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The insider's edge on job search & hiring™

Monthly archive for February 2017

Should I quit before finding a new job?

Quick Question

quitWould you ever advise quitting a job before having another one lined up? I have completely lost faith my employer and job and I fear getting fired or worsening what’s left of my relationships here. I’d like to quit now. Is that a bad idea? Thanks.

Nick’s Quick Advice

People do it all the time — they quit their job before finding a new one. I suggest taking a little time to think it through. Emotions can carry us away and lead us into poor decisions. Time has a way of separating our feelings from the facts. (See Is it time to quit my job?) I’m not saying you should not just up and quit — that’s up to you.

There’s also the “how” of quitting to consider. For more about this, see Quit, Fired, Downsized: Leave on your own terms. Make sure you control your exit and that “the door doesn’t hit you on the way out.”

Think before you quit

But if there’s no urgent reason to act now, pause and:

  • Consider what options you really have, and,
  • Map out the possible consequences of whatever you decide.

That is, is quitting your only option? Can you transfer to another job or department or company location that might solve your problem? And, if you quit suddenly, how will that affect your life?

Here are some other questions to consider:

  • Can you afford a protracted unemployment if you quit without a new job?
  • Do you have enough savings to tide you over for 3-6 months — or longer?
  • Do you have good job prospects that you could develop quickly?
  • Considering the area where you live and work, are you job hunting in a field where being unemployed will affect how you’re perceived in job interviews?
  • Will being unemployed help you devote the necessary time to job hunting? Will it improve your state of mind?

Depending on your answers, quitting immediately could be a good idea. But only you can make the judgment.

Unemployment bias and misery

As a headhunter I’ve never worried that a good candidate was presently unemployed — but some headhunters, recruiters, HR people and employers have a bias against unemployed people. It’s goofy — it reveals that employers and recruiters don’t trust their own judgment of a person’s value, and they don’t know how to identify discounted value that they can capitalize on. But you may find yourself dealing with that bias.

If you’re planning to get a new job through strong personal contacts, those contacts may have enough positive data about you that irrational biases won’t affect you.

The flip side of bias against unemployed job seekers is bias against demoralized, discouraged and unhappy job seekers. If staying at a miserable job while you’re interviewing for new jobs renders you ineffective, then it may be better to just quit and get excited about getting that new job!

I don’t offer quick and easy answers because there are none. My mentor taught me long ago: “Use your judgment, and do the best you can.” Focus on the two bold-faced words. Think about the benefits and risks, and go from there. I really think that’s how to go about it. I wish you the best.

(If you’re going to quit, do it right. Take a look at the topics list for my PDF book, Parting Company: How to leave your job. How you leave can affect a lot of things you may not be aware of.)

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WANTED: Top talent to work for dog food

In the February 28, 2017 Ask The Headhunter Newsletter, the talent (a nurse) would rather walk dogs than work for kibbles and bits.

talent foodQuestion

There’s no skills shortage, no matter what anybody says. If there’s a shortage why am I working as a waitress making more than I could nursing, which I’m certified in? I have a college degree, because I was told it was necessary in today’s market to compete. One interview after another is a waste of time. HR tells me I “look good” and to expect a call. And the permanent and contract offers I’ve gotten — I could walk dogs and make more. There’s so much talent that hospitals just wait for somebody who will work for peanuts. And they are rude. Does anybody want to hire an experienced RN for a living wage?

Nick’s Reply

Two reports from the Pew Charitable Trusts issued late last year tell us a lot about the problems you’re describing — but you’re not going to like what they say:

Imperfect candidates need not apply

A lot of healthcare facilities need experienced RNs (registered nurses) and require degrees. But they don’t want to pay for your degree and experience. I suggest you send a few quotes from Pew to your legislators.

“Hospitals, nursing homes, home care agencies and doctor’s offices, like a lot of employers across the country, have a specific resume in mind. Employers often want new hires to have experience in a specialty such as operating room nursing.”

They’re looking for perfect candidates. (See The Training Gap: How employers lose their competitive edge.) The problem is clear: Employers don’t want to invest in training, on-the-job experience and development, or in a learning curve. They want someone who’s been doing the exact job for three years already. The question is, why would someone like that change jobs just to get the exact same job?

