2 Rules About Working for Start-Ups

In the July 21, 2015 Ask The Headhunter Newsletter, a reader is in a pickle — er, start-up — without a salary, and without protection on the upside or the downside.

Question

Your advice in the newsletters is brilliant. However, I haven’t seen you say much about start-ups. I’m in my 50s and enjoy the chaos of a new company. I have been doing it for nine months, and I love it. I am not getting paid, or receiving any benefits. The company has been getting exposure, and a few small projects, but no investment backing. That means no money. The CEO continues to tell the development team, the editors, and writers that “we are so close.”

bait-and-switchShe also mentioned they are moving to Silicon Valley, but will be using distributed-teams software to push more projects out.

The problem is that my budget and time are expanding. I am worried that my “job” will be lost by their move. I have only a handful of e-mails outlining the stock certificates, with promises of full-time employment when investors come through. However, I have nothing legal or tangible to suggest they are serious.

I’m ready to quit, but need some guidance. How do I approach her about my concerns without questioning her integrity? Should I suggest several options that have some legal teeth that protect me? So far I have all the risk while she continues to pump out projects. Thanks!

Nick’s Reply

There are two good reasons to work at a start-up:

Why work for a start-up?

One, you’re an owner with ironclad shares that cannot be diluted without your approval. If the company takes off, you’ll get your reward. If it doesn’t, you at least had a deal that protected your upside.

Two, you’re an employee being paid a fair (if not good) salary, and you’re expected to work hard over and above anything resembling “reasonable” — because you have some shares and stock options as a reward if the business takes off. Your salary protects your downside.

If you’re working at a start-up under other circumstances, I’m sorry to tell you that you’re probably a chump — unless you’re independently wealthy and love that kind of work.

I’ve got two rules for working at start-up companies.

Rule #1: Don’t get screwed

star-wars

I love start-ups. Been there, done that, had great experiences… except the time I got screwed because I had nothing in writing. When the founder decided to bring in other investors, my 250,000 shares were instantly diluted down to virtually nothing. (See Start-Up Stock: What’s it “sort of” worth?) The first rule when joining a start-up is don’t get screwed. Invest in legal and accounting advice to protect your up- and downside.

Let’s discuss how to handle your boss. You’re being naively nervous about offending a founder that you’re giving free work to. It’s time to make it legal.

I’d sit her down without any apologies and without hesitation in your voice.

How to Say It
“I’m excited about what we’re doing and I love the work. However, this is a business proposition — I’m working for free for equity and the promise of a full-time job. I think it’s time we put this in writing for our mutual protection.”

If she indicates any problem with that, then I think you’re being taken for a ride, and that you’ll be summarily dumped by the side of the road. She should be apologizing to you and extending every courtesy — you’ve been working for free with no written assurance of any reward!

You might want to talk with other “employees” to see how they feel — and to find out whether they have contracts. You all need them. You may want to speak with her as a group. But in my opinion this has already gone too far. You’d be pretty upset if she took advantage of all of you at this point — so don’t fret about having this discussion.

Rule #2: Don’t get screwed

Before you do that, I’d talk with an attorney. (See Employment Contracts: Everyone needs promise protection.) Equity deals and contracts with start-ups are complicated and fraught with risk. If it’s not worth the legal fee, then how can the promise of this job be worth anything? Please take this seriously.

The other issue is that if and when investors come in, your boss will have very little to say about your equity share. Investors don’t like seeing their shares diluted. You could wind up with very little, if anything, if you don’t have a solid contract now — and the right kind of shares.

I don’t mean to scare you, but I’ve seen this again and again. Even a well-intentioned founder can wind up hurting the team that poured its blood and sweat into the business. Working with no contract is totally imprudent and un-businesslike. I’d get to it asap. Did I caution you not to get screwed?

Don’t forget about IP (Intellectual Property) rights. Have you signed an NDA or NCA? Have you signed over any IP rights to anything you’ve developed? Your boss could be screwed, too, without these. It’s another reason you need a good employment lawyer.

Get compensated

My philosophy is, get value for value. Your work is valuable. Ask for salary, and ask for equity. I don’t think suggesting “several options that have some legal teeth” will help you unless you talk to a lawyer first. This is easy: Just tell her it’s time for a written, signed agreement — and stock certificates. Something tells me that’s when she’ll tell you you’re not part of the move — though I hope I’m wrong.

