The Anatomy of Attempting to Close the “Unclosable” Candidate

(In the following personal melodrama, the names and places have been changed to protect the innocent—and guilty!)

One of the beauties of working a desk as a trainer is that you get to practice what you preach. The following started with an assignment I was given by a recruiting company that I do work for on an independent contractor basis. I received the JO from one of the company principals, Keith Padgett, on January 27th, 2006. Keith wrote up the details and cleared the fee that he thought the position warranted. This was a new client. The recruiting was long and agonizing.

The following is a story about a slow client company and an even slower candidate. Because of the situations I faced at certain times, I had to implement four of the techniques that I teach recruiters when I am in training mode. The four Closes that I relied on, in order, in attempting to put this deal together were: The Multiple of Compensation Close (combined with The Reduce To The Ridiculous Close); The Counteroffer Close; the Investment Differential Close; and finally, the admonition on decision making that was given to us in the Ben Franklin Balance Sheet Close:

This is how I handled it

First a little background. My client company, IDA, is a very large east coast based office furnishings dealership. They wanted me to recruit a Senior Project Manager. Mike Foote is the Hiring Manager (HM).

My candidate, Ellen Woodward, worked for one of the competition. She was a typical recruit. She was happy, well-appreciated, making good money and currently working and I was able to entice her to consider a new and better opportunity. Ellen was movable because her current company’s assets were being taken over by a third company (Chaco) and she wasn’t sure that Chaco would retain her services. So at this point everything is moving along well.

I officially presented Ellen to IDA on May 24th, 2006.

After IDA concluded their interview sequence, they decided that they wanted to make Ellen an offer. At this point, the problem of what to offer raised its ugly head. This is the Email I sent to Mike, the Hiring Manager, on June 28th, 2006, to help him with his dilemma:

Hi Mike,

Not to confuse the offer issue concerning Ellen Woodward any further, but here are some more numbers for you to ponder.

1. Here is a way to set Ellen’s value. It will also work with your other employees. There are three different methods to estimate the worth of an employee to their company: The Multiple of Compensation Method; The Contribution to Profits Method; and The Cost of Replacement Method. Information on all three methods is readily available on the Internet. The next paragraph is based on the first Method.

Based on studies conducted by the top business graduate schools in the US, Ellen’s value to IDA is recommended to be set at 5 times her salary. So, for instance, if you pay Ellen a salary of $65K, then the value that she will bring to IDA is $325K per year. My service charge, on the other hand, was set by Keith Padgett, in this case at only $10,500 ($3,500 of which has already been paid leaving a balance of only $7K). Or, to look at it another way, our fee is only 3.2% of this position’s value to IDA, and, that’s only for the 1st year! You benefit from the $325K value year after year after year. We get our fee only one time. When you look at our fee structure in this way, we are definitely a bargain. Conversely, taking the value of this position at $325K per year and realizing that there are 2080 work hours in a year, you are hemorrhaging $156.25 per hour for each hour that this position remains vacant. Think about it! That’s $1,250 per workday, $6,250 per workweek, etc. Two (2) weeks with this position open will exceed my fee, and you’ll still have that vacancy.

2. Considering the possibilities of hiring Ellen at $62,500 versus $65,000, we come up with a difference of $2,500. This $2,500 amortized over the first year of employment equals $1.20 per hour. Amortized over the first 5 years of employment (average tenure in the USA), you have 24 cents per hour. I believe that you could lock her up with that extra 24 cents.

That’s about it for now Mike. Just some more food for thought. I’d hate to have you lose Ellen at the 11th hour over really small amounts of money. All of us (you, Ahmed, Celine, me) feel that she is a ‘keeper’. And, if you treat her fairly, I don’t think she will ever leave you. She wants her next job to be her last job. Ellen truly is someone who will make you look good in the eyes of the owners.

Best Regards,

Bob

This seemed to work and Mike relented and made the official offer to Ellen at $65K.

In the meantime, Chaco made her an offer of $62K—well above her current salary of $55K. And here is where everything started moving in super slow motion.

My first sign of concern was that Ellen suggested she could use the IDA offer as a lever to negotiate with Chaco. I told her that that would not be wise because that was tantamount to accepting a counteroffer since Chaco was basically taking the place of her original company. I then sent her the following email, adding that, in my opinion, she would be gone voluntarily in 6 months or involuntarily in 12 months. This is the email I sent to Ellen on August 8th, 2006

Hi again Ellen,

When you mentioned that you might go back to Chaco for a counteroffer, I thought I’d better send you the attached article. Since I train recruiters, as well as do recruiting, I put together this article for recruiters to send to their candidates. The reason the article is so important is that we have found that, when a candidate accepts a ‘counter’, statistics show us that they will be gone from the company who offered the counter within 6 months (voluntary) or 12 months (involuntary). I thought this was important for you to know since you want this to be your last position change.