Where are competitive wages?

Pew offers a suggestion that healthcare administrators should be spanked for pretending not to understand:

“A long-term solution for the nursing workforce also would have to resolve critical pay issues, including whether Medicare and Medicaid fee schedules support competitive wages, and figure out how to make sure nurses don’t get burned out and quit.”

Pew also addresses another common problem:.

“Employers also have a retention problem. Being a nurse is demanding, and new nurses, like new teachers, are particularly likely to leave their jobs: About 20 percent of new nurses quit within a year, according to a 2014 study.”

Duhhh… Do you think it has something to do with the fact that you can make more money waiting tables at a good restaurant? (For tips about negotiating a job offer upwards if you manage to get an offer at all, see Negotiate Even The Worst Job Offers: Say Yes, IF.)

Meatball management

This is not a problem just in healthcare. The Pew reports cover all kinds of jobs, and reveal that employers across industries are eyeing talent they want but refuse to pay for it.

“To [the head of Minnesota’s Labor Market Information Office] … the focus on work experience suggested that employers were being too picky. They wanted to hire someone who could be fully productive on day one. But at the same time they weren’t willing or able to pay enough to attract that perfect candidate.”

There’s that problem again: Cheapskate employers.

An accounting manager told me last week that his company — whose business and profits are “growing like gangbusters” — has a customer support staff of seven. “We really need 15 just to support the customers we already have,” he complained. “But it’s impossible to find qualified people.” I asked what the job pays. “$7.50 an hour,” he answered. “Our turnover is over 20%. It’s terrible.”

No kidding.

Pew suggests businesses’ eyes are bigger than their budgets. But it seems the real problem is a kind of cognitive deficit in the ranks of management.

“It’s worth noting that employers can’t always diagnose their own problems. Only 22 percent of employers surveyed by Utah’s Department of Workforce Services last year named low wages as a hiring problem, but 68 percent of those employers were offering below average wages.”

Someone is thinking steak, while budgeting for meatballs.

“We want college degrees we don’t need!”

Then there’s the claim employers make that today’s workforce just isn’t well-educated. Or, is it possible that employers want more education than jobs require?

Pew hits the nail on the head again:

“The overwhelming majority of open production jobs across south central Minnesota don’t require a college degree, in fact. Nor do almost two-thirds of openings statewide.”

Yet employers ask for a degree — just because they can. It used to be a nurse needed only a certification to get a job in a hospital. It seems now hospitals want education they don’t need — but aren’t willing to pay for.

Reports Pew:

“In New York, for instance, there are more licensed RNs in the state than there are jobs for them. So employers are raising the bar, saying, ‘Hey, if I can get a [nurse with a] bachelor’s degree, why not?’ said Jean Moore, director of the Center for Health Workforce Studies at the University of Albany.”

WANTED: Top Talent Cheap!

So there you have it. The Pew Charitable Trusts suggest employers are the problem, not nurses, or anyone else. While more training and education can certainly be beneficial to anyone who wants to excel in their line of work, it seems employers think training, education, and talent shouldn’t cost much to hire.

I wish I could give you an answer to your problem. And I wish the Pew reports covered the other elephant in the room — recruiting tools used by employers that make it easier to reject good applicants than to hire them. For more about that, see Employment In America: WTF is going on?

Meanwhile, what are we going to do about cheap employers?

Is there a talent shortage, or a shortage of good pay for good workers? Are modern, automated recruiting systems the solution, or do they just make it easier for employers to reject imperfect job applicants who won’t work for peanuts?

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Recruiters: Raise your standards or get out

In the February 21, 2017 Ask The Headhunter Newsletter, a reader asks how to test recruiters, and hangs up on them.

Question

recruitersI keep getting random e-mails from recruiters. I have finally hit the breaking point and now I have a new response: “Thank you for your interest. I am not searching at this time. In addition, I work only with hiring managers, never a recruiter.”