Before you quit, give your boss a chance to protect your investment in this business by compensating you fairly for the risk you’re taking. Get compensated. That’s not a rule; that’s good business. Do your best to prepare yourself in advance. These Ask The Headhunter PDF books will help you with your “boss”:

Fearless Job Hunting, Book 6: The Interview – Be The Profitable Hire. This works even when discussing salary with your current employer!

Fearless Job Hunting, Book 7: Win The Salary Games (long before you negotiate an offer), especially “The Pool-Man Strategy: How to ask for more money,” pp. 13-15. Sometimes it helps to ask casually!

Fearless Job Hunting, Book 8: Play Hardball With Employers, especially “Due Diligence: Don’t take a job without it,” pp. 23-25. This is a must when considering a job at a start-up, though this section applies to established companies, too.

Fearless Job Hunting, Book 9: Be The Master of Job Offers, especially “Non-Compete: Did I really agree to that?”, pp. 5-7.

There’s a lot more to start-ups, of course. (See Ben Slick’s excellent article, Evaluate a Start-Up Job Opportunity Like a Venture Capitalist.) If something I’ve said is helpful, I’m glad. I’d love to know what you decide to do and what comes of this. Thanks for your kind words about Ask The Headhunter!

For those considering the excitement of working at a start-up, if it’s what you really want to do, don’t be dissuaded by risk. As this reader points out, it can be an exciting experience. Just follow my two simple rules, and make sure you protect yourself on both the upside and the downside. I hope you get rich, but don’t end up losing your shirt.

(If you’re thinking about making the leap to starting your own start-up, learn more about Trading Your Job For Venture Funding.)

Have you ever worked for a start-up? How did it turn out? Did you protect yourself? (Did you get rich?) How would you advise this reader?

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How to ask for an early salary raise

In the June 9, 2015 Ask The Headhunter Newsletter, a reader excels at a new job, fixes what was broken, and wants an early raise. Is that possible?

Question

I have been working for a small company for six months. My duties expanded dramatically soon after I was hired. When I got here, I walked into a disaster. It took a lot of hard work, but now I’ve got the department going like clockwork.

I think I’ve demonstrated that I’m worth more than my current compensation. Is it appropriate to renegotiate my salary at this point? What approach should I take? If terms cannot be met, should I look elsewhere? Thanks for the advice!

Nick’s Reply

dilbert-ask-for-a-raiseI like your pragmatic perspective. If you’re worth more today than when you were hired, you should be getting paid more! Some employers will be shocked, but they’re the ones that will lose their best workers to the competition for underpaying them.

Your job quickly turned into much more than you were told when you were hired. That’s actually pretty common — I’ll bet lots of Ask The Headhunter subscribers are in this boat. Management is often clueless about what a job is really all about, or what it’s worth (see Salary surveys: Know when to fold ’em). But a capable new hire quickly realizes how much work must be done — and does it. The added payoff to the employer is significant.

Sometimes, the employer is conniving. It knows there’s much more work than it lets on during interviews, and hopes to gain a much higher ROI on the salary it offered. The new hire gets stiffed, but isn’t likely to quit.

Either way, I think under the circumstances six months is not too early to approach management about a raise, if you can justify your request. (In fact, it may take six months more to actually get the raise, if it is approved!)

If you suspect management isn’t going to respond well, then start a quiet job search before you make your request, not after. This will give you true leverage in the negotiation, if only because you know you have other options.

Use a business plan

Now that I’ve encouraged you, let’s consider who you’re negotiating with. No company wants to feel pulled over a barrel, no matter what you’ve accomplished. So, be responsible and friendly about this. Your presentation for the raise should include a business plan that covers these things:

  • What you have accomplished,
  • How much you think you have saved — or profited — the company (an estimate is okay),
  • The challenges that need to be dealt with next (be specific),
  • What your plan is to tackle and meet those challenges and,
  • How your next year’s plan will profit the company.

You didn’t think I was going to wave a magic wand and make this easy, did you?

