I often say that when recruiting talent, I’d rather figure out how to pay a star performer $200,000 a year, than get a “perceived bargain” for $50,000 a year. You usually get what you pay for. While many may not agree, our track record would suggest the high-end performer becomes the true bargain. Not unlike professional athletes, top recruits typically make top pay. They also make a much greater overall contribution to the organization.
Recruiting top talent requires a different approach. While initial compensation is critical, we also need to think through the long-term strategy or we’ll set ourselves up for future compensation-related problems. I want them to stay and build a career with our company, which means we need to be committed to their long-term success.
Top performers – no matter the job title or level – are motivated by professional growth. Although it’s important that we compensate fairly from day one, it’s even more important that we have opportunities for them to perform long-term. Here are a few practices that have helped us land and retain top recruits:
Ask for W-2s.
When we’re recruiting at the top of the pay scale, we ask candidates to provide copies of their W-2s for the past two years. Yes, discussing money is uncomfortable; but in my experience, you need to get this on the table early. When asked about compensation, people generally round up. My intention is not to call someone out when asking for their W-2s, but to bring transparency into the discussion that typically involves incentive and commission-based compensation.
Validate your compensation with outside advisors.
An increasing amount of information can be found on the Internet, but it is often unreliable and inaccurate. We consistently engage third-party consultants to help us evaluate and establish compensation ranges for positions at all levels. This helps remove the emotion often attached to pay and provides us with guidelines validated with data and industry benchmarks. Being involved in industry peer groups can also be a good resource for benchmarking compensation packages for top performers.
Benefits and compensation vary across organizations and industries. And although Marco is a fairly large employer (500+ employees), we can’t always compete with publicly traded companies and government agencies for benefits and pay. Instead of trying to match healthcare plans, banked vacation or other reimbursed expenses, we’ve used one-time bonuses to help bridge the financial gap. This not only compensates them for the specific disparity, it also fulfills our commitment upfront and mitigates obligations related to this in the future. These sign-on bonuses can be significant (tens of thousands of dollars), but can be an excellent tool for bridging compensation deltas and getting the person onboard.
Put the risk in perspective.
When we sit across the table from a top recruit who calls for a high salary, it’s easy to feel like the company is the one taking all the risk. The fact of the matter is the person who is considering leaving their good-paying job with a track record of success is actually taking the higher risk. I have found understanding where the risk really lies makes it easier to hire top quality candidates rather than letting pay become a barrier to growth.
Be prepared to wait.
There have been occasions when we have been presented with the opportunity to hire top talent, but the timing wasn’t right. I’d rather delay the hire until the opportunity presents itself to increase the likelihood of long-term success for both parties. In fact we’ve recently hired three high-performing individuals that we have been recruiting for several years and now the timing is finally right. The point is, although you should always be recruiting, bringing them on board may take some patience. But don’t forget about them – keep the communication lines open.
I believe recruiting and hiring top performers has been the key to Marco’s success. Retaining a workforce of top talent allows us to consistently post double-digit growth and supports a culture that people want to be a part of. Don’t be afraid to invest in the best.