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We just hired a new team member, A. Just as her hiring process was wrapping up, we found another ideal candidate, B. He would be a great fit at our company. I don't want to lose him. But, we don't have the budget to take B on now.

Since May has 3 pay periods, the payroll really jumps up. So, we would like to bring B on after May. With 2 months to go, I was wondering if you guys have any tips to manage this situation?

I have thought about cutting other team member hours, replace a poor performing team member or just lengthening the hiring process and doing extra checks and references.

Your positive input is highly appreciated.

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    Comments are not for extended discussion; this conversation has been moved to chat. – Monica Cellio Apr 6 '17 at 18:03
  • A solution in real estate investing is to offer an option contract. You pay a seller $10,000 now with the option to purchase within 2 years. You can exercise the option at any time. So you would pay the employee with a contract of lesser amount with the option to hire at a later date. That way they won't go look around. Option contracts are enforceable by court of law so breaking the contract yields a lawsuit. – Chloe Apr 6 '17 at 20:46
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    @Chloe: that's legal advice, and extremely dubious advice at that, and neither of you specified what jurisdiction. They've already hired A. So no, they can't change her already-issued contract into an 'option contract', and nobody in their right mind would accept such a contract since it weakened their job security; it would also make the employer sound shady, and risk losing them. If you really meant 'deferred start date' (to defer May payroll), then I still can't see why anyone would accept such a thing (unless they voluntarily wanted to go travel for a month with no income). – smci Apr 7 '17 at 9:40
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    @AnoE: "we like you, but we won't offer you for a month or two, so please sit on the beach until we're ready" is a guaranteed way to lose a good candidate, or make them wonder what's wrong with the employer. The solution is make B an offer now, with a deferred start date – smci Apr 7 '17 at 9:43
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    @MartinBonner: the OP's profile says they're in the US (NY). US notice periods are customarily only 2 weeks (rarely longer); and the candidate might already have quit their last job. – smci Apr 7 '17 at 10:08
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How about just talking to him? Many candidates will actually appreciate a later start date. That makes winding down things at your current gig easier. And if you are not strapped for cash, you can take some really relaxed time-off, since there is no work yet to interfere with vacation.

So unless he is currently out of work or particularly miserable at his current job, I don't see any reason why this would be a problem. Just give him an offer letter right now with a June 1 start date.

If there a problems, you need to address those on a case by case basis. There are various levers that can help: a sign on bonus, temporary contractor status, part time for a few weeks, etc.

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    This makes things very simple and easy. Thanks for the start date recommendation. – DomainsFeatured Apr 5 '17 at 16:27
  • Chose this as the answer because it provides a simple solution that I will use. And, it gives me a few other tools. I will probably bring him on a temporary contractor in the meanwhile and will get him up to speed too. – DomainsFeatured Apr 5 '17 at 17:35
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    Talk to him, but don't mention the "three pay periods in May" part of it, I'd say. – PoloHoleSet Apr 5 '17 at 18:58
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    I've had this already with some company. If you chose to go for "lets talk with him" (which is best) & you're certain he can be brought by lets say June/July. Sign a contract with him with these times in advance. As a candidate when I was told 2 months ago "we will bring you here in the summer" I saw it as not going to happen. You'll need to provide some evidence to your promise. – RanST Apr 6 '17 at 9:51
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    It feels like 80% of the workplace questions can be solved by "just talk to each other". – Sven Apr 6 '17 at 15:08
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First of all, I'd be honest with this person.

We'd like to bring you on, but can't afford to do so until after May.

Perhaps he already has a job that he can hang on to for another couple of months. Then again, perhaps his situation is more urgent, and he can't afford to do that.

At least get a dialog going, because lying to this candidate, and making him jump through hoop after hoop is not likely to endear you to him.

If worse comes to worse, you can have an internal conversation about methods of affording him (such as firing a poorly performing team member, although I'd seriously consider the impact on team morale if you do so).

If you do reach an understanding with him, however, extend a written offer letter. Don't leave things hanging as a verbal agreement. That's code for "we're not serious about this".

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    I wouldn't even mention the reason. I wouldn't even bat an eye at a June start date for a job offer received in early April. – Kevin Apr 5 '17 at 18:58
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    If you go this route you'll have to make it exceedingly clear that the "can't afford" part is due to department budgets or something similar. If the company's cash flow can't swing 2 weeks' salary that would be a huge red flag and great candidates will also be smart enough not to start working for such a struggling business. – Lilienthal Apr 5 '17 at 19:56
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    Just delete the word "afford [to]" and this is okay. – user42272 Apr 5 '17 at 22:08
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    I think it is worth mentioning that you don't know how to make payroll if you take him on, and that you're not sure how you are going to make payroll in August either, without firing someone else. This will allow him to best make an informed decision about whether he wants to work for you. The phrase 'we are a bunch of clowns' could be helpful in this conversation. – jwg Apr 6 '17 at 6:27
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    If someone interviewed me and then told me they couldn't afford to take me on, I would wonder why they posted the job and interviewed me in the first place. – Matt Lishman Apr 6 '17 at 11:53
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Of course be upfront with them. And put it in writing. If you can't put it in writing your shouldn't expect them to wait around. Whether they accept your story will depend on if they need the job now, or it they can wait.

