Building a recruiting machine: What to do after you’ve made an offer

Founders Supporting Founders: Iterative is accepting applications for its next batch.

This is the last installment of a three-part series on how to build a recruiting machine. If you haven’t read part one and two, you can find them here and here.

Founders who haven’t had a lot of experience with hiring often forget that after they extend an offer, they’ll have to do the negotiation and compensation dance with the candidates as well as onboard them smoothly into the organization.

You should treat this process as a way to show candidates that you care by being thoughtful and systematic about how compensation is structured. You’ll have much happier employees as a result.

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Compensation and negotiations

Congratulations! You’re ready to give out an offer. Companies have different opinions on how to approach negotiations (how much flex and what the rules are), and they could also have increasingly complex compensation schemes, depending on certain factors.

Entire articles can be written about compensation strategies, but I’ve learned that in the early stages, the best way to approach this topic is to not overthink and learn to make adjustments as the company grows.

There’s a couple of things to remember here:

1) Compensation grids

Employees should be paid fairly. Usually, the way to go about this is to find surveys done by third parties that help gauge pay grades based on role, seniority, geography, etc.

In the absence of that, the best way is to triangulate your own data points against those of your friends. Your employees want to know that you’ve been thoughtful about why you compensate the way you do. Having a “compensation philosophy” will convey that you’ve put serious thought into the topic and will continue to do so throughout the life of the company.

2) Salary vs. equity

Most startups give equity to their employees. Hopefully, you’ve developed an equity/hiring plan and have thought about the types of people you want to hire and how much you’ll give them before actually starting the recruitment process.

At Iterative, we use a flexible all-in compensation system that allows employees to adjust for more salary and less equity or less salary and more equity, and we’ve found that this works well. I tend to like being generous with equity and slightly above market with salary.

Onboarding

What’s next?