Here’s the key to pulling this off:

Raises are rarely given as rewards for past performance. They’re offered as inducement for even better performance in the future. In Fearless Job Hunting, Book 6, The Intervview: Be The Profitable Hire, I suggest that you take this discussion to your boss:

This means walking up to the whiteboard and outlining the steps that you would take to do the job and solve the company’s problems. The numbers don’t have to be exact, but you should be able to defend them intelligently. (pp. 30-32, “What’s your business plan for doing this job?”)

If you think in terms of a business plan that promises profitable performance, you’ll have a potent case. Based on what you’ve already shared, I think you can pull this off if your employer has any integrity and realizes workers like you are hard to come by. (See How to Say It: Mo’ money is the problem!)

Now here’s the beef in this Q&A:

In preparing your little business plan, interview key managers and personnel in the company about your job functions, to establish support for your presentation. This will help you perfect it, and it will also help you test it. (If no one’s very impressed, you may want to reconsider your plan, if not your request.)

If you’ve taken all my advice, and the company doesn’t see its way clear to pay you what you’re worth, you’ll have an alternative already on deck (an active job search), which is better than having to go create one at the last minute.

Have you ever asked for an early raise, when you realized a new job was far more than you were told — and because you blew through the employer’s expectations? Or did you quietly keep doing the job without asking for more money? What should this reader do?

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Reddit’s Ellen Pao: Your pay is what I say

ellen-paoReddit CEO Ellen Pao sounds like an HR manager whose goal is to save salary dollars: If you interview with her, you’re not allowed to ask for more money than she offers you. See Reddit CEO Ellen Pao bans salary negotiations.

Well, I’ve got a simple answer to that: I’ll go interview somewhere else, where candid dialogue is welcome.

Pao’s purported aim is to help women avoid discrimination. According to studies she cites, male and female managers reject women who negotiate assertively. But changing the rules the way she has at Reddit will likely result in lower compensation packages for men and women — something CEOs get patted on the back for by shareholders.

I don’t think much of anyone who doesn’t negotiate assertively, male or female. Curtailing negotiating hurts everyone and avoids the real problem. Here’s an analogy: Certain people are not allowed to sit at the lunch counter. So the lunch counter is removed to eliminate discrimination.

Is that a solution? Of course not. Neither is Pao’s policy.

If the studies Pao bases her action on are correct, the way to create salary parity is to change the way men and women respond to women who negotiate. Pao’s solution cheapens women who dare to negotiate — but in the end, it’s those women who will change the system. Shutting them down accomplishes nothing in the long term but to save money for employers.

Is Pao’s policy really going to make getting a job more fair for women? Or does it make dumbos of us all — men, women, job seekers and hiring managers alike?

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My boss won’t deliver a promised raise

In the March 10, 2015 Ask The Headhunter Newsletter, a reader complains that the boss laughs off a “small” raise.

Question

underpaid-crumbI work for the CFO of a huge company and I am grossly underpaid. When I brought this to his attention (several times) he finally thanked me and laughed it off, saying that I was slightly underpaid. He promised to work with HR to get me the small difference. That was in January. We are now in March. He even pointed out it wouldn’t really affect the budget for the year. It’s so small — yet he has no time to follow up on the paper work. I’ve been in contact with the compensation manager, who said they are waiting on my boss to make the next move. My boss keeps saying “it’s in process.” A “slight increase” to me is enough to cover gas for the week. I’m sure if he’s measuring it up to his $500k salary, it would be considered slight. What should I do?

Nick’s Reply

I’ve been in your situation myself, and I rationalized that “these things take time.” They do, but it’s incumbent on your boss to keep you apprised of progress — and to get it done. Or why is he the boss?

It sounds to me like he’s not on the same page about this, no matter what he says.

I see two disconnects:

  • You think you’re grossly underpaid, but he thinks the difference is slight.
  • He says he’s taking care of it, but the comp manager says that’s not true.

These are not good signs. You must decide whether these are signals that you need to be working for a company and boss that value you the way you think you should be valued.

I’m not suggesting you should stir up trouble. If you press this, you could get under your boss’s skin. Because this seems to be a trifling matter to a man who’s paid handsomely, it might be more of an irritation than he thinks you’re worth. In other words, it might cost you your job — and I don’t want to contribute to that if it’s not worth it to you.

But if your boss doesn’t come through with a reasonable increase, you should perhaps hedge your bet by having other options ready to go.

