These industries are more likely to screw you on pay

On May 23, 2016

In the May 24, 2016 Ask The Headhunter Newsletter, we dispense with the Q&A and explore some bad news about who’s hogging the profits.

Yes, You’re Getting Screwed

  • While the price of fuel has dropped and airlines and their shareholders run to the bank with higher returns, you pay more to sit in smaller airline seats and to arrive at your destination later.
  • Your stock broker gets rich off the higher fees you pay on your investments, while the value of your portfolio stagnates or declines.

The trend is hardly worth debating — you pay more to get less. And now we know for sure that it’s hitting your paycheck, too: As corporate profits soar, you get paid less for your work.

I love capitalism, but this isn’t capitalism — it’s greed, and it’s putting our economy and our society at risk because it’s devaluing the work you do and killing your motivation to be more productive.

greedyA banker’s story

The irony is that a guy at JP Morgan Chase — a big bank making big bucks — has spilled the beans. Bloomberg reports that JPM’s chief economist, Michael Feroli, recently published a research note that reveals — Ta-Da! — “workers’ slice of the economic pie is getting smaller.”

It’s doubly ironic because JP Morgan’s first-quarter profits beat estimates — while the firm slashed bankers’ pay. Even the bankers that are screwing us are getting screwed!

Feroli sharpens the point and explains the connection: As big business gets bigger, there’s a clear link between increasing concentration of ownership and “labor’s declining share… of the value a company creates.”

Which is the long way of saying, you’re getting the shaft while The Man gets richer. The owners of those industries make out while your paycheck gets smaller.

Sheesh — I never thought I’d find myself talking like a workers’ rights nut.

It’s worse than unfair pay

So I’ll make myself clear: While I worry about workers, I worry far more about the gross imbalance between the value of work and what people get paid to do it. Even more than I worry about tired employees’ families going hungry due to stagnant wages and salaries, I worry that American productivity and ingenuity are at risk — because who’s going to be productive and inventive if that behavior is not going to pay off?

It’s worse than you getting paid less. Our entire economic system is at risk because the concentration of ownership and wealth has reached such critical mass that it seems it’s going to destroy itself by ignoring a basic tenet of capitalism — at least according to my definition: Profits spur motivation to do more profitable work when those that create profit enjoy the rewards.

What happens when workers — at any level and in any kind of job — see where the profits are going? I think it spells trouble.

Is Feroli right?

Rather than discussing the regular Ask The Headhunter Q&A column this week, I’d like to ask you to please read Peter Coy’s short article about Feroli’s work in Bloomberg Businessweek: Rising Profits Don’t Lift Workers’ Boats.

And then, if you dare, skim a report written by Jason Furman, chairman of the president’s Council of Economic Advisers: Benefits of Competition and Indicators of Market Power. It’s dense, and one of Furman’s conclusions will seem obvious:

“When firms take action to impede competition, through anticompetitive mergers, exclusionary conduct, collusive agreements with rivals, or rent-seeking regulation to restrict entry, their profitability may increase, but at the cost of even greater reductions in consumer welfare and societal benefits.”

Feroli used this report to map where the value created by various industries goes — and to draw the troubling conclusion that…

“…industries with more concentrated ownership… pay out their extra profits to shareholders, or to the government in taxes, but not to workers.”

He notes that between 1997 and 2012, in transportation and warehousing, the “share of business accounted for by the top 50 companies rose by 11.4 percentage points,” while in health care and social assistance, it fell 1.5%. What’s telling is that between 1999-2014, in transportation and warehousing, the share of profits paid to employees fell 7.6% — the biggest drop of any industry in the study — while in health care and social assistance, employees’ share of profits rose 1. 8 percentage points.

Draw your own conclusions. Then let’s talk about whether you’re getting paid less — and whether it’s because a concentration of ownership and wealth doesn’t reward the people who come up with the ideas, do the work, and create the wealth.

This week’s takeaway

Since this is Ask The Headhunter and my purpose is to give you a takeaway to help you be more successful — here it is, based on the sources I’ve discussed above: It seems you’ll earn better pay working in an industry where there’s more competition and less concentration of ownership. So pick your job targets wisely.