Am I being arrogant or even cocky? I mean, people are writing to me about jobs where I do not see a good fit. I have only worked with one good headhunting firm, but they usually only deal with positions 2,000 miles away from me. (They placed me twice when I lived near them and I did very well in both positions.)

On one hand, I don’t want to burn bridges, but on the other hand, as a 51-year-old engineer who plans to continue working for as long as I can, the positions I look for are not going to be listed on monster.com — they are going to come about through people I know. I want to know what you think. Is there a good way to test recruiters?

Nick’s Reply

You’ve given me an opportunity to say something to recruiters, also known as headhunters. I’ve wanted to say it a long time: Raise your standards, or get out of the business. The rest of us are sick of you.

But first let’s get to your problem with recruiters.

If they’re e-mailing you about the wrong jobs, they’re not recruiting you. It’s called spam and it’s generated by software. That’s the first way to test recruiters. (See Help! I’m a floundering headhunter!)

A good headhunter knows how to contact you properly, how to get your attention honestly, and what kinds of jobs to bring to you. You would be worth tens of thousands of dollars to a headhunter. Why would he trust an e-mail? Good headhunters call you — they don’t e-mail. That’s the second test.

The rest of those “recruiters” are finding your name or profile on LinkedIn, running a key word match, and pushing a button — or using an app — to send the same mail to thousands of people. (See Good Headhunters: They search for living resumes.) I wouldn’t be afraid of alienating recruiters who don’t even know who you are! If they knew you, they wouldn’t waste your time, as you’ve already noted:

“the positions I look for are not going to be listed on monster.com — they are going to come about through people I know.”

Test recruiters

So here’s the most important test. When a “recruiting” mail or call comes in, do you know the person? No?

BAM. Delete or hang up. It’s a blind solicitation. When the Publisher’s Clearinghouse is ready to give you a prize, they come to your door with a check. They don’t e-mail you.

In fact, that’s a very good analogy. Consider this warning from The Balance about scams purporting to be the Publisher’s Clearinghouse contest:

“Although PCH’s sweepstakes are legitimate, you still need to be very cautious if you receive a prize notification from PCH. Like other big companies (including Reader’s Digest, Heineken, and more), scammers try to seem more legitimate by sending letters or e-mails that claim to come from Publishers Clearing House. These scams can look official, but they are not backed by PCH.”

In the recruiting world, you must ask yourself, “Is this recruiter backed by a real employer?” That is, does the recruiter have a contract to fill jobs for an employer? If you don’t know, or don’t ask for proof, then you’re either wasting your time or being scammed. Most recruiters are not for real because they’re not really recruiting for an employer. If they find a willing candidate with good credentials, they will then shop you to thousands of employers like they shopped a job description to thousands of e-mail addresses.

I think you get it. You don’t need my permission to delete junk mail. (See How to judge a headhunter.)

If a solicitation intrigues you, here’s how to test recruiters you don’t know.

How to Say It

“Who is the employer?”

If they won’t tell you, I’d hang up. Don’t bother with excuses about how it’s confidential. Either the recruiter wants to do business or doesn’t.

“Are you employed in the HR department of the employer whose job you’re trying to fill? Or, are you a third party?”

If they’re a third party — that is, an independent recruiter, headhunter or search firm — that’s not a bad thing. But you need to know whether they’re legit. And there’s just one way to determine that:

“Can you give me proof you are authorized to recruit for the employer?”

That’s right: Make them prove they recruit for the employer. How? I’ll tell you in a minute. A legit recruiter can prove it, and you’ll know when the proof is presented to you.

You’re not the only Ask The Headhunter reader who complains they’re fed up with jerks pretending to be recruiters. I hope that helps. 51-year-old engineers are pretty smart. Trust your judgment.

Recruiters: Raise your game

Now let’s get back to what I really want to talk about, thanks to a reader who’s brought up the problem. And it’s a huge problem. Employers, job boards, ATS vendors, the HR profession, LinkedIn, Indeed — the entire bloated employment system turns a blind eye and tacitly ignores this problem for the sake of making money:

Most recruiters suck.

