While providing a lowball job offer to a potential employee may save your organization money on the front end, but down the road, it’s likely to cost you double or triple the original investment.

How?

Picture This…

You’ve engaged with a supply chain recruiting firm to find a Warehouse Manager for your facility. You’re interviewing candidates who were presented within your desired salary range of 70-80k.

A solid candidate walks through the door. They are on the higher end of your range and you find out they are recently unemployed due to corporate restructuring. So you think: “I’m going to see if I can get them at 75k since they need a job”. This way, you save $5,000 and get the A candidate for less than you wanted, right?

WRONG.

It may seem like you are “saving” thousands on hires, but at what cost?

Now Picture This…

They accept because they need a job. It’s likely this worker will be disgruntled, knowing they are being underpaid. Maybe their productivity suffers, and the quality of work goes down.

They may even be on the clock searching for a new role.

And then they quit for a new opportunity that pays what they were looking for.

Now that $5,000 you “saved” is going back towards recruiting while more time (time = money) is spent on interviewing and onboarding a replacement, with the hope this person will stick around.

At the end of the day, if you can’t afford the candidate’s minimum compensation requirements, you probably shouldn’t be bringing them in for an interview.

There are VALID reasons for having to come in with an offer lower than a candidate’s requirements. This needs to be explicitly shared with the candidate prior to extending a lowball job offer. Here’s the best practice of approaching this:

  • Explain the Reasoning

    • Perhaps the candidates’ salary requirements are too close to their manager’s salary and you can’t justify bringing someone in this high off the bat. Or you are working with a budget constraint and can’t get approval to make an offer that matches the candidate’s needs.
  • Have an Honest Conversation

    • Transparency is key! Instead of delivering a lowball offer with no explanation, have a conversation with the candidate about the situation. People respect the genuine truth.
  • Put Together a Plan B and C

    • Perhaps you could offer the candidate a sign-on bonus or agree in writing to conduct a mid-year salary review with the goal of bumping the person up to where they need to be.

In recent years we have worked with a handful of companies that chose to give a lowball job offer at the 11th hour. Every time this happened, the candidates didn’t even bother with trying to counter. Instead, they were left with a negative impression and ended up declining the offer, even though the employers were willing to bump up the salaries to meet their requirements.

Moral of the story: Establish compensation ranges that you can DELIVER to candidates, and if you end up not being able to get someone where they need to be, have an honest conversation as to why, before offering an alternative.

There is an age-old saying that really holds true here (as well as with buying a used car)- You get what you pay for.

If you value your organization and want workers who produce results, you should compensate them for what they are worth.

By providing a lowball job offer to a qualified applicant, you are only cheating yourself and your business’s bottom line. Not to mention, you can quickly tarnish your employer brand. Candidates will likely share their negative experiences with their friends, colleagues, or worse, on online platforms like Glassdoor and Yelp.