Feroli’s and Furman’s work suggests, for example, that the healthcare industry pays more of its income to employees, while the transportation and warehousing industries (which includes airlines and railroads) pocket more of the profits and leave workers in the lurch.

Here’s how various industries stack up in terms of the revenue share controlled by their 50 biggest players. According to Bloomberg, Feroli’s analysis suggests “the share workers got tended to decline in industries where there’s more consolidation.” That is, when more revenues are controlled by a smaller number of firms (“consolidation”), the less that industry is likely to pay to its workers.

cea-table

Of course, being the smart little community you are, you already know which industries are the problem…

If you need help assessing specific employers, these Fearless Job Hunting books will help you with these specific issues:

FJH-5Book 5: Get The Right Employer’s Full Attention

+ How to pick worthy companies (pp. 10-12)
+ Is this a Mickey Mouse operation? (pp. 13-15)
+ Scuttlebutt: Get the truth about private companies (pp. 22-24)

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FJH-8Book 8: Play Hardball With Employers

+ Avoid Disaster: Check out the employer (pp. 11-12)
+ Due Diligence: Don’t take a job without it (pp. 23-25)
+ Judge the manager (pp. 26-28)

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How can you tip the balance back towards making your work more profitable to you — when your work is profitable for your employer? Or has our economy shifted so far that it’s going to tip over? In your experience, which industries share the wealth — and which of them pocket the profits you help produce?

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Why do job applicants insult employers?

On May 16, 2016

In the May 17, 2016 Ask The Headhunter Newsletter, an employer is miffed at a good but cocky job applicant.

Question

We received a resume which looked very good. The applicant appeared to have all the skills we are looking for, and would have gone straight to the top of the list, but the resume was submitted with an e-mail that read:

thumb-nose“If you are intelligent enough you will find that I’m everything you’re looking for and more. If you are not, then keep on looking…”

I understand people are trying to get noticed, but this comes across as arrogant and insulting. In the body of the resume, the candidate describes himself as, “Friendly, well-liked individual with a good sense of humor (at least I think so).”

If he was trying to be funny with his e-mail, he missed the mark. If he had omitted the e-mail comments entirely, he would have been called for an interview.

We are a small company and personality is a large part of what we look for in a candidate. Why would a candidate go out of their way to insult a potential employer? What are your thoughts on such bold statements when submitting resumes?

Nick’s Reply

I’ll tell you exactly why the candidate wrote that note: He’s frustrated and exasperated with employers who waste his time again and again. Perhaps not you — but it’s happened so much that he sees no risk in being so bold.

Your company may be different, but the sad story today is that employers in general behave poorly and irresponsibly when hiring. They believe that because millions of resumes are available essentially for free online, they can interview all the candidates they want without recognizing a good hire — and continue interviewing without any obligation to candidates who match requirements. (See Systemic Recruitment Fraud: How employers fund America’s jobs crisis.)

Is your company part of a frustrating employment ecosystem?

Good employers who recruit and hire thoughtfully and treat candidates with respect are rare today. I believe the problem is an over-reliance on automation. LinkedIn and Indeed have sold employers a bill of goods – “We guarantee you the perfect candidate if you submit as many keywords as possible… and if you just keep searching our database… eventually, you’ll find your perfect fit.”

Employers who buy into this nonsense start running through applicants like paper towels. This particular applicant is fed up and probably doesn’t care any more whom he offends. That’s not wise. He should stop sending out random resumes, start relying on personal contacts, and emphasize respect. But so should employers.

(To get an idea of how big this frustration is, please see David Hunt’s excellect expose, “The Perfect Fit, Isn’t.”)

I think the recruiting tools that HR departments rely on are the root of this problem. HR’s systems program job seekers to apply for any job they find. HR has convinced job seekers that it’s a numbers and key-words game.