Hope you will come to your decision shortly. I know Mike is very anxious.

I send my best.

Counteroffers

Since counteroffers can create confusion and remorse, you should understand what’s being asked of you. Counteroffers are typically made in conjunction with some form of flattery. For example:

• You’re too valuable, we need you.
• You can’t desert the team/your friends and leave them hanging.
• We were just about to give you a promotion/raise, and it was confidential until now.
• What did they offer, why are you leaving, and what do you need to stay?
• Why would you work for that company?
• The President/CEO wants to meet with you before you make your final decision.

Counteroffers usually take the form of:
• more money
• a promotion/more responsibility
• a modified reporting structure
• promises or future considerations
• disparaging remarks about the new company or job
• guilt trips

It’s natural to want to believe these appeals. But think about it: If you were worth “X” yesterday, why are they suddenly willing to pay you “X + Y” today, when you weren’t expecting a raise for some time?

The Reality
• Employers don’t like to be “fired.” Your boss is likely concerned that he’ll look bad, and/or that his career may suffer. It’s never a good time for someone to quit, and it may prove time-consuming and costly to replace you, especially considering recruitment and relocation expenses. In addition, they know that statistically you are almost certain to leave them in the future.

• It’s much cheaper and easier to keep you, even at a slightly higher salary. And it would be better to fire you later – on the company’s time frame. Bosses who truly care about their employees will wish them the best, offer to act as a reference, and communicate their disappointment.

• Having once demonstrated your “lack of loyalty” by having considered looking at another job opportunity, you will lose your status as a “team player” and your place in the “inner circle.”

• You will always be suspected of being on a job interview whenever you are absent from work for any reason.

• In addition, numerous studies have shown that the basic reasons for wanting to change jobs in the first place will nearly always resurface. Changes made as the result of a counteroffer rarely last beyond the short-term, no matter how many promises are made.

• When making your decision, look at your current job and the new position as if you were unemployed. Which opportunity holds the most real potential? Probably the new one, or you wouldn’t have pursued and accepted it in the first place. If you have made the decision to take another job elsewhere you should maintain a firm and final position.

Ten Reasons NOT to Accept a Counteroffer

1. What type of company do you work for if you have to threaten to resign before they give you what you are worth?

2. From where is the money for the counteroffer coming? Is it your next raise, early? (All companies have strict wage and salary guidelines that must be followed).

3. Your company will immediately start looking for a new person at a lower salary.

4. You have now made your employer aware that you are unhappy. From this day on, your loyalty will always be in question.

5. When promotion time comes around, your employer will remember who was loyal, and who wasn’t.

6. When times get tough, your employer will begin the cutback with you.

7. The same circumstances that now cause you to consider a change will repeat themselves in the future, even if you accept a counteroffer.

8. Statistics show that if you accept a counteroffer, the probability of voluntarily leaving in six months or being let go within one year is extremely high.

9. Accepting a counteroffer is an insult to your intelligence and a blow to your personal pride, knowing that you were bought.

10. Once the word gets out, the relationship that you now enjoy with your co-workers will never be the same. You will lose the personal satisfaction of peer group acceptance.

(Source: Bob Marshall, trainer)

This seemed to get Ellen back on track, but I still couldn’t move her to make a decision. And since the two offers were pretty close to one another, I decided to use the Investment Differential presentation to show her that she was not throwing away $3,000 per year, but $5,259. And over 10 years, all things being equal, she actually stood to lose more that $52,593. I let a week pass and then I sent this chart over in my second email on August 14th, 2006:

Hi Ellen,

One other thing I should put in front of you is the difference, over time, between the offer at Chaco and the offer at IDA. This is based on both offering you a 10% salary increase every year. With this in mind, based on the Chaco salary of 62K, at the end of ten years you will have earned a total of $1,086,933. Based upon the new starting salary of 65K at IDA, you will earn $1,139,526. Moving to IDA will give you an additional $52,593 (averaging over $5,259 per year) in income over Chaco. This is the real differential which amounts to a sizeable ‘return on investment’.

