people full of information they won’t remembertomorrow.”

Whether it was the company strategy, or whether it happened by chance, havingemployees figure out a certain amount of information themselves can be aproductive tactic.

Greet Street, a San Francisco-based, e-mail greeting firm, takes anout-of-the-box approach to orientation — literally. Instead of walking in theirfirst day to find their desk set up with everything they need, new hires walk into find everything in a box — their desk, their computer and even theirtelephone. The first thing workers have to do is set up all their own stuff.During the following two weeks, employees are expected to get to know everyoneelse in the company (all 30 of them) by attending meetings, observing andinteracting.

“Orientation is crucial and should bedone in person if possible,” says Firla. That’s a big key to orientation:having a balance between telling employees everything and letting them discoversome information on their own — and also creating a balance between deliveringdry information through reading material (either printed or online), and inperson.

“I still do orientation face-to-face on day one, but I consider it awork in progress for the first six months,” explains Barbara Sterling, HRdirector for Griffin Greenhouse & Nursery Supplies, based in Tewksbury,Massachusetts. Although she manages HR for seven offsite locations, Sterlingsays she always conducts a phone orientation, even if she can’t be there inperson. “In addition to necessary paperwork, I make sure new hires knowwhere the restroom, cafeteria, supply closet and MIS office are, not to mentionlocal restaurants, banks, walk-in clinics, dry cleaners, and places workersfrequent.”

After all, why would a company want to usher in someone they’ve just spenta significant amount of time interviewing and wooing, and then leave them out inthe cold to fend for themselves once they arrive on the job? With the vastnumber of opportunities people have these days to work independently, you haveto assume employees are coming to work with a group of people because that’stheir choice. Make them feel welcome. Inform them. Give them the tools they needto perform well. Then get out of their way so they can dazzle you. Only then canyou consider it a closed deal.

Workforce, December1999, Vol. 78, No. 12, pp. 56-64 — Subscribenow!