The “strict flexibility” Approach to Offers

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Always plan for some flexibility in whom you’re trying to hire. If you’re one of the decision makers (hiring manager, executive, or people ops) for a given job requisition, pick ahead of time:

  • The band, AND

  • The possible upgraded / downgraded band (based on the seniority or capability of the person)

In other words, for example, if you’re hiring for role X belonging to band Y (e.g., Director), consider ahead of time whether you’d flex to band Y+1 (VP) or Y-1 (Manager) depending on the candidate.

This balance of structure and flexibility is key to get the best of both the worlds:

  • Avoids situations where companies go wayyy out of band for a candidate who didn’t justify it, simply because they negotiated well (happens more often at <50 person companies that don’t have strong guidelines);

  • Avoid situations where they got the band wrong and didn’t adapt or reconsider for a rockstar candidate because they didn’t “fit” (happens more often at >500 person companies, where rigid rules have taken hold).

In other words, everyone would agree that hiring is so unpredictable and talent is paramount, so some flexibility is critical; but by agreeing to the bounds of that flexibility ahead of time, the hiring committee has predetermined guidelines within which to exercise that judgment.

If you’re upgrading or downgrading band for a specific candidate per the guidelines, set their targets accordingly. If you hire a candidate as VP of Sales instead of Director of Sales, they should have more ambitious targets, and a broader mandate. A CFO should be able to own fundraising processes and outcomes end-to-end, while a Director of Finance may put together decks, metrics, and participate actively in fundraising without necessarily leading it. Explicitly codify all this in an updated role scope, and share it with the candidate along with the updated offer to make sure they understand you’re a) upgrading band (it’s a compliment!), and b) you have high expectations for them.

Once all this is factored in, be strict with the band. You’ve already laid out plenty of flexibility, so do not break a band for an offer, or it just gets sloppy.

Finally, a couple of contingencies and exceptions:

 

  • If you end up upgrading band for a candidate, or making an offer at the high end of band, allow that person’s comp to normalize over time, organically through lighter raises. This is typical at larger (public) tech companies, and is a very fair way to do it. For example, let’s say a candidate is graded at band 6, which calls for a $350K fully loaded offer. If they have a $400K offer from a competitor which needs to be matched, then over the next 2 years, other band 6 employees may be promoted to band 7 with $420K comp, with $35K raises year over year, bringing them to $420K. The specific candidate in question would receive only $10K raises each year, bringing them on par with the other band 7 employees over that two year timeframe. Of course, if that hire is lights-out and deserves to be promoted to band 8 in that timeframe, they’ve earned it!

  • C-Suite execs often don’t fall clearly into a band; and the difference between a phenomenal exec vs. a bad one can be orders of magnitude. This is one of the few cases where it probably makes sense to offer “whatever it takes to get them.” (Obviously within reason, and making sure they’re still well-calibrated to other execs.)

Written by Hari Raghavan, Founder of AbstractOps

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