When I went through this once, I waited and negotiated for months. Nothing came out of it. But I finally lined up another job elsewhere. When my boss once again delayed a resolution, thinking he’d just keep me hanging, I submitted my resignation — and I let him figure out what happened.

Nothing makes you more powerful; nothing lets you make intelligent choices; and nothing keeps your spirits up — like having a good option B when option A doesn’t work out.

Because my option B was ready to go, I didn’t even vent my spleen on my jerk of a boss when I quit. I just smiled and moved on. It wasn’t worth explaining it to him because, thanks to the existence of option B, I really didn’t care and mentally I had already moved on! If I wasn’t worth an honest effort at correcting my salary, then my employer wasn’t worth a worry on my way out the door.

We came across a more extreme example of your problem last year: What to say to a stingy boss. While your boss doesn’t sound as bad, you’re still stuck without a raise after a lot of talk. Three months is plenty of time to be patient.

My advice: Even if you don’t need to use it, get yourself an option B. It will free you to look at this in an entirely different way. It’s not good to be under someone else’s thumb with nowhere to go.

For your next job, try this approach to compensation: How to decide how much you want.

How long would you wait for your boss to do what he promised? What else could this reader do?

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Should I take a big counter-offer?

In the March 3, 2015 Ask The Headhunter Newsletter, a reader considers a big, fat counter-offer not to leave a job she hates for one she really wants.

Question

counter-trapI work in the financial services industry. For a year and a half, I was promised project management work but never got it. Recently I landed another job in another company — something I’ve wanted for two years. But it comes with a $6k pay cut. Then my boss made me a counter-offer, promising everything he had promised before, plus an $18k raise and a promotion to Project Manager.

It’s a big pay difference and a major promotion, and that’s the only reason I’m considering it. I could live off the lower salary with some lifestyle changes, in exchange for having a job I really want. The reason I was looking in the first place was that I am miserable at my job. It’s the wrong culture in the wrong industry working for a narcissist boss. Of course, the extra money would really help. Please help me figure this out.

Nick’s Reply

Far be it from me to tell anyone to reject an extra $18k. But I will tell you what every good headhunter knows: A counter-offer usually has hidden strings.

I discuss this at length in “What’s the truth about counter-offers” in Parting Company | How to leave your job, (pp. 50-52):

“To a company, a counter-offer is sometimes a purely pragmatic tactic that enables it to sever a relationship on its own terms and in its own good time. That is, companies use counter-offers defensively. A company would rather have a replacement employee lined up, and a counter-offer buys time. The extra salary offered may be charged against the employee’s next raise, and the work load may increase. The employee is a marked man (or woman).”

In other words, there’s a good chance your boss is keeping you until he can find a replacement.

Of course, I could be wrong. Your boss may have seen the light. Even so, you must ask yourself, why didn’t your boss do the right thing before you announced you’re leaving?

You refer to lots of things that make you unhappy with your employer. The extra money would be nice — and I’d never blame you for taking it. But if this deal is designed to cover the job until they find someone new for less money, will you be on the street soon without another job waiting for you?

Again: Why didn’t your boss do this before you signaled you were leaving? Will any of the other problems you describe be corrected by this counter-offer?

I don’t get the feeling you went looking for a new employer because you wanted your boss to counter. But if you had, here’s the strategic advice I’d have given you, also from Parting Company:

“Before considering a job change, ask yourself if you would consider a counter-offer. If the answer is yes, identify exactly what changes you would want in your current employment and compensation and try to negotiate these with your boss before you step out. If there’s nothing you really want, then you’re ready to move on. (See “Learn to Move On,” p. 31.)”

It seems you already tried this, when you asked your boss for a job change and a raise. I know this is a very loaded question, but, why didn’t he give you what you asked for when you asked for it?

I think you know what you should do. The hard part will be deciding whether you can forgo all that extra money to have a job you really want, working with people you respect, in a healthier environment.

These are all things to consider. I wish you the best.

Would you take the counter-offer, or the job you really want? Am I too heavy handed with the risks of counter-offers? Have you ever gotten burned by one — or has a counter paid off for you? More important, what other factors would you advise this reader to consider?

(The reader who submitted this question has let me know what she decided to do and why. I’ll post the outcome as the discussion takes off! UPDATE: After letting our community post comments for a while… I’ve posted what the reader told me she decided to do, in bold down below in the comments… along with some additional information that she shared about her boss… Gotta give her credit for handling this so well!)

