For nearly 20 years, I’ve worked as a recruiter both internally and externally for many different organizations. I’ve recruited at all levels, across several different industries from Big Law to manufacturing, higher education to social enterprise non-profits to police departments and everything in between.

While the process of finding the right candidate was different for each industry, all these organizations had one thing in common: their aversion to talking about money. Talking about money with candidates—in the first conversation—has been, and continues to be, one of the biggest hurdles for many organizations.

Wait. Talk about money in the first conversation, you ask? Yes, the first conversation.

So many hiring managers and directors and board chairs have looked at me with wide eyes or furrowed brows when I told them I planned to talk to the candidates about compensation expectations on the first phone interview. “That’s crazy!” many said. “You’ll sink the deal! We will never get any good candidates that way!” others lamented.

 It’s not crazy. It’s not tacky. It’s not going to sink the ship. It’s just good business.

Why do I talk about money with candidates right out of the gate? Because so much of making good matches is about managing expectations and ensuring everyone is on the same page about everything—the requirements of the role, the expectations and responsibilities for the role, and the compensation. Sure, I’ve met with or spoken to potential candidates who are making more than my client can pay, and many have turned me down on that first phone call. That’s fine. But some candidates were at the point when they could consider other financial arrangements (meaning salary wasn’t as important), and still others who were making twice what my client was offering for the role and wanted to be considered anyway. They were grateful that I’d talked about it on the first call and most of those candidates who made it through the screening process also accepted the offer when I presented it—even at much less than they were currently making. Others for whom the compensation was in their range were also grateful we’d talked about it on that first call and most accepted offers when presented.

Why be transparent?

In my experience, being transparent has almost never been the wrong move. However, organizations continue to present excuses for not doing it: “We want people who have a passion for the work,” “We are afraid of turning people away,” or of “losing good candidates.” (Trust me here, you are going to lose good candidates at the offer stage anyway, even if you can’t offer them what they expect to earn. So why waste everyone’s time?)

Then there are the other excuses: “We don’t want to give away our salary structure,” “We don’t want other people to know what we pay,” “We are sure we can work it out; money isn’t the most important thing.” Or my favorite: “The salary will be ‘commensurate with experience.’” (This isn’t necessarily true; I once took a job that was 40k below my current salary—the top range for the role I was applying for. But I was passionate about the work, and I knew I was changing industries, so I was willing to take the salary cut to get the experience. Your interviewee may too.)

There are all kinds of excuses from organizations as to why they don’t want to talk money in the beginning, but mostly it’s just because people are afraid of it and don’t know how to talk about it. I’m telling you: all companies have established ranges for positions. Salaries are not set randomly. And all internal HR recruiters should be trained on how to talk about money with candidates and how to do it in the beginning (at all levels).  External recruiters should know better than to advise an opaque compensation process to a client. Not only does transparency increase the likelihood that you’ll fill the position more quickly, it also establishes trust between the recruiter and the candidate—and once that candidate becomes an employee—sets the tone for long-term success.

I’m not suggesting you can’t have wiggle room, or that you can’t negotiate, or that you have to stick to one number. You also don’t have to reveal to candidates what the absolute top of the range is right away. It’s possible to be creative or to offer more than the range for an awesome candidate, for a hard-to-fill position. Sure, there are always exceptions and industry standards, and I’m not suggesting you tell every single person who applies all the details, but all serious candidates should know what the potential compensation package will look like before they meet anyone else in your company. Period.

Benefits of being up front and the consequences of avoiding it:

I’ve presented several hundreds of offers throughout my career, and I can count on one hand how many people have turned me down for money. Yes, that’s fewer than five. Why? Because we discussed compensation expectations all along the way. We talked about money, at the first meeting or on the first call and long before the candidate met the hiring manager, did a Skype interview, put together a presentation to the board, got on a plane…

Let me give you an example of how not being transparent can go horribly wrong:

A friend of mine was being interviewed for the equivalent of his dream job in another larger market. They were recruiting him hard. First, he aced the phone interview. Then the Skype interview. Then they flew him across the country to meet the team. Then they flew his wife and entire family out to meet everyone and to tour the area.

My friend was excited.  His wife was excited. This was a great opportunity.

The company took up months of his time. Took up months of their associates’ time, their resources, and countless billable hours of all the employees across the company. They paid for flights, hotel rooms, lunches, dinners and Uber rides. But, when it came down to it, the company couldn’t make the deal happen despite their aggressive recruitment process. Why?  Because when they made him the offer, it was about half of what my friend thought they were going to offer based on the size of the company, the annual revenue, the location, and his experience. And they couldn’t (and wouldn’t) pay more.

My friend came away from this experience frustrated and disappointed. And the company had to start its process over.

Why did this happen?  Because no one talked about compensation until the very end. Yes, you could say that my friend deserves some of the “blame” for this failed process, but not really. It’s incumbent on the company to talk about compensation, and it’s awkward and unfair to make the candidate ask. But, here’s the kicker. My friend did ask. He asked both the external recruiter and the CEO. Neither would talk hard numbers and just kept saying “commensurate with experience and the role in the company.” Really? Whose?

What’s the lesson here?  

We all know it’s very expensive to recruit. It’s even more expensive to do it poorly. But it’s just plain crazy not to talk about potential compensation before mutual interest is established.

Jessica Smart
Principal