At this stage, you have carefully selected the candidate you want to hire for your position. Now you need to craft an offer that meets both party’s needs, i.e. yours as well as the candidate’s. The easiest part of the offer is often the money.
The compensation you offer will need to be a compromise based on 4 factors:
- Internal equity with similar positions in your own firm;
- Industry averages for similar positions generally;
- The current compensation of your chosen candidate;
- The “premium” the candidate places on your opportunity, based on their assessment of the challenges, responsibilities, travel, risk etc. associated with it.
Other factors that are important to the candidate (opportunities for learning, career growth potential, lifestyle factors, travel requirements, corporate culture and team environment, benefits, vacation, RRSP/pension/stock option plans, etc.) should be discussed and agreed upon, even if some of them will not appear in the actual offer letter.
The Offer Letter
The offer letter should clearly outline the major elements of the offer, including title, start date, compensation, and benefits. It may have attachments if they form part of the employment contract. For instance, a job description and company policies such as computer/software/internet use, harassment etc. which form part of the employment contract should be signed off as part of the offer, and not left as paperwork to be completed on Day 1; otherwise they could be deemed to be legally unenforceable if no additional consideration is offered.
The offer letter should also have an expiry date, and not be open ended. The candidate should have an opportunity to review the offer, and perhaps seek legal input; a few days should be sufficient. If a candidate cannot make a sound business decision in this time then you should have concerns about motivation or genuine interest.
Seem complicated? Remember that you are striking a legal contract here, so do not hesitate to seek legal advice. As always, help is just a phone call away.