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After 2 big salary jumps, I landed hard

In the December 16, 2014 Ask The Headhunter Newsletter, a job seeker gets two 25% salary boosts and lands hard:

Question

I left a management job at Company A 16 months ago after ten years. It was becoming uncomfortably similar to the company you refer to in Death by Lethal Reputation. A friend recruited me to Company B for a 25% pay raise. Company B turned out to be a good place to work, but after six months there another friend requested I talk with his director as a favor, and to cut to the chase, Company C offered another 25% raise on top of what I was making and I took it.

is it-about-moneySince then, at Company C I have had six different bosses, management has re-structured three times, and my co-workers have been very difficult to work with since they all seem focused on the politics of positioning for the next shake-up. (It’s scheduled for next month.) This caught me completely by surprise since this kind of thing really hadn’t been happening there before.

I am growing impatient with the chaos and losing confidence in my managers, but I am reluctant to have another change so soon on my resume. I’m very good at what I do, which is highly specialized technical work. I’m fortunate to be in such demand, and I admit the money was a big part of jumping to Company C, though it’s clear that I blew it.

How many changes are too many on a resume? How much patience do I owe this employer? How would I present myself to a prospective employer without appearing like I am hopping jobs for money?

Thanks and best regards.

Nick’s Reply

Time to pay the piper, eh? Don’t feel too bad. While you should have looked under the rug more carefully before you took this latest job, I know it’s hard to turn down such salary increases from companies that are hungry to hire specialized workers.

When you pursue that next job, interview the company in more detail. (See “Due Diligence: Don’t take a job without it” in Fearless Job Hunting, Book 8: Play Hardball With Employers.) The only way to get the real story before you take the job is to talk to managers that are peripheral to your own department, and to other employees who know how the business really works.

When a company begins to indicate that it’s serious about you, that’s the time to ask to meet more members of the organization.

How to Say It
“It’s important to me to know how Sales (or Operations, or Engineering) functions, because I’ll be affecting their success and they’ll be affecting mine. I’d like to meet with the manager of Sales, and with some of the other technical people in the department I’d be working in. Can you arrange that?”

This is the kind of insight that will help you make a more informed decision, and help you avoid surprises.

kangaBut let’s look at your current situation. What is your responsibility to this company? You’ve been there about ten months. You might stick around long enough to see how the new re-org works out. Then I’d have no qualms about leaving if things don’t get any better. But even if you give that six months, you’re still talking about a short tenure right after a six-month stint at Company B.

No matter how you cut it, you come across as a job-hopper who’s gone for the bucks. I’m not criticizing you for that, but I will suggest that now’s the time to figure out what you really want in your career. Define it clearly — industry, business, company, technology, function, compensation, the work itself, the people. Then pursue it. Ignore the wrong jobs. Go after the companies where you want to work.

Here’s some advice that emphasizes just how deep you must dig to avoid another mistake — from Fearless Job Hunting, Book 5: Get The Right Employer’s Full Attention, p. 12:

Check a company’s references
Talk with people who depend on the company for a living: attorneys, bankers, investors, landlords, and others. This will give you a community-wide perspective and also help keep you out of harm’s way. Explain that you are considering an investment in the company. (Your career is indeed an investment!) Ask for their insight and advice. Is this a good company? Why?

When companies pursue you too aggressively, they can hurt you. You can start to look like damaged goods because you’ve jumped around too much. I wouldn’t say you’re there yet — not with two short jobs on your resume.

My guess is you might have to take a pay cut to get the kind job (and environment) you want. If it comes to that, consider it the cost of getting back on track. In a good company, you’ll have a chance to make it up pretty quickly. (See “Taking A Salary Cut to Change Careers” in How Can I Change Careers?)

The best way to deal with the resume issue is to avoid using one. (See Skip The Resume: Triangulate to get in the door.) The kinds of contacts who helped you win your last two jobs should comprise your strategy. When a buddy introduces you, he or she can also explain your situation, and that you’ve learned a lesson. And don’t avoid that topic in an interview: Be blunt about it.

How to Say It
“I made a serious mistake. Not just going for the money, but not looking carefully at a company before enlisting. Before I take another job, I want to make sure I’m right for the company, and that the company’s right for me. So please feel free to be blunt with me, and I will be with you, too. I want to make sure we can live and work together to get the job done.”

