Cash Is King: How (And When) To Have That Compensation Conversation.

cashThe three most stressful things you can do in life, in order, are getting married, buying a house and finding a new job. The last thing in the world any of us want in any of these situations is buyer’s remorse.

The caveat for all these things, of course, is caveat emptor. Of course, finding for a job starts out with the assumption of frustration and futility, and only occasionally turns out OK, quite the opposite of both marriage and mortgages.

In fact, if the process of purchasing real estate or pursuing your perfect mate were anything like looking for a job, chances are most of us would be perfectly happy remaining single renters forever, I think.

We all know how the job search goes. You apply to a ton of roles, fill out endless forms online, and then sit by a phone that never rings while no one bothers to even look at the applications you spent so much time and effort on. For what? Nothing, mostly.

Occasionally, there’s an e-mail setting up some sort of scripted phone screen. Occasionally, that turns into an in person interview, a whole lot of hand wringing, a little negotiation, and ultimately, an offer for a job you aren’t really sure you wanted in the first place.

And that’s the best case scenario. Yeah. It’s pretty much the worst.

What makes it even more painful, of course, is that those offers almost always come in well under what you, the candidate, were expecting. Most of the time, it’s more or less a lateral move. Sometimes, companies will even come in well under what you’re currently making, with the hopes that you’ll trade compensation for the false hope of professional fulfillment. It’s appalling how many employers will come in with such outrageously low offers to candidates, and even more outrageous that most of them fully expect the candidate to take a step back in compensation for the promises of maybe someday taking some small step forward. And you know why?

Because candidates like you listened to a bunch of link baiting assholes, the kind who can’t get a job, and therefore dispense dispensable career advice on sites like Forbes.com, Facebook or the Huffington Post – where, unfortunately, this sort of crap content generates a ton of impressions on the most impressionable of audiences. The prevailing theme of these thoughtless “thought leaders,” of course, is that when you’re interviewing, it’s nobody’s business but your own what salary you make.

Cold, Cold Heart: What “Career Coaches” Don’t Get About Compensation.

giphy (28)There’s some myth that this information is somehow inconsequential when looking for a job, that stating your salary may seal your fate by knocking you out of the process. There’s a damn good reason for that. And that’s because your current compensation is a direct consideration for whether or not a candidate is qualified. If they make too much, or too little, it’s too much for too many employers to overcome in any offer.

Yes, these wonderful windbags, these crank “career coaches” who have no experience with recruiting or HR, much less the realities of talent acquisition today, have decided to mislead job seekers into somehow believing that compensation doesn’t count when looking for a job.

This sort of bad advice is harmful to job seekers and employers alike, and frankly, the fact that the people proffering such crappy content are desperately trying to stay relevant even though they have no business giving anyone any tips on how to find a job. Because they certainly aren’t doing anyone any favors.

A recent column on Forbes.com by Liz Ryan, one of the more influential career advice columnists out there, sparked my ire. It is not only dead wrong when it comes to recruiting and hiring, but that any job seeker who actually took this “advice” at face value would not only truly have their chances of landing the job severely hurt, but also, spend a potential ton of time chasing a position they wouldn’t have bothered with otherwise, much less seriously considered. This is by no means the first time I’ve read this sort of idiotic drivel disguised as career advice, so apologies in advance for singling out Ms. Ryan in particular. There are a ton of charlatans out there. It’s just something about this post sent me over the edge, somehow.

Click here to read the full article, but here’s a sample of Ryan’s dangerously misguided job search tips for those candidates who simply don’t know that this is a complete crock of shit:

“There is no need for a recruiter, whether inside or outside the company, to know what you’re earning now or what you earned at any past job. There is no reason for anybody in your possible next employer to be made privy to your personal financial information. They have pay scales. If they think you’re qualified for the job and your salary requirement fits their pay scales, they can make you an offer. If not, they can hire somebody else.”

Yeah, right.

Hurt: Why Compensation Is The 1 Thing A Recruiter Needs To Know About You.

giphy (29)Reading through Ms. Ryan’s latest diatribe on “The 5 Things A Recruiter Doesn’t Need To Know About You,” I figured that maybe I’d play devil’s advocate and see what it was that I could find out about this supposed career guru, since as a recruiter, I’m apparently not entitled to know anything. Like, you know, how much my candidates make.

Well, it turns out that I had to look no further than her full bio on the post or her LinkedIn profile to learn that she hasn’t actually worked in human capital in well over a decade, which means she has no idea if what she’s preaching is actually what practitioners are practicing in their actual jobs.

