Hiring Senior Talent
I was recently coaching a friend through their search for a new job. He is a professional service exec looking for a VP role in a small tech company. He had narrowed his choice down to two companies and was meeting with the CEO of his #1 choice. He had met the entire management team a number of times, liked them, and was excited by the company's space and their prospects for success. The company really wanted to hire him and he should have been an easy candidate to close and bring on board.
Instead, here is what occurred. During the interview process, no one had asked about him compensation at his previous company. If you are leading a start-up business, you know cash is king. As a result, compensation packages can vary significantly for seemingly similar jobs. This is often based on the size of the company, what they can afford, how much non-monetary value they get from "how cool is their technology", the prospects of rapid growth, the potential for future equity pay-outs and the culture of the company. But let's face it, free bagels on Thursday and a Friday afternoon beer fridge can only count for so much.
The verbal offer he received was a base salary that was 2/3's of his last job position and slightly less than 2/3's of the offer from his second choice company. The bonus was also less than the competing offer and was not clearly articulated in terms of targets and probability of success. On the positive side, the offer did include equity while the other offer did not. Unfortunately, the CEO didn't sell the clear value of the equity in terms of likely exit scenarios and timelines so it was impossible for the candidate to assess when, or if ever, the equity would pay out and if so, how much the payout might be.
While money is an important financial component of any employment decision, it is also a surrogate for expressing how critical a position is to an organization. In this case, because the offer was below expectations and not properly sold, it deflated his enthusiasm for the job and raised three questions in his mind:
- Was this job really as senior and important to the organization as he thought it was?
- What truly was their expectation of him as a senior member of the management team or had he mis-read this opportunity?
- Was this a job where he can make a difference and affect the outcome of the company and if so, how does he get rewarded for that?
He ended up taking the other higher offer, not for the money but because of these concerns. This leads me to ask whether you are ready to successfully hire your next senior exec?
In my next post, I will provide some tips on closing great candidates.