Negotiating a job offer in executive search

Editor at Better Headhunting

20+ years in executive search across software, games, and technology leadership

Negotiating a job offer in headhunting can be a delicate and complex process. The headhunter plays a pivotal role in managing the expectations of both the candidate and the client to ensure a successful deal. This is by its nature a sensitive time for all parties in an offer process. The candidate has often been through an intensive interview process and wants to close the deal, but is fearful of getting a low job offer. The client wants to close the candidate but is worried about them being too expensive and may have budgetary constraints. It’s the headhunters role to sit in the middle of this and try to work out a deal. But how can you approach doing that?

This stage is often more fragile than it looks. A search that has gone smoothly up to this point can still fall apart if expectations have not been managed properly, or if either side feels misunderstood during the offer discussion.

Understanding the candidate’s current compensation

One of the most important aspects of negotiating a job offer in headhunting is understanding both the candidate’s and the client’s expectations. In that sense, a good initial approach is to make sure the hiring company knows exactly how much the candidate is paid today. The headhunter will normally ask the candidate at interview stage how much they are paid, but often nuance is missed around long term incentive plans and company benefits. You need this detail at offer stage. Prior to making the candidate a job offer, it’s a good idea to send them a form which captures all the details of their current compensation. Without that, the risk of a rejected, “low-ball” offer is much higher.

This is where detail matters. Base salary alone is rarely enough. Bonus, equity, benefits, pension, carried interest, long-term incentives and notice period can all shape how a candidate views an offer. If those details are not properly understood, a package that looks reasonable on paper may still feel disappointing in reality.

It’s very natural for candidates to want more money to change roles, as people want to feel that they are always progressing upwards from a compensation perspective, particularly when they reach key career milestones like an exciting new role. Companies should, within reason, offer candidates pay rises when they can, but this isn’t always possible.

When salary isn’t the whole answer

Early stage companies are often cash-constrained – many of them may not make a profit and be reliant on venture capital or private equity funding. These sorts of companies often can’t afford to give candidates rises in salary. In this scenario, are there other things like equity you can offer the candidate in lieu of more salary? It’s also important to make sure that the candidate knows of these constraints. Most people are quite reasonable when they know the reality of what is possible and what is not, but if you don’t set the right expectations, an offer that is equal or lower than their current compensation is quite likely to be rejected.

This is particularly common in earlier-stage or investor-backed businesses, where the opportunity itself may be strong but cash compensation is more constrained. In those cases, the candidate needs to understand the trade-off clearly and early. If expectations are set well, many candidates will be pragmatic. If they are not, even a sensible offer can land badly.

The headhunter as a mediator

The headhunter’s role is so valuable here in that they can have honest conversations with both the candidate and prospective employer to hammer out a deal. If the candidate and client were talking directly to negotiate the job offer, both parties would worry about being too honest and offending the other. Recruitment processes are like a romance. Whilst practical details like offer dimensions are very important, they can sometimes take the romance out of the situation. Furthermore, if either party finds it hard to be honest with one another, the chances of negotiating a deal that is satisfactory to everyone is much diminished.

This intermediary role is one of the reasons headhunters can add real value late in a process. They are often able to surface concerns, test reactions and manage difficult conversations in a way that would feel more awkward if client and candidate were negotiating directly. Armed with the candidate’s current compensation in detail, and a sense of their expectations from the headhunter, it’s then the hiring company’s job to put together an initial job offer. This will usually be communicated to the candidate through the headhunter.

Should you make your best offer first?

Should this first offer be the best job offer or leave room for negotiation? There is no easy answer to this question as both approaches have pros and cons. Making your best offer first tells the candidate you want them and aren’t playing negotiation games. It gives you the best chance of getting a “yes” back straight away. However, some candidates will negotiate all first offers out of principle, and will feel better about the commercial deal if they feel that they have negotiated a stronger deal for themselves. An initial offer that is 5-10% lower than your highest offer leaves wiggle room for such a negotiation. Which approach to go for depends a lot on the context of the offer, and the nature of the candidate involved.

Much depends on the context. If the candidate is in high demand or has competing options, a strong first offer may help create confidence and momentum. If the candidate is likely to negotiate on principle, some room for movement may be sensible. There is no universal rule, but there is usually a wrong answer if the offer is badly misjudged.

Reaching agreement and closing the deal

Once the broad terms are agreed verbally, the process usually becomes much more straightforward. At that point, the main priority is to move quickly and keep momentum, so that a well-negotiated deal does not drift unnecessarily.

When it comes to job offer negotiations, the headhunter’s role is to sit in the middle and without being biased to either party, have direct conversations with both to determine an appropriate financial package for all. The headhunter needs to make sure that both client and candidate understand each other’s constraints, empathizing with and understanding each other’s positions. The headhunter has a huge financial interest in closing the deal (and the project) and the best way to do that is to act fairly and impartially between client and candidate.

After both parties agree on the verbal terms, the hiring company should prepare the paperwork. Thankfully, as important as the formal paperwork is, it’s very rare for deals not to happen once a package is verbally agreed.

Why expectation management matters early

Offer negotiations are rarely won or lost only at the end of the process. In many cases, the outcome has been shaped much earlier by how well expectations were managed around salary, equity, flexibility and likely constraints. If those issues are discussed honestly from the outset, the final negotiation is usually much smoother. If they are not, the offer stage can become unnecessarily difficult.

Harvard Business Review provides a thorough explanation of how to negotiate job offers from the candidate’s perspective – it’s a good read for understanding the other side of the story.