Recruiter Training: Qualifying Your Candidate’s Pay Rate
Money is a funny thing in our culture. It’s taboo to even talk about it. In general people don't go around sharing with other people how much money they make or what they paid for their house or car. Money is emotional and people have different feelings and attitudes toward money. But to be clear, in order to be a top performing recruiter, you must be comfortable discussing money. Recruiters have to learn to get comfortable discussing money and asking direct questions about a candidate’s pay rate and salary history because its a core component of the candidate interview process. This is the heart and soul of sales and recruiting (recruiting is selling). Recruiters who are afraid to ask the pointed questions or push back and challenge their candidate on salary expectations are often those who struggle with closing candidates. In this blog I’m going to share tips and best practices for qualifying your candidate’s pay rate and training exercises you can adopt to improve your pay rate qualifying skills.
Why Establishing Candidate Pay Rate History is Important
The ability to establish a pay (salary) rate that is fair and equitable for the candidate, the client and yes, you the recruiter, is a key skill set that recruiters must learn to ensure:
- Candidates don’t get overpaid or underpaid
- Client’s don’t over pay
- Recruiters get paid fairly
- There is room for candidates to receive increases upon promotion
Many recruiters struggle with this however by simply paying the candidate whatever he or she wants or “desires” to be paid. They simply ask the candidate “what are you looking to make,” and the conversation ends there. The other pitfall is many recruiters establish wishy-washy pay rate terms. “Wishy-washy” terms can be defined as unclear expectations on EXACTLY what the agreed upon pay rate is for the candidate. It happens when recruiters fail to confirm a specific pay rate with their candidate AND fail to ask their candidates to repeat back to them what the agreed upon pay is.
An example of wishy-washy terms is when a recruiter asks a candidate, “What are you looking to make?” and the candidate replies--without giving it much thought--“$65 an hour would be great.” The recruiter replies, “OK, great, I think I can do that.” The recruiter is failing to understand the candidate’s pay rate history and whether or not $65/hour is in alignment with his or her pay history. It’s also not clear if they have come to an official agreement of $65 per hour as a pay rate and that the candidate will be submitted to the client at that rate. Just because the candidate said, “$65 an hour would be great,” doesn’t mean they are verbally agreeing to it.
Another example is when candidate responds by saying, “I’m looking to make somewhere between $50.00 and $60.00.” In this scenario, the recruiter presents the candidate to the client at $50.00, and the client offers the candidate the job at that rate, then the recruiter goes back to the candidate to extend the offer, but the candidate says, “I know I said I wanted to be paid between $50.00 and $60.00, but I really meant $60.00.” You’re now stuck in a situation where you can’t deliver the candidate at the agreed upon rate, which means you either have to:
- Absorb the additional costs, which come out of your commission check
- Ask your client for money, which they will not like nor will your sales rep or
- Try to renegotiate with your candidate. The last thing you want to do is to have to renegotiate with your candidate at this stage of the cycle.
A third common scenario where recruiters get hung up with wishy-wash pay rate terms is email. Typically after an interview, the recruiter will send the candidate an email highlighting the details of the conversation. In the email, the recruiter will state what the job pays. The mistake here is the recruiter thinks by simply telling the candidate what the job pays that they have reached an agreement with the candidate. Simply telling a candidate what a job pays is NOT coming to an agreement on the pay rate.
It is extremely important that the recruiter establishes and maintains a specific salary/pay rate expectation with their candidates throughout the entire recruiting lifecycle. In order to properly establish a fair pay rate, the recruiter must establish a pay rate/salary history with the candidate dating back three jobs or projects. The purpose is to establish a timeline that demonstrates how much a candidate was paid, and for how long and at what point in time he or she received a increase in pay. Establishing a salary or pay rate history also allows the recruiter to:
- Understand when, how much and how often a candidate received pay increases or decreases. This will allow the recruiter to understand if the candidate has historically been paid a fair market value or if he or she has been under or overpaid
- Offer a fair pay rate or salary to the candidate without overpaying the candidate and/or overcharging the customer (“leaving money on the table”). You don’t want to present your client with “candidate A” at a price point of $60/hour and “candidate B” at $55/hour and have the client tell you that candidate B is more qualified than candidate A. Why is candidate A more expensive? This won’t happen if you take the time to understand your candidate’s pay rate history.