Then the whole thing blows up. HR complains of a “talent shortage” when we’re in the biggest talent glut America has ever seen. Candidates complain they are treated like commodities. And, finally, you get a note like that. It’s silly for any candidate who doesn’t know you to suggest he’s everything you’re looking for — until you consider that you probably advertised your position using keywords. If the candidate matches all those keywords, then he’s right — he is indeed “everything you’re looking for.”

Clean up your recruiting ecosystem

So the next thing to do is look at how you recruit. Is your method fair and reasonable, or is it contributing to a form of dumbed-down “matching” that encourages job applicants to view you with suspicion?

When reasonable people — like your “top of the list” candidate — start showing their frustration, it’s usually a sign that something is wrong. Your company may not be guilty, but your peer companies may be creating a communal problem. That affects your business — so, what are you doing about it?

I give you credit for trying to understand what’s going on. Otherwise-smart employers and candidates are doing imprudent things — because they’re frustrated. The system has to be changed, and I believe it’s up to employers to take the lead, since they’re the ones who own the jobs and spend the money.

Here are some suggestions:

  • Attend a chamber of commerce meeting. Work with other employers on standards of recruiting behavior. Raise them.
  • Ask your HR team to survey other employers: How do they treat job candidates?
  • Work with other employers: Improve the employment ecosystem for everyone’s benefit.

I don’t think the applicant in question was trying to be funny. If you think he’s a good fit, I’d pick up the phone and shock him with a call — and ask him politely why he seems so frustrated. If he’s rude, hang up. But my guess is you might meet a solid, engaging person who’s just fed up with the system. He might be a gem.

(Consider the other side of this: Job applicants often interview with employers even after they’ve been insulted by ridiculous online application forms. Don’t be so quick to judge people before you actually meet them.)

I wrote so much about this because it’s a huge problem in our employment system. I think job seekers who behave badly sometimes do it because they feel abused and at a disadvantage. I’m tickled to see an employer pausing to think about what’s really going on. I enjoyed your thoughtful note. But I’d like to know, what are you going to do about this problem?

Do you get cocky with employers? If you’re an employer, how do you deal with good candidates who seem to have an attitude? Is everyone on edge because the employment system is so broken?

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New grad gets railroaded out of first job

On May 9, 2016

In the May 10, 2016 Ask The Headhunter Newsletter, a new grad becomes the fall guy for HR.

Question

I am a new college graduate (male), with only three months’ work experience. This is (was) my very first job. I am working through a temp agency that has me on its payroll. I’ve been given no training. It’s not clear who is actually my boss, though several managers give me work. I put all my heart and my enthusiasm into it. I tried to reach out for help and advice to my temp agency liaison, without any of my calls being returned.

cut-it-outThe big problem is I started to be sexually harassed by a woman co-worker. (I am gay.) This became very uncomfortable. When I finally reached my temp agency, they told me to talk to the woman and tell her (nicely) to take it easy. When I spoke with her, she seemed okay, but then she sent me a very disturbing passive-aggressive e-mail. I forwarded that to my agency and to my on-site manager.

On a Friday, both of us were called in to HR, and HR gave me the option to leave or to stay. I chose to leave as I was really uncomfortable working there anymore. We said our good-byes and I left. Nobody at my agency would return my calls. On Monday, the agency left me a voicemail stating that because of the unprofessional way I behaved and because I resigned without two weeks’ notice, they cannot represent me anymore.

If I feel conflicted about my work environment, unsafe I might say, how can I get back to work there? Shouldn’t my temp agency at least listen to my version of the story? Thank you.

Nick’s Reply

I’m sorry you had such a lousy first-job experience. I think you were railroaded out of your job by the HR department because you complained, and your agency has dumped you because they don’t want to buck their client. Regardless of who was at fault, the process for handling your complaint is clearly faulty.

While you were justified to complain, some companies just don’t like dealing with difficult situations like this. Their “solution” is to get rid of the employee who complains. That’s wrong. They should have initiated a review of what happened, and no matter who was at fault, an ultimatum is not the appropriate solution. At the very least they should have documented what happened and communicated with you in writing. Since they didn’t, they may have a legal problem.