A quick read through the rest of that bio actually reveals that she was never really a recruiter at all – she was an HR Lady, and a senior level exec at that – the type who directs as opposed to actually gets their hands dirty sweating the small stuff. Hardly the kind of leader you’d think would be a thought leader, but then again, I really don’t follow how a RINO (“Recruiter in Name Only”) parading around as a “thought leader” can get away with spouting this kind of garbage.

All I know is despite Ryan’s ramblings, in the real world recruiting trenches, this is the sort of shit that we’ve got to deal with day in and day out – good candidates who, unfortunately, seem to have the tendency to believe terrible advice without critically examining whether or not the person dispensing that advice is qualified to be giving it in the first place, much less listened to. The problem is, too many people are listening, and the noise created by this crap has become overwhelming. Well, I thought it’s well time I tried to at least get a word in edgewise, given the fact that I really recruit in the real world and all. You know, I don’t just sit around and blog about theory; I actually practice instead of simply preach.

I tried reaching out to Ms. Ryan, and to no avail, too; she seems, like so many “thought leaders” and “influencers” to always steer clear of confrontation, particularly when they’re confronted with the truth. Facts, of course, make these “gurus” uncomfortable, because all they have are the same myths they’ve been irresponsibly peddling for years now. I hate to single out Liz Ryan, but she just happens to be exemplary of the bigger problem of the blind leading the blind.

Seriously, these “career experts” don’t have a clue – and I think it’s finally time we, as recruiters, took a stand against anyone who gives potentially harmful, constantly crappy advice to our candidates and connections under the guise of “thought leadership.” Or whatever shit they happen to be calling it.

I am writing this because of the fact that recruiters’ reputation has gone to hell on the backs of this sort of advice; we’re the ones who get the blame whenever an offer comes in insultingly low, or there’s some huge disconnect that could have been preempted had the candidate only ignored this sort of online content marketing and realized that maybe their current compensation just might be relevant information to disclose to a recruiter, after all.

Of course, I’m guessing it’s been quite some time since any of these “experts” have pulled in a steady paycheck, so one can forgive them for forgetting what, exactly, is involved in salary and compensation negotiation. That’s cool. Those who can’t do, recruit. And those who can’t do that become “thought leaders.”

One Piece At A Time: How HR Really Determines How Much You’re Really Worth.

tumblr_mea2auniis1qmxhobo1_500With this in mind, here’s a quick crash course in compensation for all you “thought leaders” out there to start thinking about.

First, it’s imperative when calculating how much each candidate should realistically expect to receive in an offer, to understand that every company packages and values the various components of compensation differently. For instance, many startups will pay under market rate in the short term in exchange for equity in the company set to vest over the long term, an award that’s almost always considered part of a comprehensive compensation package.

Alternatively, established companies and big brands might pay at or below market value, but factoring in sophisticated benefits packages, bonus plans, 401(k) matching, tuition reimbursement and the innumerable perks that enterprise employers often offer, the total compensation for a candidate might ultimately turn out to be more than fair, even if the salary itself is a lateral or lagging move.

Second, HR has their hands tied with such factors as “internal compression” or “compensation bands,” which is to say, sometimes, the offer has nothing to do with the candidate’s current or expected salary; instead, sometimes an offer will come in low because either their manager or other employees in that same sort of position are being underpaid. This is often the unintentional impact of tenure or unexpected cost of being too successful at retention; obviously, internal salaries rise at a much slower rate than do external moves, as a rule.

This means that if you’re recruiting someone new for a department with little turnover and too much tenure, chances are there’s no way HR can tender a competitive offer without giving everyone long overdue raises or promotions. And as we all know, there’s pretty much no chance of that happening. C’est la vie, candidates. It’s not that we can’t pay you what you deserve, it’s just we haven’t, historically. Our people are our greatest assets, of course, but only to a certain point in compensation. Then, naturally, they become a liability.

Despite the fact that many employers either have paid external consultants on retainer, dedicated departments or specific specialists focused exclusively on compensation, the truth is that HR really sucks at setting salaries. There are myriad conferences and credentials devoted to total rewards and salary trends, a ton of tools and resources (many low or no cost) HR can utilize to determine what the market is paying and how much a competitive package should come in at, but for some reason, it seems even the best offers only come in at average. For some reason, we can afford a cottage industry around compensation, but we can’t afford to pay candidates what they’re worth.

