Big Biller Secrets

Presenter: Patrick Ropella, CEO of The Ropella Group

Patrick Ropella is the Chairman & CEO of the Ropella Group, based in Milton Florida. The Ropella Group is a leading Executive Search and Consulting firm with an extensive network of experts in a broad array of industries and functional areas. Ropella’s highly unique proprietary SMART Search System, combined with their sophisticated network, research partners, and database systems results in unsurpassed relationship building which gives Ropella an exceptional and proven success rate in finding the most cohesive match between employers and employees. With over 25 years of Executive Search experience Patrick specializes in and has extensive knowledge in the every facet of the chemical industry and understands the unique career, recruitment, and hiring challenges faced by these industries. In his Big Biller presentation, Patrick presents elements of his SMART search system. Paired with his approach to mastering the art of executive search, this system can help you navigate the treacherous waters of the offer and acceptance process.

Meeting: “Big Biller Secrets” by Patrick Ropella

If you are reviewing this episode with a team, watch the entire Episode. Use the notes below to implement the best practices provided.

(Facilitator): In many situations, a good offense is a good defense! When Patrick steps in to help manage the offer and acceptance process, he has worked hard to make sure he fully aligns expectations with both the candidate and client long before the offer and acceptance process actually begins. You simply can't wait until you are actually receiving an offer to explain to the client the value of our role in managing the offer and acceptance process. Review the Aligning Expectations document on the following page; how can you use this to create a dialogue with your client about potential pitfalls and our expertise in avoiding them? Patrick recommends always conducting this discussion at the very beginning of the engagement, before the search is commenced.

(Facilitator): How many of the following situations have occurred throughout your interviewing process? What questions and protocol do you have in place to be proactive about getting each “land mine” cleared prior to discussion around an offer?

Title Cost of Living Adjustment Bonus Stock Options Salary Commissions 401k Insurance Benefits Vacation/PTO Company Car or Allowance Tuition Reimbursement Fitness and/or Country Club Memberships First Class and/or Corporate Jet Access Claw backs on Sign On Bonus and/or Tuition Relocation Expenses and/or Cost of Housing Allowance Loss of spouse's income after the relocation

The final pages of this Facilitation Guide have a Checklist that could be used as a starting point to make sure the most common issues are covered prior to continued steps in the decision process.

(Facilitator): Knowing what to do is one thing, but knowing how to do it is another! If you’d like to use Patrick’s script for educating the client as to why it is in their best interest to work with him throughout the offer and acceptance process:

“As we’ve discussed, our process dramatically improves the odds of success - that is "getting a yes” on the first presentation of an offer to our candidate. We would ask for a commitment that you allow us to apply our process whereby we manage all compensation discussions with the finalist directly with the goal of getting all the candidates cards on the table, and getting answers to all necessary questions up front - thereby eliminating all anticipatable surprises.

We will partner with your hiring team, to help you make a well informed offer where all the candidate’s issues have been at least considered, but ideally appropriately dealt with. No offer should ever be made where we don’t know what the candidate’s answer will be. How do we know the answer? The candidate trusts us, and we’ve run hypothetical scenarios past the candidate in order to test the waters and obtain clear direction for you as the client.”

The same education can take place with the candidate:

"We don't know for sure if we can get the client to reach to this high of a level, but are you telling us that you guarantee you will accept the A scenario? If yes, we are telling our client that you are a person of your word, and your word is your bond. And you need to understand that this commitment from you will be more motivating to our clients. It will push them to try harder to reach for a higher salary or more concessions. They will push this because they know it's a deal clincher and there's no likelihood they will have to go back to the well and ask for more. This is real leverage and it's much more likely to help us get more for you than if you give us a fuzzy "maybe" answer to what you "might" accept.”

Candidate Offer - Checklist

DISCLAIMER: These questions are purely for informational purposes only!

We need to address all of these issues so we can thoroughly address all the points of negotiation.

Most of the questions below can be quickly answered by sending us a copy of your most recent

Earnings Statement.

Name: ______________ Date: _____________

Salary

What is your year-to-date annual salary?

How often are you paid? [select the pay-period below that applied to you.]