As you decide which companies you want to work for, make it your first goal to develop contacts there. If you lack them, you can create them by polling your friends.

Even if you decide to stick around till after the re-org, start your search now. Work at this patiently, and choose carefully. Put your two lemons in their place, swallow the sour taste, and get ready to move on.

I wish you the best.

Have you ever regretted taking too much money? How many job leaps are too many?

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News Flash! HR Causes Talent Shortage!

Hold the presses! I’m going to show you how HR created “the talent shortage.”

I recently did a Talk to Nick consultation that illustrates why employers aren’t filling important jobs — while they complain there’s a talent shortage. The real talent shortage is in corporate management, where hiring is treated as an expense rather than an investment. Here’s what crummy job offers cost employers.

In the October 7, 2014 Ask The Headhunter Newsletter, a job seeker turns down a lousy job offer:

I heard from my old employer today. I got an offer that’s approximately the same amount I was getting paid when I left five years ago!

Background

low-offer“Mark” (not his real name) is a successful engineer who asked me for help in 2012 — to land a better-paying job elsewhere. He succeeded, and since then his engineering skills have grown and he has developed expertise in operations and quality assurance. This talented R&D engineer can now convert technically challenging concepts into products ready for production. His skills and abilities are far more valuable today than they’ve ever been. He contacted me again a few months ago when a manager at his old company encouraged him to apply for an R&D engineering position — in other words, to return.

After an hour’s consultation with me, Mark had a series of interviews, including a meeting with the manager who knew him so well the first time around. Here’s what Mark reported happened next.

Mark’s Story

I heard from my old employer today. I got an offer that’s approximately the same amount I was getting paid when I left five years ago! I declined to state my current salary in the screening interview, and instead explained the salary range I’d expect for an engineer with my experience. The personnel jockey replied that, “You know you will have to provide this at some point to move forward.”

I suspect the HR people pegged me based on my last known salary. If I had stayed with this company for five more years, I would be making more than the offer — a figure around my current salary.

I negotiated with the hiring manager, but HR handled the offer. There was some motion on their side, but only in the form of a one-time check that had large strings attached. The deal fell through. Companies succeed in spite of themselves!

The reasons why they could not improve the offer were as bizarre as some of the excuses I used to hear on my personnel reviews about why I could not be rated higher. In my conversations with the hiring manager, he stated that they recently lost a good employee in much the same way they lost me. I just chuckled. Thanks again for your assistance.

Nick’s Reply

The McQuaig Institute (a developer of talent assessment tools) recently polled over 600 HR professionals. The #1 reason they lose job candidates — reported by 48% of U.S. companies — is because the offers they make are too low.

HR knows where the talent shortage comes from: Lousy job offers.

Peter Cappelli, a human resources and labor researcher at the Wharton School, confirms that “employers can’t get candidates to accept jobs at the wages offered.”

Employers know exactly what the problem is, but they play dumb.

Cappelli points out, “That’s an affordability problem, not a skill shortage. A real shortage means not being able to find appropriate candidates at market-clearing wages. We wouldn’t say there is a shortage of diamonds when they are incredibly expensive; we can buy all we want at the prevailing prices.”

loserEmployers today refuse to pay market salaries and wages, then blame the labor force. (See How to decide how much you want.) That’s how HR — which took control of your job offer — lost you, along with other employees, and created the talent shortage at this company. This is how HR turns companies into losers.

It can be hard to swallow the reality that a company just isn’t going to make a prudent decision when it makes a ridiculously low job offer. I can’t tell you how many times I’ve advised clients to raise offers — after I’ve shown them what it’s going to cost to leave work undone. Crummy job offers also cost employers their reputation — in their own professional community when word gets out that their offers are too low.

Many just don’t get it. Employers incorrectly view hiring as an expense rather than an investment with an ROI. The great irony is, the actual extra dollars spent on higher offers are almost irrelevant when compared to the value the new employee will create. The more subtle lesson that some companies — but not most — learn is that enhancing an offer can make a new hire happy, more loyal, and more productive. Money doesn’t buy love, but it can buy better work.