Here’s how the numbers work:

The Investment Differential

Article Continues Below

Year % Raise Chaco IDA Differential
$62,000 $65,000 $3,000

1 10% $68,200 $71,500 $3,300
2 10% $75,020 $78,650 $3,630
3 10% $82,522 $86,515 $3,993
4 10% $90,774 $95,167 $4,393
5 10% $99,852 $104,683 $4,831
6 10% $109,837 $115,151 $5,314
7 10% $120,820 $126,667 $5,847
8 10% $132,903 $139,333 $6,430
9 10% $146,193 $153,267 $7,074
10 10% $160,812 $168,593 $7,781

Total $1,086,933 $1,139,526 $52,593

Ellen agreed and said that it was coincidental that I had sent this over since she had just been working on her own 5 year plan. So, at this moment, we were back on the same page. Then nothing, just a waiting game supposedly based on the fact that Chaco had not forwarded their benefit package to Ellen—their HM being on vacation.

Now things are starting to get tense. The company is making grumblings that if the offer is not accepted fairly quickly, it will be withdrawn. So, I’m at the final junction in the road—short of a Take Away close. I decide to use The Ben Franklin Balance Sheet close and sent Ellen the following email on August 23rd, 2006:

Hi Ellen,

In the interest of helping you to make a decision before your IDA offer is taken off of the table, why don’t we consider how Ben Franklin made his decisions.

Most of us consider old Ben to be one of our greatest statesmen. He lived from 1706 to 1790. Between 1733 and 1758 he published Poor Richard’s Almanack. In the Almanac, he explained how he made decisions when faced with a lot of data. He said that, “all Reasons, pro and con, are not present to the mind at the same time… As a result, our minds are like a pendulum swinging back and forth, swayed by whichever aspect of the decision seems to be primary at the time without being able to arrive at a solution.”

To help solve this dilemma, he would take a sheet of paper and make a line down the middle. Then he would put all of the reasons for doing something on the left and all of the reasons for not doing something on the right. Then he would add up the columns and the bigger sum won.

Let’s try this with your situation—as much as I know about it. I will construct the chart as if I were you:

PRO
1. IDA is the larger company

2. IDA provides greater growth opportunities in the future

3. The offer is larger – much larger than my original company and also larger than Chaco’s offer and they know me

4. Over a 10 year period with similar raises, I will be making $52,593 MORE with IDA

5. My goal of being at $100K by the time I am 50 is more realistic with IDA

6. Mike Foote agrees that my 5 year plan is “do-able”

7. Benefit packages are similar

8. Company location is closer to my new house in Hagerstown, MD—about 10 miles—so I’ll save gas and be closer to my mother when she needs me

9. IDA is doing ‘cabling’ which I am familiar with

10. Everyone I interviewed with liked me and I liked everyone

11. IDA is the largest Knoll and Kimball dealer in the US

12. Learning the new systems will be provided for me

13. Mike Foote has been very patient with me during my long decision making process

14. Since Chaco’s and my original company have been so close lately, taking Chaco’s offer is like taking a counteroffer from my original company which means it is statistically likely that I will be gone in 6 months voluntarily or 12 months involuntarily

15. A mid-September start date is fine with IDA

16. If I don’t make a decision soon, I will lose this offer

CON

1. I will look like a bad guy

So, that’s 16 PRO and 1 CON. I think if you will allow him, Ben Franklin just made your decision for you.

Warmest Regards,

Bob

Postscript: The story I sent has a happy ending. “Ellen” just accepted the position with a 10/3/06 or before start date. Not all melodramas end poorly!

Bob Marshall, CPC, CIPC started in the search business in 1980 and became Western Regional Manager for over 60 Management Recruiters Intl. offices in 1984. In 1986 he founded The Bob Marshall Group, International, training recruiters across the nation as well as the United Kingdom, Malta, and Cyprus. In 1996, he returned to working a desk full time and continues to train recruiters. To learn more about his activities and descriptions of his products and services, contact him directly at: 770-898-5550 or espro@bellsouth.net or www.TheMarshallPlan.org.

Bob Marshall began his recruiting career in 1980 when he joined MR Reno, NV. In 1986 he founded The Bob Marshall Group, International, training recruiters across the nation as well as in the United Kingdom, Malta, and Cyprus. In 1996, he returned to working a desk full-time, while continuing to train recruiters. In late 2011, Bob will begin licensing his proven training system in selected U.S. and international territories.

To learn more about his activities and descriptions of his products and services (including the Double Production-guaranteed program), contact him directly at: 770-898-5550, www.TheMarshallPlan.org, or bob@themarshallplan.org.

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