My guess is that because you’re new to work, they figured they could intimidate you out of your job. They succeeded. Don’t feel bad – you’re still learning what your rights are at work.

Most important, what you’ve learned is that this employer and this agency have no integrity. They’re not worth working for. They’re not fair. They took the easy way out of this difficult situation.

I don’t blame you for opting to leave, but I believe you may have a legal case if you choose to pursue it. I’d start by talking with your state’s department of labor. Explain what happened, and ask for their advice about your options. It makes no sense that, after HR pushed you to leave, they consider this a case of resignation without notice!

Or, talk with an attorney who specializes in employment discrimination. I’m not a lawyer and I do not give legal advice. Some lawyers will give you an initial consultation at no charge – check that up front before you meet with one. Just make sure it’s an employment law specialist. Getting legal advice does not mean you’re going to sue – it’s a way to find out what your legal options are. Sometimes the solution is for the lawyer to send a nastygram to the employer — and a settlement is made. Sometimes it gets more complicated. Find out from the lawyer how this can be handled.

It really angers me when an employee – especially someone just starting out – is treated this way by an employer (not to mention the other employee). You must decide whether to move on or to get legal advice.

To answer your specific questions:

  • If you feel conflicted or unsafe in a work environment, stay away from it. Why would you want to go back to work there?
  • Yes, your agency should listen to your story. What they did was wrong.

If you believe you did nothing wrong, then you should decide whether you want to work with people who are doing something wrong. I’m not sure what you think would be different if your job were reinstated — or why you’d want to work with people like this. My advice is, don’t. Find an employer or an agency with integrity. And decide whether to take legal action. This may be helpful: New Grads: How to get in the door without experience.

I wish you the best. There are lots of good employers out there. It’s important to look more carefully at a company before you join up. See How can I find the truth about a company? and Get the manager’s resume before you interview for the job.

There are two big issues in this week’s Q&A — the special challenges new grads face at their first jobs, and discrimination. What did you experience as a new grad at your first job? Have you faced blatant discrimination like this employee did? What advice would you offer?

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The Intimidated Job Applicant: Pay me whatever you like!

On May 2, 2016

In the May 3, 2016 Ask The Headhunter Newsletter, a wishful job seeker tries pandering to employers.

Question

I was reading your advice about when to bring up money in a job interview. The advice from outplacement firm Challenger Gray & Christmas here in Chicago is to never bring up compensation until an offer is made.

Puppy beggingWith the job market being more favorable to employers, they suggest that getting into the dialog too early can remove you from consideration quickly. While none of us wants to waste time going through the motions only to discover the salary may be too low, it may be more important to stay in the game as long as you can, getting them to like you. It gives you more of an opportunity to sell yourself, too.

When the salary question comes up too early in the discussion by the employer, they are not focusing on what you can bring to the table. So, when they ask you what you expect to earn, I was told to respond with, “This is a great company/organization, etc. I’m sure you’ll be fair.”

This throws the ball back in their court. If you stay in the game long enough, and they really like you, you could be offered something else or better.

Nick’s Reply

So Challenger Gray & Christmas told you to warily stroke the employer and say, “This is a great company or organization, etc. I’m sure you’ll be fair.” — hoping they’re going to like you and thus not abuse you. Pandering is not a negotiating strategy.

Why am I not surprised at the advice you were given? If your employer paid CG&C to help outplace you, consider that outplacement firms get paid whether you land a job or not. It’s unbelievable that any employer would hire a firm like this to spoon-feed pablum to the people it’s letting go.

The outplacement mistake

Let’s discuss outplacement for a minute. Here’s a cautionary note from Parting Company | How to leave your job, p. 30:

Outplacement might be helpful, but never forget that you are responsible for your next career step. Don’t be lulled into thinking that a high-priced consultant — who works for your former employer — has any real skin in your future. The skin is yours alone…

Outplacement might extend your unemployment, rather than help you land the right new job expeditiously. So, take ownership of your status, and maybe put some extra cash in your pocket. Here’s how.