Keep in mind that they will keep looking, they will keep applying, and they will keep interviewing. Even if you tell them the truth, and they say they are willing to wait, there is not guarantee they will actually be around in two months.

8

If I'm understanding right,

  • you really like this candidate, but
  • you don't have the budget to take him on right now, because
  • May has 3 periods, so presumably
  • You are exactly one period short of being able to hire him!

This is ridiculous. What would you do if he demanded a signing bonus of roughly 1/26th of his annual salary - admit that you can't afford him? If he gets a bout of pneumonia are the extra sick days going to put your company underwater? So, which is it: is he too good to pass up, or do you not need to hire someone right now?

If you do want to hire him for your very rigid budget, here are some straightforward first steps:

  • You could offer him something you can afford instead of something you wish you could afford
  • You could offer him June 1st because that's when the position is open
  • You could pro-rate his salary, because this is what accounting is for, as the triple pay period is designed to even out salaries of employees who work all year

But hopefully you will have some plan when he negotiates and requests more money than your initial offer (besides saying "we're too broke").

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    Let us continue this discussion in chat. (Edit: Oh, I clicked the "move to chat" button but actually I was just going to say, "You're welcome, glad it was helpful.") :) – Wildcard Apr 6 '17 at 6:44
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    Saying one we are one period short is inaccurate. You have to account for the entire Payroll which is 50% higher in May across the board. With 10 employees, you're talking about an extra $10,000-$20,000 that you don't have to pay for 10 months out of the year. – DomainsFeatured Apr 7 '17 at 12:01
  • @DomainsFeatured have you actually talked to your accountant about this yet? – user42272 Apr 7 '17 at 17:40
  • @djechlin We ended up switching from Bi-Weekly payroll to Semi Monthly on the 15th/30th so that payroll would align with accounting. It equally distributes the wages from all months so there aren't 50% increases twice a year. Since we are doing it in April, it lowers the expense for May and now there's really no question about hiring the candidate in question. Thanks for the follow up :-) – DomainsFeatured Apr 7 '17 at 21:41
8

The answer on talking to the candidate is sound advice. Does he want a delay or is does he want to start now? What would work out the best for him. Be sure to leave out the part about hiring the even better candidate immediately.

replace a poor performing team member

This is bothering me to the point of writing an answer. You seem to care about your employees. Regardless of your actions with the candidate in question why would you keep this person around? Everyone knows he is under performing. You can serve your company, you, your other employers, and even the team member in question by letting him go.

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    You're absolutely right. I do care - probably to a fault. And, it's not just unfair to me, but to the team as well. I have given this team member many chances to improve and invested in them tremendously. This is a very good point. It would help everyone. – DomainsFeatured Apr 5 '17 at 21:53
  • It's possible the poor performing employee has some job that some other person will have to do. – user42272 Apr 5 '17 at 22:07
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    Its also possible that the poor performing employee has hopefully temporary problems in his life and has proved himself capable in the past. In which case an employer who doesn't treat him like a piece of worn-out plant is to be commended. – nigel222 Apr 6 '17 at 11:34
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It seems that this is overly complex. Tell the candidate that you would like to hire him with a start date of June 1st and see if he says ok. Doing things like extra background checks to prolong the hiring process will do

  • terrible answer. Without giving the candidate a signed contract, there is little evidence that they have a job - they would probably continue job hunting. BG checks aren't a job offer, they're a hassle for candidates. – bharal Apr 5 '17 at 17:13
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    @bharal The answer doesn't preclude a signed contract: it's perfectly possible to ask them if a start date of June 1 is OK and, if they say yes, get a contract signed. – David Richerby Apr 5 '17 at 18:24
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    But -1 for coming up with BS reasons for delaying the hire. – David Richerby Apr 5 '17 at 18:24
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    @DavidRicherby - agreed. Lying to the candidate and going through a sham process to string him/her along, time-wise, is not a good way to start a working relationship. – PoloHoleSet Apr 5 '17 at 18:59
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    You know he's going to be spending the rest of the month and several years wondering why this is the only firm and he is the only employee to require prolonged background checks. – user42272 Apr 5 '17 at 22:07

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