I wish some HR Business Partner would explain that one to me sometime.

The important thing to consider is that a lot of compensation is inexorably linked to the bottom line through bonus packages, revenue sharing, employee stock purchase programs and so forth. This means the better a company does, the more its people get paid. That’s only fair. Of course, with labor being the biggest cost on any P&L, there’s a delicate balance between making what you’re worth and making more than your company is willing to keep paying for. The bigger your base salary, the bigger the target you’ll probably have if belt tightening or cost cutting ever occur. The bottom line is that your compensation, my friend, is a huge part of the costs of doing business. No matter what you make, you better make it worth whatever it is they’re paying you, period.

Seriously. Those of us in the recruiting trenches every day know what candidates realistically expect or deserve based on our industry or functional expertise, market research and prescreening acumen. After all, it’s our responsibility to successfully negotiate salary and close offers; this is an often overlooked, but essential, part of our job. While most of our attention seems to be focused at the front end of the candidate funnel, the fact is that if at any point in the process we realize that we can’t afford a candidate, or the candidate isn’t in range for the position, we move on.

No hard feelings – it’s just a waste of time to move forward if you know their comp is out of range of whatever req you’re working to fill. This is why it’s imperative to disclose what you make, and what you’d be looking for to make a move, sooner, rather than later. While it might not be socially polite or apropos to go around telling everyone how much you make, this is information you’d be remiss to tell a recruiter, despite what Ms. Ryan and other online experts may suggest.

If you don’t feel comfortable doing so, chances are it’s not going to be a fit. If you can’t trust the recruiter to keep your compensation confidential, then you’re ultimately going to be the one paying the costs for this seriously spurious silence.

The Man Comes Around: The True Costs of Crappy Compensation.

giphy (27)It’s easy to say people work because of passion, or are willing to take less for the right opportunity, but the fact is they call it work for a reason. We’re not recruiting volunteers here, and no matter how good at negotiation a recruiter might be, if they’re way out of range it’s not going to make a single damned difference.

Cash talks, shit walks (and writes “advice” columns online). This is why it might be time to rethink the conversation around compensation. Because candidates deserve a much more candid discussion about this crucial talent topic than some bullshit blog post. Present company included.

That said, I do know enough about how recruiting works to now that I truly feel bad for the people who trust the sort of shit they read online, because while your content might be free, the costs to your readers have the potential to be otherwise onerous. Now, if you’re a smart candidate, you’ll know that it’s not only OK, but essential, to disclose your salary requirements in the hiring process, and to do so sooner rather than later.

If you don’t know what you should be asking for, there are a ton of tools out there to help you research what market rates look like and how much you can reasonably expect in an offer. This isn’t based on some bullshit blog, but a ton of objective, user generated data or historical information submitted by anonymous employers for the sake of salary studies. That’s the sort of compensation information you should be looking at online – not some blog post telling you to ignore conventional wisdom and/or common sense and refrain from discussing money matters. Because money does matter, and you’d have to be oblivious to think otherwise.

Recruiters, candidates are already researching this sort of compensation information online, which means you’d be remiss to not do your due diligence, too, and make sure that you’re always able to know what the market is paying and what experience or expertise an employer can expect based on the range of a given requisition. That’s the sort of data that you need to share with hiring managers, HR business partners and other internal stakeholders if you want to make sure you’re not only able to extend competitive offers to top talent, but to close those offers, too.

And, of course, since recruiting doesn’t end at onboarding, any candidate duped into taking a lowball offer probably won’t stick around for too long. Scrimping on salary tends to be a pretty short term fix for both parties, with the long term result being a ton of turnover, with much steeper associated costs than simply paying people what they’re worth in the first place. Of course, that’s simply too simple for most “thought leaders” to comprehend, too straightforward for them to package as a product or sell consulting services around. So, we’re stuck for now with dangerously misguided advice from dangerously unqualified, underwhelming “influencers” doing a disservice to anyone unlucky enough to come across their columns.

Candidates, if you have questions about compensation, don’t Ask A Manager or turn to some shit like Business Insider or BuzzFeed for advice. Turn to a recruiter. After all, we want you to make as much as possible. That means more money for recruiters, too – and that, my friends, is the bottom line.

For both of us.