Some employers will give you cash in lieu of outplacement services, if you ask. (You might have to sign a release to get it. Talk to your lawyer.) This might be the best deal, and it might help you get into high job-hunting gear faster. If you decide to spend that cash on assistance from an outplacement firm that has excellent references, that’s up to you — you’ll get to choose the firm and the counselor. If you use the money to tide you over while you conduct your own job search, that’s also up to you.

It helps to understand how the outplacement industry works. This is from Fearless Job Hunting, Book 3: Get in The Door (way ahead of your competition), pp. 12-13:

Big outplacement firms have a business model. Their objective is not to help you land a good job. The goal is to sell multi-million dollar counseling contracts to big employers that are downsizing. Almost by definition, your individual needs cannot be met by the packaged services these outplacement firms sell. If they really wanted to help you, they’d arrange personal introductions to managers who need you. They don’t do that, because that won’t win them a new gig. To win big contracts, these outplacement firms have to demonstrate a cookie-cutter process for handling thousands of newly-unemployed people. Their clients buy that process, and the more structured it looks, the more it appears to be worth… It’s too generic to work.

The last thing you need is a cookie-cutter approach to job hunting. If you want to stand out, you must make it personal. And that takes time, careful thought, and diligence. Every situation is unique, so these packaged methods you’ve been given aren’t going to work.

Outplacement that someone else chooses for you and pays for could be the biggest mistake you make when trying to land a new job after you get laid off.

Wishful thinking is not business

Let me explain why that lame, over-used response would reveal you to be naive and unsophisticated. It tells the employer that (1) you don’t know what you want or are worth, and that (2) you don’t know how to negotiate.

How businesslike is that?

Let’s say you were applying for a top sales position, and the VP of Sales asked how you’d respond to a prospective customer who asks, “How much do you want me to pay for what you’re selling?” Suppose you gave the CG&C response: “You’re a great company. I’m sure you’ll be fair.”

The VP would never hire you because you’re failing to negotiate by communicating the value of your product. You’re pretending the other guy will figure it out. If you worked for him, he’d fire you — and I’d compliment him.

Wishful thinking is not a sales strategy or a negotiating strategy. It’s childish, naive, and dangerous.

CG&C’s response is canned, silly, thoughtless and nothing but a sign that the applicant has no business in a job interview. Please: Don’t do it.

Negotiating is not a game of appeasement

Many job seekers are intimidated in interviews. And a common, visceral response to intimidation is to appease who frightens or intimidates  you. Trying to be likeable is a childish form of appeasement.

dog bonesIf you think trying to be likeable and saying “I’m sure you’ll be fair” will help you “stay in the game” longer, you’re going to lose because the employer will take advantage of the fact that you invested all that time — and correctly surmise that you’re going to take whatever they offer you. This is one of the oldest psychological tricks used in negotiating — look up cognitive dissonance. People have a tendency to rationalize and accept lousy job offers because they’ve spent so many hours in interviews.

There’s another side to this. If you continue interviewing while knowing an offer is not likely to be in your acceptable ballpark, and then you try to “sell” the employer on a much higher salary, do you really think they’re not going to get upset with you for misleading them?

Don’t play games so you can “stay in the game,” because interviewing and hiring is not a game.

  • Learn how to calculate what you’re worth, so that you’re prepared to ask for a compensation range you can defend. That demonstrates you know what you want. (See How much money should I ask for?)
  • Learn how to ask the salary range of a position before you invest in interviews — that’s how to establish your negotiating position. It also shows the employer you’re not counting on being likeable; you’re prepared to demonstrate your value and to justify what you’re asking for. (See Ask this question before you agree to an interview. Yes, CG&C is so wrong that you should explicitly talk about money even before going to a job interview!)

You’re not a puppy. You don’t need to be meek and likeable so an employer might throw you a bone. I think Challenger Gray & Christmas are wasting your time and that of the employers you’re talking to — not to mention wasting your old employer’s money.

Do employers intimidate you in job interviews? Are you ready to state what you want? Do you ask what the employer is ready to pay? Have you used outplacement services? How did it work out?

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