If you’re a typical recruiter, I’m sure you’d like to smack me upside the head for the advice I just gave the reader who asked this week’s question. You’ll argue that you can’t just disclose the identity of all your clients when you’re recruiting — not until you’re sure the candidate is right for the job. You’ll argue that there’s no documentation you can show the person you’re calling, to prove you’re authorized to recruit for the employer.

Bunk.

Do you suck?

If you’re a good recruiter or headhunter, you know what a mess the employment system is. You know you face staggering competition from unsavory recruiters who pollute the pond you’re trying to work in — recruiters who suck. So it’s up to you to raise the standard of conduct when you solicit people for jobs.

Show them you stand out:

  • Be ready to disclose what company you’re recruiting for.
    Sound risky? Figure it out because if you don’t, it’s going to cost you business. People are fed up with a corrupt, smelly recruiting industry. Rise above it. Be the recruiter who answers the question, because the candidate needs to know.
  • Be ready to show proof you recruit for the employer.
    Yep, I know this is a new idea. Adopt it. You don’t need to show anyone the recruiting contract you have with the employer. That’s confidential. But get a letter from your client that states you’re authorized and under contract to recruit for them — and arrange a confirming call with your client if necessary. Or, consider yourself no better than the scum who are competing with you, dialing for dollars, wasting talented people’s time.
  • You say you don’t want to disclose who your client is…
    …until you’re sure the candidate is worthwhile? Then you’re not doing your job. Your job is to check people out before you contact them. If they’re not worth disclosing your client’s name, then they’re not worth calling. Do the hard part of your job first — vet people before you expect them to invest their time with you. It’ll raise your game.

If the best recruiters and headhunters raised the standard of recruiting on just those three points, the whole system would change for the better. Seasoned, desirable engineers and other professionals like the one who submitted this week’s question would be a lot easier to work with with because they’d be able to trust the person calling them. But that trust has to be earned. Otherwise, you’re just a spammer and the person you’re contacting should delete your e-mail or hang up. Get out of the business!

If you’re a good recruiter, how do you make it easy for people to know that? If you’re getting calls from recruiters, how do you test them? What other sound, reasonable rules of conduct would you like to see recruiters obey?

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Referrals: How employers waste proven talent

Quick Question

How far down the employment ladder do the Ask The Headhunter principles of the job market go? Do personal referrals and recommendations help at all levels?

referralsMy daughter worked an entry level position for a clothing chain in New York, and left to move to California.  Her three managers each wanted her to stay, and said they would act as references, because she showed initiative on the job. Since she did what needed to be done instead of just what she was told to do, they wanted to keep her with the company, even if not in their store. She followed the chain’s instructions, and brought a completed application to a store that has openings in California, according to their website. Despite that, they told her they don’t have openings.

Does the principle of getting a position by being recommended by someone known to the manager apply even at this level? Or do stores fill half their entry level positions with people they don’t know?

Nick’s Quick Advice

Your question is about how your daughter can get a job using insider referrals. But the real story here is how employers waste proven talent. First let’s help your daughter get the job.

I think hiring by insider referrals is actually more likely with lower level jobs than higher level, simply because it’s not very risky. Even if the manager makes a mistake, it’s not like they just hired a pricey executive.

  • It’s faster. If the employer has good information about a candidate, it’s just a quicker hire.
  • It’s easier. Because lower-level jobs attract lots more applicants than higher-level jobs, the employer usually loves to avoid culling through thousands of applicants. Hiring by trusted referrals is much less work.

Lazy referrals

I think your daughter didn’t get invited for a job interview because her old managers are lazy. It sounds like they urged her to apply at the new location because they think so much of her, and offered to be references, but it ended there. They basically told her to apply like thousands of other people would.

Those managers didn’t pick up the phone to call managers at the California location to actively recommend her in advance of her applying. That means they did nothing.

If they want to help her and help their company, they should pick up the phone. Their offer to be references — after she applies, and after she’s selected for an interview, and after someone in HR asks for references — is meaningless. References aren’t referrals.

