First problem – he turned down my offer.
If you found only one candidate who was head and shoulders above the rest, and he turned your job offer down, then this is a real problem. Otherwise it’s just a mask for annoyance at someone rejecting you. Rephrase this problem so you don’t act as if it’s a rejection of you. This isn’t about you, it’s about him, the job description, or the salary.
Go back and double-check your earlier research into the market value for the position. Make sure that you weren’t low balling the salary. Similarly, reanalyze the job profile. Are you expecting too much? Consider whether you did anything during the interview process to make the candidate uncomfortable or angry. While it’s not your role as an interviewer to get the candidates to trust you, making them restive won’t help you attract quality people.
Like all appeals, this one begins by discerning the reason for the no. Contact the candidate and express surprise at his rejection. Explain that you were very impressed by him, are disappointed by his decision, and would be grateful for some feedback about the process. Don’t be a supplicant. Instead ask him what the motivating factors were for his decision, so you can have a better idea of what future candidates will think.
If he says you weren’t offering enough salary, say that you have an honest disagreement about market value. Note that all you can do is promise to pay more as the market increases. If that’s not sufficient, wish him well. You cannot start paying more than market value for people or there will be no limit to your payroll.
If he says there was something troubling about the job description, solicit details and see if you can reach some kind of compromise. For instance, if he objects to the travel demands, explain that perhaps he misunderstood, and note that much of the client contact can be done through teleconferencing instead.
Second problem – he wants a contract.
You need to frame your problem a bit more narrowly in order to solve it. Just wanting a contract isn’t really a problem, since a contract can say as much or as little as you’d like. It’s only a problem if the employee wants a contract that restricts your freedoms, either by guaranteeing him a certain term of employment and/or specified salary increases.
You need to become an expert on the wide variety of things that can be part of a contract. For example, just because there’s an employment contract doesn’t mean the employee isn’t still employed “at will.” The contract can specifically say employment is at will. It can simply be a formal statement of the terms of the at will employment. The contract could describe the job, state the salary, outline the benefits, and even explore severance pay, just as long as it doesn’t say how long the employee will be working for you, and what his future salary increases will be. You could even turn the employee’s request for a contract to your advantage by inserting a clause that temporarily keeps the employee from working for a competitor if they leave or are terminated.
You’ll create a tremendous level of trust between you and a job candidate if you don’t immediately rule out the idea of an employment contract. Often, all a candidate is looking for is a written guarantee of what is being offered verbally. Even savvy candidates might be satisfied with just negotiating a severance package, in exchange for a no compete clause.
Because an employment contract can contain whatever you want, there’s no need for you to immediately say no when a candidate asks for one. Rather than the candidate appealing your no, or your appealing their turning down your job offer, the two of you can simply negotiate the terms of an agreement that’s mutually satisfying.