Director, Talent Management
Bidding wars for talent is a real thing. But how does it impact hiring?
June 28, 2022 - Be in the Know
Given the ongoing labour shortages, talent has the upper hand in negotiations. Bidding wars for talent is a very real phenomenon, and our expert Nicolas Liénart, Director, Talent Management, offers solutions to take a proactive approach without putting your business at risk.
The dangers of labour shortages
Labour shortages are tricky because you have to think long term. Always respect your limits and ask yourself, “Is an employee who is only motivated by salary the one you want to bring on board?”.
Nicolas advises employers to look beyond a candidate’s current skill set to see what they might bring to the company in the long run. A $5,000 or $10,000 increase for a position valued at $160,000 is not the end of the world. The same amount for a position valued at $60,000, however, is a 10% increase! “But if the candidate is asking for a salary at the higher end of your scale for this position and is 400% motivated? Go for it!”.
The company must, however, have the means or capacity to do this without throwing its internal equity into disarray. A big structured company with well-defined parameters will have less room to maneuver and will keep equity top of mind. It’s the same for SMEs. You need to have sustainable turnover because losing control of the annual payroll can have long-term negative effects.
How to be proactive and avoid shortages?
The number one remedy to labour shortages is to showcase what makes you unique as well as your employer brand value in order to attract motivated candidates. Next, clearly outline what possibilities there are for advancement in the organization by presenting the salary scales transparently and offer benefits over more pay. Nicolas points out that candidates need to understand how they can grow within your organization and anticipate the steps to get there.
From the start of the recruitment process, validate your maximum salary scale to anticipate what might be asked, but also leave some room for the candidate to grow: if there is nowhere to go, they will go elsewhere.
It’s not about the money
One important thing to consider: when you offer employees a raise, two months later, this increase will be forgotten when it becomes part of their lifestyle. A few months down the road, another increase will be on the table. One possibility would be to base salary increases on objectives: offer a base salary but give a performance bonus based on clearly defined objectives. That way, the candidate can always earn more, but they will work to get it and will understand the challenges that come with the increase. Also, keep in mind that benefits are not limited to salaries alone, so consider the different elements that make up the total salary package. Be sure that employees know about these benefits.
Stay true to yourself
In the end, your goal is to maintain a strong employer brand that is shared 110% by your staff and avoid mortgaging your future. Lead with equity and what you can offer for years to come.
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