How to Say It

If I were your daughter, I’d contact her old bosses, tell them what happened, send them copies of the open job postings, and say this:

“Your faith in me and your recommendation to the California store mean a lot to me. Would you please call the manager of the store in California, explain your thoughts about me, and suggest she or he interview me? Your call will make me stand out among other applicants they don’t know — and it will help them fill the job faster and with less work.”

What I really want to suggest she say in the last part is, “…it will help them fill the job faster and with less work, you dopes!” But of course, she should not add that.

How employers waste proven talent

Here we have an employer that has valuable, proven talent in hand, ready to fill another job in the organization, but doesn’t even know it, because its managers don’t truly understand what that means. It’s partly due to the managers at the old store, and partly due to the company’s failure to actively promote internal employee mobility.

If those three managers won’t do as your daughter asks, then they’re not helping your daughter, and they’re hurting their company. Wasting talent is worse than letting people steal clothes off the rack. See References: How employers bungle a competitive edge.

I hope your daughter makes that call and I wish her the best.

Have you ever gotten a new job in your own company with a solid internal referral? Have you helped someone in your company make an internal move?

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Topgrading: Employers looking for liars

In the February 14, 2017 Ask The Headhunter Newsletter, a reader discovers topgrading and the A, B, Cs of hiring.

Question

As an employer and interviewer I’ve been reading about topgrading and would appreciate your thoughts and expertise on this topic.

  • How familiar are you with it?
  • Have you performed many topgrading interviews?
  • Have you seen many companies using it? How well did it work for them?
  • Do you know any topgrading experts I could connect with and learn from?

topgradingNick’s Reply

I don’t have to drink cynicism to know it’ll poison me. And I think topgrading is as cynical a way to assess job applicants as any job-interview tool you’ll encounter.

Topgrading was invented as a selection technique by Brad Smart at General Electric, during the tenure of “Neutron Jack” Welch, the CEO who invented stacked ranking of GE employees. It’s hard to tell which idea was the parent and which the evil spawn.

Also known as “rank and yank” and “forced ranking,” stacked ranking  was how Welch routinely got rid of 10% of his workforce. Managers were forced to rank all employees and to fire the bottom 10% — supposedly the weakest ones. As you can imagine, a team of top workers runs paranoid when everyone knows 10% will be cut regardless of how productive they are.

In other quarters, the practice is known as an HR Witch Hunt.

Topgrading is really nothing more than stacked ranking applied before hiring.

I’ve never performed a topgrading interview because I want to go to heaven. And I don’t have clients that use it because I wouldn’t subject my job candidates to it. If you want to find a topgrading expert, you’re on your own.

What is topgrading?

It’s worth understanding what topgrading is, especially if you’re going to be subjected to it when you’re applying for a job.

Like stacked ranking, it assumes that there are three kinds of workers. A people, who are worth keeping or hiring. B people, who aren’t. And C people, who have a kind of corporate leprosy or pellagra and will infect your A people if you let them in the door. (Don’t worry, there’s a way to keep them out — we’ll get to it.)

If you view the world as A, B and C people, you have no business in business. You’re a cynic who likes everything neatly labeled, and who likes things that don’t change.

The other big idea in topgrading is that you can figure out who’s an A, a B, and a C. Of course — here it comes — you can pay Topgrading, Inc. to learn how to separate the As from the Bs and Cs. The company claims its sorting method yields 75% A hires.

If you believe that, you probably have a stockbroker whose stock picking method delivers 75% winning investments. Which means you lost all your money to Bernie Madoff.

You might well ask, if Topgrading delivers 75% A hires, why isn’t every company using it? You might well ask.

A bad attitude

Ranking people to identify who will and won’t succeed isn’t so much a mistaken idea as it is a bad attitude.

Topgrading is based on a cynical premise — that candidates lie in job interviews. That’s a hoot coming from the guys who invented it — interviewers from GE who fooled loads of companies into using stacked ranking.

I’m not a fan of tricky interview methods. It would be interesting to see a corresponding methodology that attempts to identify employers who lie in interviews, and when they’re recruiting.

