Welcome to the wonderful world of negotiation, where every candidate seems to have attended a class on effective negotiation.  I'll spare you the regular discourse on how badly you need the talent (and whether you are going to find another suitable candidate) and get right to the issue - what do you do when a candidate counters?  Once a candidate presents you with a counteroffer to your original offer, you basically have four choices:

1.  Accept their Counteroffer and close the deal - this probably means you low-balled them initially or the skill set is so critical you can't delay the hire - so after giving it the "old college try" to keep the offer down, you'll crumble like a deck of cards built on sand....

2.  Give a Little Ground and Go Back to the Candidate with a Counteroffer of your own somewhere in the middle - a common practice, which usually shows that both parties are expecting some process to get to a number they are comfortable with.  Nobody goes on the car lot without expecting to haggle a little bit, right?

3.  Hold Firm on the Offer that was originally made - you love the candidate but aren't going to budge.  Tell them you love them, but the offer is the offer.  Always helps to have some reasons why - budget, salary range guidelines, your view of the marketplace, other candidates in th mix you can go to, etc...

4.  Walk Away Cold - The hardcore reaction to a counteroffer, this action means that once the candidate counters, you are retracting your initial offer and letting them know no counter offer will be forthcoming from the company.  I see this happen the most when the company has done everything it needs to measure the compensation needs of the candidate (This usually means you ask them! What a novel approach!), then the candidate surprises them by asking for more after indicating an offer along the lines of the one made would be acceptable.  That can create a trust issue that can't be overcome.  Additionally, sometimes the hiring manager won't want to work through the process, preferring instead to simply walk away.

I know - walking away cold seems harsh doesn't it?  In our experience, #2 is the most common, followed by #3.  #1 happens less, and as we outlined, #4 is generally only used if someone gets their feelings hurt.

It's more art than science.  Good luck out there...

Loaded question.  There's no such thing as the perfect candidate.

There is, however, the candidate who you want REALLY bad.  They've got the skills, and you don't want to beat around the bush and risk losing them - you feel like you might be in a competitive situation, against others or against a counter-offer from their current company.

So you've got to make the first offer count.  How far do you go?

--5%?  Only if you're looking to get in a bidding war or perhaps have the candidate drop you without countering and say, "You know, I've decided that I'm OK where I'm at"

--10%? The standard from which all offers are measured.  A 5% raise is a paltry merit raise to most high performers, but 10% becomes something to consider.  Most candidates will evaluate the offer including a 10% raise, but high performers will negotiate and perhaps drop you like the average candidate would if you offer 5%.

--20%?  Now you're talking.  20% is gold standard when it comes to the pay bump you're giving a star candidate.  That's the threshold that it takes to get the attention of a player, and the 20% bump has the added attraction of going beyond what a bureaucratic company can do related to a counter.

The other thing that's interesting about the psychology of the pay bump included in the offer is that it's relative to the engagement of the candidate.  The numbers we provided above are an opinion of what it would take to rip a high performer with average engagement levels from a competitor. However, if the engagement levels of the star performer are low or she's otherwise disenchanted with the company, you can move from 20% to 15%, even 10% related to your offer to the star.

Which means you have to read the tea leaves.  Someone you consider a star that was a direct apply to your website has some engagement issues.  Don't start at 20%.

Passive candidate you consider a star?  Think long and hard before you offer 5% or even 10%.  Going to take more.

Happy hunting.

Do you want to be transactional or strategic?  Do you want the best information or minimal information?

Those are the questions you should ask when pondering at what point to check references in your hiring process.

When do you check references in your hiring process?  If you're treating the reference check process like a transaction - like something to check off that you've done - you're checking references when you're down to your final candidate, and at times even post-offer.

Checking references when you're down to the final candiate or even post-offer means you're already committed to the candidate.  That usually means your reference check process is minimal to the point that the only thing that can stop the hire is something related to criminal background. Additionally, even if you ask the right questions, valuable information offered by the reference that might cause careful consideration related to a candidate is often ignored.

After all, you're down to one candidate.  Maybe you've made an offer while references are still being contacted.  The hiring manager you're supporting with your reference process has little incentive to stop the process at that point.

Which is why more companies are revamping their reference process to ensure that references are collected for all finalists for an open position.

Think about it.  If you do references for all candidates who are finalists for an open position, you've just made the feedback collected more than a simple knock-out process.  If you check references for 4 candidates who are finalists in your process, you've turned the feedback collected into the equivalent of an expert interviewer - the feedback that results can be compared and contrasted across all candidates and the position in question.  As a result, a candidate who appeared to be the #2 choice can emerge as the #1 if your reference check is thoughtful, systematic and probing.

A good reference check process is a "knock-out" tool.  It's a tool that allows candidates to "trend up" in the process based on the information uncovered and contrasted as you compare candidates.

You don't get that if you only check references on the final candidate.  Check references on all finalists and committ to making the data uncovered as much a part of your hiring process as comparing interview notes.

You'll be glad you did.

Employee References = Employee Referrals.   Let that sink in for a bit...

Most of us agree that the most effective hires come from employee referrals.  The reasons are pretty simple, yet powerful: employee referrals generally net candidates who are interested in working for your company because they've heard great things from their friend (who already works for you).  Consequently, referrals will feel a sense of connection the moment they walk in the door, and hopefully have been vetted by the employee doing the referring.

So it makes sense that if employee referrals are good, we want more of them, right?

The tricky part is that quality employee referrals are hard to get.  There are generally only so many people that your employees know well enough professionally to refer, and if you start pushing for more referrals, you're bound to get quality control issues - employees passing you along names rather than candidates they can truly vouch for.

Here's a simple answer to the employee referral problem : Start mining the references your candidates provide daily as an alternative/supplement to your employee referral program. Use the references your candidates provide as a new candidate pool.

The references your candidates provide are very similar to employee referrals.  Some would say they're the same thing - here are 5 reasons why:

1.  References are a trusted pool of professionals, so much so that the candidate is willing to make them a part of their personal brand. (similar to employee referrals)

2.  References often have served as mentors for the candidates who have cited them as references. (similar to many employee referrals)

3.  References usually bring greater experience to the table than the candidate who cited them. (similar to many employee referrals)

4.  References are known to be "stable", meaning the citing candidate knows they're going to be around for awhile. (similar to employee referrals)

5.  References are self selected by the candidate pool for their communication skills.  They'll be expected to pop a 2 minute elevator speech on demand about the candidate in question, and this is who the candidate selected for that task.  Have any jobs where you need a filter for the ability to communicate on the phone or via email?  Ever come to the conclusion that people who can communicate can also generally perform at a high level? (This actually makes the reference a candidate provides a better recruiting tool than employee referrals - they have communication skills in addition to job-related skills!)

We've got a product at SkillSurvey we call the Passive Candidate Compiler, which allows you to systematically build a database of candidates from the candidate reference process that occurs in your company daily.

You don't have to use our product, but you do have to ask yourself - how many employee referral-type candidates are you missing by not mining the references of your candidates for recruiting prospects?