Monthly (12 paychecks )

Semi-Monthly (24 paychecks)

Biweekly (26 paychecks)

Weekly (52 paychecks)

Other:________________________________

When was your last salary review with your current employer? What was the percentage

increase to your salary?

When does your next salary review with your employer take place, and what percentage

increase do you expect?

Note: Please send a recent copy of your W-2

Bonus

How is your current bonus plan structured (e.g., min., target, and max. performance levels;

or fixed percentage of your salary)?

What has been your average bonus received over the last three years?

What is the annual frequency of your bonus payments?

What is your bonus payout based on? What performance metrics are used to determine

your actual payout?

When is your bonus payout date? When is your next bonus payout?

Should your resignation date preceded your next bonus payout date; will you have to forgo

your bonus payout? If so, will you lose the full amount, or just a portion?

Stock Options

What type of share-based incentives are you currently receiving from your current employer

(e.g., Stock Award Grants, Stock Options, Employee Share Purchase Plan, Phantom

Stocks, etc.)? What are the details?

How would you calculate the nominal value of your share-based incentives, on an annual

basis?

What is the vesting schedule?

How much will you have to forgo by leaving now?

Retirement Plans

401(k) plans – does your employer provide matching contributions to your 401(k) plan? If

so, what is the matching formula that your company uses to make employer

contributions?

What is the vesting schedule of employer contributions [immediate full vesting, graded

vesting, cliff vesting]

Do you have a Defined Benefit Pension Plan with your current employer? If so, what is the

pre-defined formula used to calculate your fixed retirement benefit?

Are there any other long-term savings plans provided by your current employer (i.e., profit-

sharing, ESOP, etc.)?

Standard Benefits

[Please provide a copy of your Benefits Confirmation statement, as well as any Benefits

Summary that provides details on current insurance provider, plan type, and the types of

coverage that you and your family current receive]

Do you receive health benefits from your current employer?

Per pay-period, how much do you pay for health insurance?

Who’s covered under your medical insurance [single coverage, employee + spouse,

family]?

What percentage of your total health insurance premium is covered by your current

employer?

Does this include Dental/Vision/Prescription Insurance as well? If not, what are your

monthly deductions for your current Dental/Vision/Prescription Insurance policies,

versus the costs paid by your employer?

Does this cost cover only you, or does it cover your family as well?

Do you receive Short-Term Disability Insurance under your current employer? What

percentage of your current salary would you receive, and for how long (or, time period

until Long-Term Insurance kicks in)? What your monthly deductions for Short-Term

Disability Insurance?

Do you receive Long-Term Disability Insurance under your current employer? What

percentage of your current salary would you receive, and for how long? What your

monthly deductions for Long-Term Disability Insurance?

Do you have Life Insurance under your current employer? If yes, what are the details

surrounding your life insurance policy (monthly premiums, total death benefit, additional

riders for spouses and/or children, etc.)

Do you receive any supplemental life insurance, and if so, what are your monthly premium

costs?

Vacation

How many weeks/days of vacation do you receive from your current employer? [Notes.

Please include sick time, personal time, floating holidays, etc]

When are you eligible for additional of vacation time?

Misc. Perks

Does your current employer provide you with a company vehicle? If so, please provide

make, model and year.

Are you provided with a car allowance? If so, how much per period?

Does your current company offer any health club benefits and/or a corporate membership

to a Country Club?

Does your current company provide access to a corporate Jet?

Does your current company offer any other special benefits we should be aware of?

Relocation Program

What has been the your past experiences getting relocation benefits?

What year did you purchase your current home, and what was the purchase price?

What is the current estimated value of your home?

What is your current loan-to-value ratio?

What would be the target selling price for your home?

How much do you think it will cost to move household goods? This link will help:

http://www.homefair.com/homefair/calc/movecalcin.html?

How much will it cost for realtors fees and closing costs on the selling end?

Will you need help with temporary living expenses? If so, provide explanation as to why you

would need assistance with temporary living expenses, and for how long?

Will you need help with temporary storage expenses?

Will you need the assistance of a relocation coordinator and/or realtor on the buying end?

How much will closing costs on the buying end? (use target selling price for computation)

Have you considered keeping your home as a second home or rental – investment

property?