Consider what Topgrading, Inc. says to managers who’d like help hiring more effectively:

  • “there’s no verifying if candidates tell you the truth”
  • “Topgraders hire A players most of the time using because they use the ‘truth serum’ technique”
  • “It is an inexpensive tool that scares away low performers”

It sounds like a panacea for managers who believe most job applicants — non-A people — are liars that need to be scared away. Perhaps an effective sorting technique for companies is to look at which managers want to use topgrading, and fire them to get rid of the cynics.

The big idea

There’s just one big idea in topgrading: a technique used to expose all the liars who apply for a job.

Topgrading, Inc. calls this big idea “Threat of Reference Check” or TORC. It’s simple. You threaten all job applicants with reference checks before you even let them in the door. Here’s how they explain it:

“Because candidates know they will arrange reference calls, they tell the whole truth. And finally, you verify everything by talking with bosses (and others YOU choose); there is no phone tag because candidates arrange those calls.”

Get it? This threat “scares away low performers.”

An HR exec unloads on topgrading

Mike Smith is an HR executive in the San Francisco Bay Area who produces a blog called Back West. He rips the heart out of topgrading in Talent Wars: The “A” Player Hoax.

Smith says topgrading is a lie, and cites “performance research wonks” whose work suggests topgrading is simplistic:

“The prevarication that success comes to companies that systematically hire and develop only ‘A’ players is twofold:

  • “One, that talent is innate and that you really can’t do much to develop the 65% of your workforce that are “C” players, and
  • “Two, that filling your roster with all stars – and forgetting about things like right role, right culture, right boss and workgroup – is the simple (although it’s simplistic) fix.

Smith offers this caution to gullible employers: “Performance, both with individuals and organizations, just doesn’t work that way.”

The stack crashes

I think the best evidence that topgrading is crap lies in the highly publicized crash of Neutron Jack’s stacked ranking.

In 2014 The Wall Street Journal declared, “It’s Official: Force Ranking Is Dead.” The HR blog, Namely, tells how GE settled a $500 million lawsuit alleging forced ranking was biased against women. Yahoo! got sued over a claim that forced ranking was rigged — against men. In 2015, The Atlantic ran story about How Millennials Forced GE to Scrap Performance Reviews.

It turns out you can’t invest your money using a special method that ensures 75% of the time you’re going to win. And you can’t ensure 75% of your hires will be A people because, well, there’s no such thing as A, B and C people — or a way to separate them into bins.

Topgrading ranks right up there with Jack Welch’s two-dimensional vision of how to manage people — “rank and yank.”

There are far better, more direct ways to assess job candidates. For example, invite them into live, working meetings of your team, and watch how they behave and perform. (See Big Data, Big Problems for Job Seekers?)

Run

The prevalence of indirect job candidate assessment methods like stacked ranking and topgrading has led management in America off a cliff. Perhaps it’s because managers expect just-in-time, perfect hires. They have no idea how to develop and invest in their employees. If they did, they’d know how to find them and interview them, too. (See HR Technology: Terrorizing the candidates.) If managers were looking for talent, they wouldn’t be using techniques that focus on finding liars.

If you’re a job seeker, and a company tells you it does uses topgrading interviews, I think that should tip you off to find out whether management also practices stacked ranking — openly or surreptitiously. If it does, my advice is, Run. It’s not healthy to work for cynics. Find an employer that respects you. (See Smart Hiring: A manager who respects applicants, Part 1.)

Have you been topgraded, sliced, diced and cut from the list? Ever been stack ranked, yanked and jerked around? Ever interview with a company that assumes you’re a liar? If you think tograding is a great idea, tell us the A, B, Cs of how it works for you.

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Why employers should make higher job offers

In the February 7, 2017 Ask The Headhunter Newsletter, a reader marvels at employers who discount job offers to save money.

Question

job offersI worked as an intern while in college, and after graduation they offered me a job. It was my first experience negotiating higher job offers. I discussed my proven performance and gave examples that demonstrated my value. The employer granted me the higher salary.

My advice to others is to capitalize on your value and have the courage to negotiate for what you think you’re worth. Of course, your value may not be viewed as high as you think. That’s okay. Just weigh the pros and cons of the position along with your needs and make a decision. Either way, keep in mind, it’s up to you.

