I’ve written before about how lowball offers (among other things) can contribute to turndowns and what agency recruiters can do about it. I continue to be amazed by the stories I hear from NPA members about their clients who make below-market offers in today’s candidate-short recruiting environment. Today, I read another great blog about how lowball offers are harmful to clients in the long run. If you are in need of some recruiting resources to help educate your clients on why it’s a bad idea to make below-market offers, keep reading:
The employee will keep looking. While it’s true that some employees have an inflated sense of their own “worth,” it’s also true that many employees DO have a good grasp of the “going rate” for the kind of work they do. This is especially true of high-demand candidates who are receiving multiple offers. Hiring employees at below-market rates ensures they will keep looking, and will leave as soon they get a fair-market offer. This is not a strategy for long-term success.
The client won’t attract top talent. I believe, and have heard from recruiters, that there are still plenty of clients who think they can “get away with” lowball offers on the mistaken assumption that there are plenty of unemployed candidates willing to accept low pay. It’s just not true. Good candidates are scarce, and they are already working and/or have other offers on the table. They are NOT going to accept offers for less pay than they are already making (COL difference aside). Candidates who will accept low offers may not be the best candidates.
Employees don’t feel valued. Employees who accept an offer at 80% of their most recent pay may ultimately only give you 80% effort. They may feel the employer doesn’t value them, doesn’t view the employee as being “worth it.” This can have a devastating effect on morale and can quickly spiral downward into an entire team only performing at 80% effort. Obviously there are clients who legitimately can’t afford to pay premium salaries; what recruiting resources do you use to help them ‘sweeten the deal’ in non-salary ways?
Most recruiters I know are really struggling to find the top-quality candidates their clients are seeking. It doesn’t appear this talent gap will disappear anytime soon. Lowball offers may offer short-term cost savings for your client, but the long-term risks are real, and costly. Successful companies don’t want a “revolving door” of employee turnover. Paying employees at fair-market rates will help attract and keep the best talent, which is important for long-term business success. How often do you see lowball offers from your clients? What recruiting resources do you use to overcome them?
