Why your first offer should be your final offer

There’s this misconception that we need to low-ball employee offers so there’s wiggle room for negotiation. The employee (or potential candidate) will see the offer and be inclined to negotiate because the offer is, well bullsh*t, and then we “give in” and then the employee feels like they’ve won. Wonderful, everyone is a winner, we’re paying a fair wage (if the employee bothered to negotiate) and the employee has “won”. No one is a winner when we screw around with someone’s livelihood.

I don’t have enough fingers or toes to count how many times I have sat across a desk or computer screen from a people leader where they have disagreed with my offer recommendations because… “if we give them our top offer now and they negotiate, we may go over budget or pay them more than we should.” Let me be clear, that is not how it works, make a fair offer and be able to defend it.

Here is what happens when you play games with your employees, potential employees or departing employees:

Hello inequity

You are banking on someone negotiating when they may not have the skills, knowledge or confidence to negotiate. They trust that what you’re selling is fair. What if they accept this first offer? Then what?

 We are already trying to close the pay gap between gender, race, ability, etc. It's tactics like this that contribute to this inequity that continues to be present in every workplace.

Say farewell to any trust you’ve built

People talk.

 “Oh no, our policies say they are not to discuss compensation with their peers”.

 They talk.

 And when they do start talking, they’ll know the truth. When people are paid fairly, it fosters trust and commitment. When they’re not… well it can lead to the opposite.

Prepare for some backlash

See the previous point…people talk.

And people love talking about how they were wronged. They tell their friends, their co-workers, their family, their neighbours, the strangers on the internet who see their TikTok rant, and the people who are reading your company reviews.

But despite the reputational damage, you may also face an uphill legal battle.

When it comes to severance packages, offering the bare minimum or using generic calculations such as two weeks of pay per year of service is not enough for without-cause terminations. Employee well-being involves many factors, and the severance package you offer should reflect that. Remember that your departing employee has the right to seek legal advice, and if they do, the costs of separation will increase, including the cost of engaging your lawyer.

In short, we can make better decisions by empathizing with others and establishing fair policies that take into account everyone's distinct talents and situations. Leaders should also keep in mind that they are employees themselves and would not appreciate interference in their work.

But for those who receive an offer, any offer…negotiate, even just a little, they may say no but they may say yes.