But here’s what’s interesting. After I accepted the position, I went back to the hiring manager and asked why he offered a lower salary to begin with. He responded, “If you had accepted the lower salary, I would have saved $3,000 a year.” What do you think of that?

Nick’s Reply

It’s astonishing is how casually the hiring manager responded that he’d save money if you had accepted a lower job offer. On its face, that might seem like simple market economics. But there’s a profound fallacy underpinning the manager’s behavior.

Salary is not an expense to a company, though that’s how accountants portray it, and everyone accepts that. What a company pays you is an investment. And that’s not semantics. A company buys a piece of equipment as an investment against an expected return — and capitalizes it. An employee is capital, too — the employer expects an ROI (return on investment). The fallacy is that an employer can save its way to higher returns by making lower job offers.

Of course, with machines or people we want to pay less to maximize our ROI. But neither is simply an expense.

The value of higher job offers

All my life as a headhunter I’ve encouraged my clients to offer a desirable job candidate more than the candidate asks for or expects. The reason is simple.

Unlike machines, people perform better when motivated. So, when a candidate expects $75,000, offering the candidate a totally unexpected $78,000 triggers an incredibly valuable response: enthusiasm and motivation. Even gratitude. For an extra 4% investment, the employer will likely get far more than a 4% higher return.

However, when they offer less, I think employers suffer with a far lower ROI than the salary savings might suggest. (Maybe you’ll argue with me; that’s what the comments section below is for.)

Managers like your new boss may think they’re being rational by offering less to save money. They’re missing an opportunity to get a higher return. Salary isn’t an expense. It’s an investment. Done right, investing more returns more.

(See Goodbye to low-ball salary offers.)

Why employers hire

Remember: We’re saying the employer really wants to get that very desirable candidate on board. (What other kind of candidate would the employer hire?) So why not maximize both the chances the candidate will accept the job and the potential return by making a higher job offer to prove it?

Nobody ever worked harder or more enthusiastically because a company low-balled them.

But I don’t want to skip over the reality. I parenthetically asked what other kind of candidate an employer would hire, if not a very desirable one. I think much of the time employers hire like they’re checking off boxes and plugging holes in leaky companies. They aren’t thinking about boosting the bottom line by making a really good hire.

And that’s why they see no value in higher job offers, but are proud of saving money when candidates accept lower offers.

In my book, Keep Your Salary Under Wraps: How to say NO when employers demand your salary history, to make them say YES to higher job offers, I quote an HR manager who sent me an astonishing complaint about my advice that job seekers should never disclose their salary history. She said:

“Employers want your salary information because they believe that if you apply for a job that starts at $50,000, but you made $30,000 in the same sort of job at your last company, they’d be overpaying. They’d want the opportunity to buy you for $35,000 to start, saving them $15,000. The HR person who does that gets many kudos for their shopping moxie from their boss, and gets to keep their job and go on many more shopping trips.”

Many managers don’t hire to make more money for their companies. They hire to save money for their companies by using less of the hiring budget. As if the purpose of the hiring budget was to save it!

I believe treating salary as an expense makes it far easier to hire and fill jobs. If the outcome of hiring and filling jobs were measured on ROI, most HR managers and hiring managers would be fired.

I wonder how many CEOs and boards of directors realize their accountants and HR departments are saving their way to higher profits!

Nice work!

I realize your main point is that you succeeded in getting a higher offer not by just asking for it, but by demonstrating your higher value. Nice work! (See The ONLY way to ask for a higher job offer.) Your story delivers a valuable lesson to others.

But I was tickled by your new boss’s suggestion that if he’d paid you less he’d have saved money. My guess is you’ll work harder than the extra three grand cost him — and he’ll make more money.

Am I nuts?

Why should anyone pay a job candidate more than they ask or expect? Is a candidate really more likely to accept a slightly higher offer? Will a bit more money motivate better work? I can’t prove it objectively, but I think yes.

What do you think? Does that little boost in an expected job offer pay off? Is salary an expense or an investment? Has an employer made you a bigger offer than you requested or expected? Did that make you more productive?

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