Now that you have selected your preferred candidate it is time to make them an offer. The offer is an important element for the future of the employee. You need to consider it carefully.
Your offer sits somewhere at an intersection between what is normal in your industry, what your business plan allows, and what is viable locally. An offer is the point at which the business transaction between employee and employer happens. It is generally best and final. I have occasionally asked for clarifications and minor changes, but most of us are not like athletes where many employers compete at the same time for offered services.
What is normal in your business can be found out through research. For C level positions, Board of Directors is supposed to check with services that get companies of your size, industry, and location. Then the Board has justification for the pay that they are going to offer. Such services are available at other positions. Additionally, the perks and benefits of the position should be in line with other employers.
Locality is very important as part of this. Different areas of the country have different cost of living. People living in Silicon Valley need more to live than those living in Casper, Wyoming (one site I looked at pegged that change at 127%). If you are offering less than a living wage (what would be required to live alone in a 1-bedroom apartment), then you are likely looking at rapid employee turnover. Less than a living wage is often offered for entry-level jobs by young people. They are expected to live with their parents or have a roommate. But over time they will want to be on their own and the only way for them to do so is to work 2 or more jobs or find a better job.
You need to look at your business plan and how much you will make by employing this person (remember my question about how you know that they are succeeding?). Henry Ford paid more money to his workers because they made him more money through this assembly line. By understanding this answer, you will see if you can afford to pay this position what is needed locally and what is at least normal for the position. If you can, then you are likely to fill this position. If not, then you need to think seriously about why you are opening this position.
Once the person has accepted your offer, you need to onboard them. This is the topic of my next blog post.
Have a great day!
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