Why it’s important to get that awkward compensation question out of the way

If recruiters expect full disclosure from candidates, at least they can reciprocate
By Belinda Schuler-Chin
|Canadian HR Reporter|Last Updated: 04/17/2017

Talking about compensation is an important aspect in the hiring process as it establishes a relationship based on trust and transparency from the get-go. After all, an employer entrusts a recruiter to select the best candidate for the position, and the candidate trusts the hiring manager will be transparent about the compensation details for the role.

However, the great debate seems to be around timing and who has the right to make the first move when it comes to compensation.

On the one hand, recruiters claim they have the right to establish the timing as they are the ones extending the offer and placing their companies at risk. On the other hand, candidates feel they have as much right to ask about compensation as soon as possible, as they have a clearcut idea of their value, their time and should be able to ask the question without being cut from the process.

So, how do we get past this impasse?

Let’s start with this question: Are recruiters aware they are responsible for not only the well-being of their company, their internal stakeholders and their external clients, but the candidates as well?

The answer is: It depends on the knowledge, competency and professionalism of the recruiter. Human capital gives companies competitive edge, and their combined skills support a company’s performance, sustainability and strategic goals in its respected industry.

A competent recruiter is an excellent communicator and skilled negotiator. He is aware of his company’s financial abilities and business goals, its culture and talent gaps.

He knows the audience and, more importantly, is able to take charge and manage expectations of the interview process to get the best possible outcome — without compromising the company’s reputation.

Simply put, a great recruiter is able to generate a win-win outcome while being as transparent and realistic as possible.

At the basic level, if you expect candidates to offer full disclosure on their education and experience, and to invest a significant amount of time in demonstrating to you why they are the best fit, the least you can do is reciprocate and share as much as you can about the role and compensation package they would be entitled to, should they be successful candidates.

Naturally, the process varies and depends on company practices, the role and the resources available.

I would argue that while disclosing compensation details is not restricted to the first, second or third interview, disclosing it as early as possible in the process demonstrates a respect for all parties’ time, alleviates nerves and simply makes good business sense.

Having tested several approaches, I found the ones that worked best resulted in a relaxed and articulate candidate who was more prone to answer my questions fully — once we got compensation out of the way.

In one instance, I shared the salary range along with the role description during the first interview, which paved the way for an engaging and insightful exchange, revealed their KSAOs (job-related knowledge, skills, abilities and other characteristics) and led to a successful, long-term hire.

In another instance, I outlined the interview process — the first interview would be focused on the role, company culture and the person’s alignment or fit; the second interview would be on compensation details; and the third would involve meeting the team, a tour of the company and a full-offer package.

This, again, resulted in a seamless exchange, a satisfied candidate who felt her compensation was “fair” and a successful, long-term hire.

It’s important to note — every candidate’s idea of “fair” differs and the last thing any recruiter would want is to get to the offer-letter stage, only to have the candidate feel low-balled and decline, or you hire at a lower rate and find later you have a disgruntled, demotivated employee in your midst.

In contrast, I have heard of negative interview experiences — some where candidates struggled when asked about their salary expectations, then unwittingly settled for a lower-than-anticipated compensation, and later exited the company after negotiating a “fair” compensation with another company.

Yet, there are other candidates who are coerced into signing offer letters during the first stage of the interview, without having their questions addressed.

I remember one bad experience when, upon negotiation of a fixed salary, the recruiter drafted an offer that reflected a lower amount than discussed, so the candidate subsequently declined — and was subjected to verbal abuse by the recruiter.

Recruiters need to understand that with the rise of social media, their reputation and their company’s reputation are at risk at all times, and they are responsible for understanding the implications and applicability of local legislation when it comes to best practices around hiring. 

Today’s candidates are resourceful, media-savvy, aware of their rights and, at a bare minimum, extremely proficient at gathering information and taking whatever suitable, and often damaging, recourse to expose a company’s malpractices.

Until we respect the profession of our choosing, set realistic and transparent standards and abide by them, we will continue to do a disservice to our field of expertise.

Until we proactively seek out the relevant legislation and guidelines, and garner our companies’ and stakeholders’ “buy-in,” we will continue to put our reputations at risk.

Until we hold ourselves accountable and practise the true meaning of “human” in human resources, these kinds of situations will persist.

Belinda Schuler-Chin is a Certified Human Resources Professional (CHRP) in Toronto and a candidate for a master’s in human resources management (MHRM) at York University in Toronto. She can be reached at www.linkedin.com/in/belindaschulerchin or on Twitter @bella_c.

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