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Some organizations are beginning to embrace a new practice: paying candidates for interviews and/or skills assessments. Organizations approach this trend in a couple of different ways; they might compensate candidates for time spent on all interviews or compensate candidates for only “task- or deliverable-based” interviews or skills assessments.[1] Paying candidates during the interview process may sound like an unconventional choice, but there are a couple of reasons organizations are adopting this practice.
- Demonstrates respect for the candidates’ time. Candidates are spending hours preparing for interviews—especially if they are task-specific—and utilizing the knowledge they’ve amassed over their careers to prepare for them. Furthermore, sometimes candidates are treated poorly during the hiring process by managers (e.g., ghosting, taking excessive time between updates and interview rounds, etc.). By compensating candidates, companies are actively showing respect for candidates’ time.
- Demonstrates the organization’s equity values and culture. Oftentimes, organizations write a diversity, equity, and inclusion (DEI) statement and display it on their websites, but it can be less clear how organizations live their DEI values. Compensating candidates for time spent on assessments is one way to showcase an organization’s commitment to equity. This practice is less about actual compensation and more about organizational culture. If candidates have great hiring experiences (even if they don’t get hired), they are more likely to speak positively about the organization to their peers, which may increase the profile of the organization. Furthermore, a great hiring experience can be an indicator of a great work experience at the organization.
By demonstrating respect for candidates’ time and the organization’s equity values and culture, an organization that adopts an interview compensation practice will increase its profile to be more competitive. Interviewing is a two-way street—candidates are interviewing the organization, too. Competitive candidates are fielding multiple job offers, so by compensating candidates, the organization is becoming more desirable to candidates and differentiating itself from its competitors. This is crucial during a time when some organizations are experiencing difficulties hiring the best talent. Compensating candidates for interviews may have more of a financial impact on entry- and mid-level roles than C-suite roles, but no matter the role, this practice represents a way for organizations to demonstrate their values and culture. Because this is an emerging trend and viewpoints may differ, we asked some members of our leadership team for their thoughts on this practice. Here is what they had to say:
Dara Z. Klarfeld, Chief Executive Officer: The relationship between hiring managers/search committees and candidates sets the tone for the future of the partnership. At the beginning of any search, it’s important that expectations are laid out clearly to candidates so that they understand the cadence of the search and the potential expectations for their participation in the process. Clarity, planning, and consistent communication help to foster a productive learning experience for everyone.
When you foster this trust during an interview process, candidates will know that there is a potential expectation of some work product to be shared during the course of the process. I don’t think that candidates should be paid for work that is solely designed to demonstrate their skills and experience to the committee. However, once/if the committee asks the candidate to present their thoughts and to use their skills and experience to apply these thoughts to the current state of the organization, for me, that work crosses the line of “free consulting” and should be compensated. Often times hiring committees will ask candidates to do 1–3-year plans for their potential hire and make a presentation to the group. That requires real time and work product from a candidate and may require them to share some of their intellectual property to an organization who has no commitment to them. It doesn’t feel great for candidates to develop in-depth presentations about an organization that are thoughtful and detailed in service of demonstrating their abilities, and then for those ideas to be “taken” by the organization. Some might argue that this is just par for the course of the interview process—that, in order to get the job, you need to participate fully in the process. Compensating candidates relieves this unbalanced and unhealthy power dynamic and demonstrates to candidates right out of the gate that we value your time and your thoughts, and we appreciate your participation in this part of the process.
Heather Gowdy, Partner: Hiring processes vary by organization and by role, and we’ve all seen processes that demand a lot from applicants. An organization hiring for a highly technical role, for example, might require promising applicants to complete a multi-hour assignment to demonstrate their facility with the specific tools in use at that organization or to assess a candidate’s ability to problem-solve in a new context. This isn’t necessarily wrong, but applicants applying for such roles often find themselves having to take time off from their current jobs to fulfill the requirements of prospective employers, and not everyone can do this with ease. Organizations must consider the time they are asking candidates to invest, be strategic about what they ask from whom, and consider the possibility that the cost of compensating promising applicants for the extra “asks” is both a cost of doing business and a way to telegraph the organization’s values and commitment to equity.
Lori Clement, Principal, Client Engagement: In my opinion, time-intensive interview-related homework tasks should only be requested from finalist candidates, no matter the level of role. I sincerely hope that organizations have learned not to waste the time of people they have no interest in hiring. I like this trend: I believe that American workers should share in more of the profits made by U.S. companies. I see significant alignment in the for-profit sector, where capitalism and the competition for great candidates can easily lead to premiums for access to those candidates. For government and nonprofit roles, I worry about a further stress to the limited resources available for recruiting top talent. For candidate with overwhelming personal and professional responsibilities, the policy doesn’t solve their problem of actually finding time to complete a potentially time-intensive task, though it may alleviate some of the economic risk. As a demonstration of an organization living its DEI values, I personally would need a lot more evidence than this one practice.
Michelle Tafel, Principal, Organizational Consulting: What I like about this practice is that it causes a hiring manager to pause and ask whether the task they are asking candidates to complete is essential to vetting the candidate. Paying for something (in this case a candidate’s time) creates a new filter that might lead to innovation and efficiency in the process. For any level role, the danger is that the honorarium is too low—and, instead of feeling respectful, the compensation offer conveys the opposite message.
Let’s discuss this trend: What are your thoughts on this practice? Where have you seen this work? Would your organization adopt this practice? [1] It is important to note that this does not include interviews in which organizations ask candidates to prepare strategic plans, briefs, etc., and then use candidates’ documents for the organization’s gain. In this case, candidates should always and unquestionably be compensated.
Akshita Sankepally, Talent Consultant
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