9 reasons why offers matter most
Offers are the king of comp — change my mind.
Homer said “to alcohol” — and I say to offers! The cause of, and solution to, all pay problems.
Once again, the Simpsons had it right.
Whether we’re talking about pay equity issues or market rates, offers are simultaneously the source of our biggest problems and our most powerful solutions.
This week, I’m sharing nine reasons why. In the coming weeks, I’ll elaborate in a series of posts.
9 reasons why offers matter most
1. All other pay decisions are downstream
Annual increases, promotions, and corporate bonuses are all derivative to the offer. Every other pay decision starts here, period.
2. Offers are directly tied to the market
Offers are literally market transactions, with the buyer (company) and seller (worker) agreeing to a price. There is no more direct measure possible.
3. Offers launch the employee experience
It’s all sweet talk until the offer. This is the moment, when you put a value on their worth, and make or break trust. When you don’t just say, “I love you,” you show it.
4. Offers are commonly negotiated
Annual increases and promotions are rarely negotiated, whereas offers almost always are. This creates the pay parity issues we clean up later.
(You won’t find “savvy negotiator” as a requirement in many job descriptions.)
5. Offers are the most discretionary
Where comp planning has belts and suspenders, offers can feel like the gun-slinging wild west. Add a signing bonus or max out stock — broad discretion is the norm.
6. Offers are uniquely high-signal
When else do you have a fresh job description, structured evaluation data, and explicit alternatives for the decision-makers?
7. Offers have the greatest skills mismatch
Recruiters are typically better trained on top-of-funnel (finding great people). And yet they manage the most challenging pay conversations with limited data, tools, and process.
8. Offers cause pay parity issues
Recruiters are incentivized to get butts in seats quickly, even at the expense of pay parity. With better tools and data, recruiters can play the more consultative role that candidates expect, instead of defaulting to negotiation.
9. Offers are the front line of pay transparency
US pay transparency legislation focuses on the offer marketplace. How companies post jobs, manage pay conversations, and leverage data in decisions are increasingly regulated.
Is there a single action comp teams take that isn’t directly impacted by offers? Share in the comments below.
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