- Better understand market rates for different skill sets and experience. This historical salary data is invaluable information for educating candidates and clients. This data can also serve as valuable information should we get into a salary negotiation with the candidate or client. The recruiter can use this data to educate the client and the candidate on market rates and value.
Tips and Best Practices for Qualifying Your Candidate’s Pay Rate and Training Exercises
Because money is a very personal and an emotional topic, and candidates tend to get uncomfortable when you ask them about their salary history, I suggest you use the following disarming technique. Before you ask your candidate about salary history, you should first ask for permission to discuss money. For example, you can say. “May I ask you a salary related question?” Doing this takes a little bit of the sting out of the questions that are to follow because you have prefaced your salary history questions by asking permission to discuss money. It usually gets a chuckle from people as well, which can be a good ice breaker. You could also preface the question by saying “to ensure I don’t waste your time, and only consider you for opportunities that are a fit for you financially, may I ask you a few money related questions?”
Never offer your pay rate first to the candidate. Get salary/pay rate history first. If a candidate persists for a pay rate from you, then say the client is willing to pay a fair and equitable rate based on the talent and experience level (of the candidate). But tell the candidate you need to establish a pay rate/salary history in order to understand how to best position the candidate and negotiate on his or her behalf.
Starting with the current or most recent job/project, the recruiter must uncover the following:
- The starting pay rate or salary for the current
- The ending pay rate or salary when the candidate left the position
- Does this rate include any sort of bonus?
- How much and how often was the bonus paid out?
- For Direct Hire/Perm Placement: What benefits did the candidate receive? How much is/was the candidate paying for medical/healthcare insurance each month?
Repeat the pay rate or salary history questions for the second and third most recent job or project on the candidate’s resume.
Finally, as a general rule, candidates who only care about the pay or salary rate are often difficult and challenging to place because they’re simply chasing the opportunity that pays the most, and there will always be another opportunity that will pay more than your opportunity. These candidates often can’t be trusted because they withhold information and are not transparent. They’re also usually the candidates that walk off assignments before completion to take a new project at a higher rate. Don’t underpay your consultants, but be mindful of this when you come across candidates who only care about the pay rate of the job.
Recruiter Training: To improve your pay rate and salary history interview questioning and skills, consider the following:
- Write down the top five objections or “push backs” you hear from candidates when it comes to discussing money and qualifying pay rate or salary. Write down two credible rebuttals for each.
- Next, grab your manager or co-worker and practice role playing the screening questions you will ask in your candidate interview including your rebuttals and how you will address each objection or candidate “push back.”
Repeat these exercises daily until you become “conversation ready” and are confident navigating any pay rate or salary related scenario without having to consciously think about what it is you will say or do. Your goal is to go from unconsciously incompetent to unconsciously competent. You can learn more about our methodology and training approach here but what has your approach been to qualifying your candidates pay rate? What approaches do you find work most effectively? Let's start a conversation in the comments section below.
About Dan Fisher
Dan Fisher is founder and owner of Menemsha Group, a provider of sales enablement solutions dedicated to helping IT staffing firms improve win rates, shorten their sales cycle, and increase revenue per sales rep. Since launching Menemsha Group in 2008, Dan has consulted with over 200 IT staffing firms and has invested over 5000 hours coaching IT staffing sales reps. He’s authored is his own proprietary sales methodology and has previously spoken at Staffing World, TechServe Alliance and Bullhorn Live 2012. Prior to launching Menemsha Group, Dan spent 16 years in the IT industry running local, regional and national sales teams. Dan worked for Kelly Services, Oracle Corporation and Alliance Consulting. Dan currently resides in Boston, Ma.