Editor’s Note: The views and opinions expressed in this article are those of the authors’ and do not necessarily reflect those of Recruiting Daily or its partners. This post was edited for tone and clarity only and Recruiting Daily is not liable for any claims or assertions made by the author, mostly because while we believe in providing a platform for real recruiters’ real voices, we also really don’t want to get sued. Seriously. – MC

Derek ZellerAbout the Author: Derek Zeller draws from over 16 years in the recruiting industry. The last 11 years he has been involved with federal government recruiting specializing within the cleared Intel space under OFCCP compliance. Currently, he is a Senior Technical Recruiter for Oracle.

He has experience with both third party agency and in-house recruiting for multiple disciplines and technologies. Using out-of-the-box tactics and strategies to identify and engage talent, he has had significant experience in building referral and social media programs, the implementation of Applicant Tracking Systems, technology evaluation, and the development of sourcing, employment branding, military and college recruiting strategies.

You can read his thoughts on RecruitingDaily.com or Recruitingblogs.com or his own site Derdiver.com.  Derek currently lives in the DC area.

Follow Derek on Twitter @Derdiver or connect with him on LinkedIn.

 



  • Fred Pinchaux

    Great article. I fully agree with you : knowing the salary is the first step except if you want to loose your time.

    Regarding your comment “I wish some HR Business Partner would explain that one to me sometime.” I am an HR professional with 15 years of experience in different industries : bank, insurance, engineering, counsel.

    Usually, I compile compensation reports with internal wages statistics (min-max and mediane of the team) to give to the manager an overview and determine together the salary. My opinion, based on different companies, is that the salary studies are not reliable. Most of the time the salary of the employees, are at the mean or below. If the statistics were ok we should expect to see a normal distribution of the stat.
    It’s diificult to correctly assess the market :

    – I have noticed that the salary mentionned on a job offer is often overestimated. I have heard many times from candidates that their final negociations were lower than the salary mentioned on the ads. And there are lazy studies only based on the salary mentioned on the job offers.

    – I suppose that the studies done by consultant are based on their own missions realized in the year. Which means clients affording expensive fees for a hunt & I hope that they will listen their consultant. But is it representative of the market ?

    Finally, in quantity, many jobs are offered by SME with their own compensation scales. And in the trenches of SME, things are different ’cause you don’t have a budget to call a consultant and you do everything by yourself.

    By the end, I consider the internal scale, I have a global look at the compensation studies to check if the profile matches.

    Then truth comes from the candidates I will call.
    Then truth comes from the candidates I will call.
    (I wrote it twice because I consider this as a golden rule !).

    This is why I will have no time to loose with a candidate who won’t answer the salary questions. To me, it is very empirical.
    Note that I work in France so things might work differently (and also salary is a taboo in my country).

    Frédéric Pinchaux
    https://fr.linkedin.com/in/fredericpinchaux

  • Fred Pinchaux

    Regarding your comment “I wish some HR Business Partner would explain that one to me sometime.” I am an HR professional with 15 years of experience in different industries : bank, insurance, engineering, counsel.

    Usually, I compile compensation reports with internal wages statistics (min-max and mediane of the team) to give to the manager an overview and determine together the salary. My opinion, based on different companies, is that the salary studies are not reliable. Most of the time the salary of the employees, are at the mean or below. If the statistics were ok we should expect to see a normal distribution of the stat.

    It’s diificult to correctly assess the market :
    – I have noticed that the salary mentionned on a job offer is often overestimated. I have heard many times from candidates that their final negociations were lower than the salary mentioned on the ads. And there are lazy studies only based on the salary mentioned on the job offers.
    – I suppose that the studies done by consultant are based on their own missions realized in the year. Which means clients affording expensive fees for a hunt & I hope that they will listen their consultant. But is it representative of the market ?

    Finally, in quantity, many jobs are offered by SME with their own compensation scales. And in the trenches of SME, things are different ’cause you don’t have a budget to call a consultant and you do everything by yourself.

    By the end, I consider the internal scale, I have a global look at the compensation studies to check if the profile matches.

    Then truth comes from the candidates I will call.
    Then truth comes from the candidates I will call.
    (I wrote it twice because I consider this as a golden rule !).

    This is why I will have no time to loose with a candidate who won’t answer the salary questions. To me, it is very empirical. Knowing the salary is the first step except if you want to loose your time, I fully agree with you.

    Note that I work in France so things might work differently (and also salary is a taboo in my country).

    Frédéric Pinchaux
    https://fr.linkedin.com/in/fredericpinchaux

    • derdiver

      “Then truth comes from the candidates I will call.
      Then truth comes from the candidates I will call.
      (I wrote it twice because I consider this as a golden rule !).” J’aime cela!


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