Why Low Ball Offers Are A Bad Idea

Have you ever considered making a lowball salary offer? Perhaps it was for a candidate who was a good fit but has been unemployed for a few months. Say she was earning $100k in her previous position. Because she is currently unemployed, it might be tempting to experiment with how low of a salary you can offer say $80-$85k, since she currently has no income. But the reality is that it is never a good approach. Making a lowball job offer is a quick way to lose time, money and respect regardless of the candidate’s employment status.

Reasons Lowball Offers Are A Bad Idea

1. You will lose your candidate indefinitely.

If you make a lowball offer, you run the risk of losing the candidate forever. There’s a huge chance that she will not take you seriously and reject the offer immediately. If this happens, you will most likely not receive a counter-offer and the candidate will no longer be interested in the position. Be mindful of the time it takes to find an ideal employee. You don’t want to have one in hand only to lose her because you chose not to initially offer an acceptable salary. Some candidates will refuse to negotiate if they feel they are being cheated. What a disappointing and unnecessary way to lose a good candidate!

However, if your company has legitimate financial issues and cannot afford to compensate the candidate with a salary that is consistent with her experience, you should be upfront and open about it. You don’t want prospective employees to perceive you are playing games or attempting to take advantage of them. Take time to make a fair job offer, and if it falls below the position’s salary range, be able to support your decision with proper justification. The candidate deserves an explanation.

2. That offer is going to set the tone for your relationship going forward.

You’ve gone through the interview process. The candidate has expressed interest in you. You have expressed in the candidate. And then, you follow up with a lowball offer. Ouch! The amount of money you are willing to pay finalists often imply what you think of them. Therefore, it’s understandable that some candidates consider it reflection of your opinion on their worth. When you demean an employee in the beginning of a relationship (or it is perceived you did), it usually does not end well.

You also risk tainting your company’s image. When you try to lowball a salary offer, candidates are forced to consider what other ways they may be given the short end of the stick in the future. If it’s salary today, it may be a raise and travel expenses tomorrow. And even if a candidate accepts your offer with these doubts, she will not trust you. This  can create resentment, especially if you make the offer in an effort to capitalize on her vulnerability, i.e., unemployment. Employees who do not feel valued typically do not perform as well as those who do, which can cost the company significantly.

3. The candidate will be a flight risk.

Let’s assume that the candidate does not eliminate herself and accepts the lowball job offer. Do you really want that to be out of desperation? Even if you do happen to sell her on the offer, you can bet that in today’s job market, candidates, especially good ones, will continue receiving calls from recruiters. As these calls come in, she will most likely continue interviewing up until the day another company offers to pay her what she’s worth. Losing a candidate during the interview process is a pain, but losing one shortly after you believe you’ve made a winning hire is even worse.

Understand what lowball offers are not.

All salary offers which come in lower than a candidates compensation history are not necessarily in the lowball category. Sometimes extenuating circumstances can create these situations. Job restructures and budget cuts are two legitimate reasons your salary offer may not be able to reflect those in the market. And that is okay. Lowballing is intentional and not done out of necessity. It is an attempt to pay as little as possible regardless of a candidate’s education and experience or a company’s ability to pay.

Consider Future Consequences

When making a job offer, you should always consider how it will affect your company in the future. One candidate’s negative experience can discourage other quality candidates from even considering working for you. Many job applicants turn to Glassdoor when they want to leave a review on their hiring experiences, and it only takes one negative review for a recruiter or potential job applicant to pass judgement on your company’s culture.

Regardless of a candidate’s leverage, you should always do your best to pay a competitive salary that your company can afford. This creates a win-win situation for everyone.