Golden Handcuffs

Are you tied to any reimbursable expenses (e.g., relocation expenses, tuition, sign-on

bonus, etc.)? If so, please provide details.

Employment Contracts & Severance Plans

Do you have an existing non-compete under your current employer? If yes, please provide

copy of your non-compete.

Did your current company offer a severance package in the original offer? If yes, what are

the details surrounding your severance package?

Start Date & Contingencies

Do you have a specific start date target in mind? If so, what is that date based on?

Do you have any special upcoming meetings, projects, and/or events that would prevent an

earlier start?

Does your spouse or children have any timing issues we should be aware of that could

affect the selected start date or relocation timing (e.g., vacation, school issues, job

issues etc.)?

Client Offer - Checklist

DISCLAIMER: Not all of the following issues may relate to the offer of employment you’re preparing.

However for the issues that do relate, please be prepared to address them in a comprehensive manner

during the verbal presentation of the offer and/or in detail within the context of the written offer and/or with

the attached documentation.

The candidate will use all of his/her past compensation, benefits, and relocation experiences to compare

the offer you’re preparing. So understanding his/her current situation and his/her past experiences can be

crucial in understanding his/her expectations and reasons for wanting to negotiate certain issues.

From the moment you select a candidate to the time you make an offer, this period is well recognized as

the most crucial for courting and paying attention to detail prompt follow up Therefore, this point forward

will prove to be the most valuable investment of your time to date in regards to completing this process.

Nine out of ten deals fall apart at the last minute because candidates perceive delays and lack of

attention to detail very negatively.

Emotions are high at this point for the candidate, his/her spouse, family and friends. So delays and

missteps are looked upon with much more suspicion and given amplified weight. Bureaucracy, dropped

balls, and miscommunications within your company are simply looked upon by the candidate, family, and

friends as unpreparedness, unprofessional in the worst case sloppy or careless. Who wants to join a

company that looks like that? If the candidate has more than one offer on the table, the client who shines

and makes no mistakes takes a huge lead at this point.

When preparing the offer, ask yourself the following questions-and if you don't have the answers, try to

get them ASAP and address them in the offer, or verbally, at the time the offer is made.

Salary

What is the candidate’s current salary?

When does the candidate’s next salary review with his/her current employer take place and

what percentage increase does the candidate expect?

What has been the candidate’s past experiences when making job changes as it relates to an

increase in compensation? How big of a percent increase has he/she seen in the past?

Why and where?

If you make a salary offer, what’s a realistic raise likely to be, and when would the next raise

take place?

Is there any possibility you can do a six-month review with the first raise taking place then?

Bonus

Is this position a bonus-qualified position?

What is the bonus payout based on? How does the bonus program work?

When does the bonus actually get paid?

What is a REALISTIC bonus payout likely to be for the first year?

If your salary offer is low, can you guarantee all or a portion of the first year bonus?

Vacation

How many weeks of vacation does the candidate get from his/her current employer?

If you can't match the candidate’s current vacation situation, how long will it take the candidate

to catch back up to his current situation within your company’s vacation schedule?

If you can't match the candidate’s current vacation situation because of “corporate policy,” can

you work out the difference between yourself and the candidate on the side?

Standard Benefits

What insurance coverage do you provide? (health, dental, vision, life, disability-family

or individual only?)

What is the cost for insurance to the employee for individual and/or family coverage?

How does this compare to the costs individual/family is incurring for benefits now?

Does the company provide Life Insurance? How much, and who pays?

Does the company provide Disability Insurance? How much, and who pays?

Special Benefits

Does this position qualify for a company car or car allowance? If so, what kind of car is

available—new or fleet?

If car allowance, how much, and what’s it supposed to cover? (Insurance, Maintenance, Gas,

Tolls)

Does your company offer any health club benefits?

Does your company have a corporate membership to a country club?

Does your company own or have access to a corporate jet?

Does your company offer any other special benefits we should be aware of?

Employee Savings Plan:

What is the amount/outline of the company contribution to the 401k plan?

Are there any other savings plans available that the candidate should be aware of?

Pension Plan

Can you please provide a review of your pension plan in the offer packet?

Stock Options

Does this position qualify for stock options?

