The ZOPA of Hiring
By Sandy Cavitch
The ‘Zone Of Possible Agreement’ is not a physical place, but rather an area where two or more negotiating parties may find common ground. It is this area where parties will often compromise and strike a deal.
Every hire is a negotiation about an exchange, make it a success. The employee will be dedicating time, brains, effort, focus, and loyalty. The company will be paying salary, employment taxes, benefits, and investing in training and career development. What are each of these exchanges worth?
On either side of the equation, a full assessment and appreciation for the value of the contribution should be done as objectively as possible. But one size rarely fits all well. Understanding perspectives and priorities will help rule out hard stops from the get go, and identify the ZOPA of a hire.
For example, as a candidate, your present salary doesn’t always equate to your worth in a new position at a different company. The value you bring to a new role may be greater or less than what you were last earning.
And salary isn’t everything, far from it. Quality of life is important. Work environment is huge. Perks, benefits, equity, are all quantifiables that come on top of your salary. When comparing two opportunities, throw the apples and oranges into food processor and then compare the fresh squeezed cup of juice that results from each.
Understand that each company is different, and starting salaries may be lower or higher depending on the upside or an outstanding culture that unifies and attracts talent. Know your own hard stops, and identify what makes up an employer of choice for you.
As a hiring manager, understanding where the company has flexibility, how it will incrementally gain from certain hires, and whether the perfect candidate on paper has what it takes to success in your company’s culture.
The ability to tailor an offer must be weighed against any issues of fairness, while fully recognizing different people are motivated differently. Immediately rule out those who lack the right qualifications, those who aren’t a cultural or personality fit, and those who cannot demonstrate a passion for the mission.
Go from there. For the right person, what can you do to reach agreement within the role’s allotted pay grade or other company hard stops?
Rule out what doesn’t work, focus on where you can make it work. A recruiter or HR staffer often has a pivot role to play, in a sense investigating and mediating between parties to come to the zone of agreement more quickly and efficiently.
About the author:
Sandy Cavitch is a human resources management consultant. Sandy works with companies on tailoring employment contracts to create motivating environments that meet company goals and staff priorities. An avid equestrian, Sandy enjoys spending time in the outdoors when not otherwise engaged in creating HR success stories.