If the company is privately owned, are there any sort of ownership programs available?

Relocation Program

What has been the candidate’s past experiences as it relates to getting relocation benefits?

How does your company handle the moving of household goods and vehicles?

How does your company handle home shopping trips?

Does your company have a relocation coordinator and/or realtors lined up to help the candidate

and their spouse?

How does your company handle temporary living expenses?

How does your company handle temporary storage expenses?

Does your company pay realtors fees on the selling end?

Does your company pay points and closing costs on the buying end?

Does your company offer an incidentals cash sum to cover unexpected items needed for new

home?

Does your company offer a home buyout program if the house doesn't sell in x number of days?

If you don't offer a home buyout program, will you cover the possibility of a double mortgage

situation until the candidate’s current home sells?

As a last resort, will your company provide a bridge loan to help cover a second mortgage until

home sells?

Employment Contracts and Severance Plans

What kind of employment contract do you use when hiring new employees?

Does your company require a Non-Compete Agreement to be signed?

Does your company require a Confidentiality or Non-Disclosure Agreement to be signed?

What does your company typically offer as a severance package to departing employees?

Will your company insert a severance package into an employment contract?

Start Date and Contingencies

Is there a specific start date that you would like to target, and why?

Are there any special upcoming meetings or events that you’d like the new employee to attend?

In the offer, don’t over extend the date that the offer should be accepted by-make it 3 to 5 days

max.

Is there anything you can do right away to make sure that the new employee feels a part of your

company right away?

Can you send training materials to start studying or preparation materials to start reviewing?

Has the degree confirmation and all reference checks been completed to your satisfaction?

Does your company require a Physical and Drug Screen before the start date? If so, where

does the candidate have to go to get the Physical and Drug Screen completed?

Is there any paper work that the candidate needs to take to the doctor’s appointment?

Who coordinates the scheduling of the Physical and Drug Screen and how soon can it be

scheduled?

Sign On Bonus

Are relocation benefits GROSSED UP to cover taxes? If not, use a sign on bonus to address

the losses for their taxes?

Use a sign on bonus to cover any additional expenses in relation to benefits.

Does the car allowance get assigned as income and therefore taxed? If so, gross up or use a

sign on bonus.

Gross up a sign on bonus to cover the taxes that will be charged.

VERY IMPORTANT: Ask yourself, “Why does the candidate want this job?”

If he's/she’s currently employed and happy in his/her job will you court him/her more than if

he's/she’s in outplacement and therefore more likely to be motivated to accept less?

Do you really understand the candidate’s position on other competitive job prospects? How

much ISN’T he/she telling you about other interviews?

What happens if you lose this candidate? Are you prepared for the reaction from your hiring

team and your boss?

Ask yourself: Why do you want this candidate? If you really like and believe there's real value in

hiring this candidate, do you really want to risk losing this person over a few thousand

dollars?

What dollar figure would you put on your time, as well as the time of others that are involved in

interviewing all the candidates to date? Add that to the cost of plane tickets, meals, hotel

rooms, etc… that will be needed in order to interview more candidates-if there are more

candidates that are

as well qualified. Then ask yourself again: Do you really want to risk losing this person over

a few thousand dollars?

How do you want to be perceived? During the interview process did you present an image of a

progressive company willing to invest in the right assets such as special equipment,

marketing programs, and related sales resources necessary to be highly successful? If you

did, but now you’re thinking you'd like to low ball or squeeze an offer by the candidate, aren't

you sending a mixed message and creating a red flag regarding your commitment to

achieve success?

Do you believe in insurance? Then you may want to look at a sign on bonus as a form of

Counter Offer or Competing Offer insurance.

In the roaring 80’s, we were very concerned about companies retaining employees with

aggressive counter offers. Now, with the amount of baby boomers retiring companies are going

to new heights to keep from losing their top talent to the competition. We are entering a

TALENT WAR. Due to this trend over the next ten years we will see incredible pressures to

keep our best people. So don’t be surprised if your top finalists have multiple other offers they

are considering when you’re in the interview process.

The bottom line is… The Company who COURTS the candidates before, during, and after

the interviews is going to have the greatest success in recruiting and hiring top talent.