However, Cappelli points out that corporate accounting systems do not track the cost of leaving a job vacant, making it appear that the “cost savings” of leaving the job empty translate into “profit.” (Yes, I’m still laughing my A off at that one. Call it revenge against the bean counters!) A crummy job offer costs an employer — and our economy — quite a lot.

Employers are shooting themselves in the foot when they make silly job offers. An engineer plus five years’ more experience, plus expertise translating designs into buildable, quality products, plus the maturity to work across corporate departments is worth more than the same engineer five years ago.

Except to a cheap employer with a serious talent shortage in the executive suite.

Good for you for rejecting a lousy offer. I realize not everyone can afford to do that. (See Turn down that job offer.) I think such jobs get filled because employers wear applicants down and convince them that “this is the way it is, and you should accept it.”

In Pursue Companies, Not Jobs, I suggest that you (or anyone) should pick a good company, take the best job you can get there, and navigate the company once on board to get to the jobs you really want in time. It’s all about the quality of the company and the people. Salary is such a small component of a company’s business, yet HR is so focused on it that enormously bad business decisions are made over a few bucks. (Meanwhile, HR blows billions on job boards, applicant tacking systems, and other automated “tools” to help it make more low-ball offers to save money… gimme a break!)

Your old boss confessed to you what crummy salaries and job offers do: They make talent disappear. So you don’t need a news flash — you already know.

Thanks for sharing the outcome. Seriously – move on to a better opportunity. Start picking your next target, and be ready to express your desired salary range, and to negotiate a fair compensation package. You’ll learn more in Fearless Job Hunting, Book 9: Be The Master of Job Offers, and in Book 7: Win The Salary Games (long before you negotiate an offer).

Have employers created the talent shortage? Are they paying for crummy job offers in ways they don’t realize? Have you been smacked with a ridiculous offer? What implications do you think this has for our economy?

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Gotcha! Get job offer concessions in writing!

In the September 16, 2014 Ask The Headhunter Newsletter, a job seeker tries to finesse a good job offer:

I just received a fantastic offer from a growing company that comes with a huge salary increase. I have a few days to decide while they conduct a background check and will enter negotiations once the hiring manager gets the all-clear from HR.

get-it-in-writingMy current job is close to home and incredibly flexible with my time (work from home, comp time, etc.). I would be giving much of that up for a big spike in salary and responsibility. I am not afraid of work and put in extra time when it is needed. In my industry it’s common to have big crunch-time spikes where you work 60 or 70 hours a week and then back to a normal load during slow times. I know what the job is, what is required, and I enjoy doing it. But the reality of my job makes it important to maintain work-life balance during the slow periods. I am hoping to negotiate some flexibility into my offer.

The company expects 9 hours “at the office” with a 1-hour break for lunch. I bring a sandwich to work and eat at my desk nearly every day. Even if I do run out to get something, I grab it and head back to my desk. I don’t need an hour for lunch and the extra 30 minutes with my toddler before bed time means a lot more to me. I know myself — I am going to end up working during “lunch” anyway. Reducing my scheduled lunch to 30 minutes so I can leave at 5 p.m. would make a big difference for me.

This is the only reservation I have about the job, and I believe I am prepared to take it either way. I am ready to give up a lot of flexibility because it is a great professional move, but I am hoping to keep just a little bit of my work-life balance in place. How can I negotiate flexibility without the perception that I just want to cut out early every day?

Nick’s Reply

Even if you win this concession, there’s a gotcha that’s even more important. We’ll talk about that in a minute.

You’ve already decided to take the job regardless of the 30-minute issue. So, please ask yourself, what’s really important to you? If it’s time with your child, then make that your priority. If you can live without that 30 minutes of family time, and you absolutely want this job and the extra money, then don’t negotiate. The worst position to be in when negotiating is when you have already decided to accept the other guy’s terms as they are. (In Fearless Job Hunting, Book 9: Be The Master of Job Offers, I discuss a powerful negotiating position to take if you already know what concessions you’re willing to make. See “Am I unwise to accept their first offer?”, pp. 8-9.)

But if you really want that time at home, then don’t feel guilty or hesitate to fight for it. When you discuss the offer, I suggest you explain that you want the job and are eager to start, but your acceptance hinges on one issue.

How to Say It

“I’d like to accept your offer and will deliver 9 hours at the office, and I will commit to X, Y and Z. But I’d like to discuss one of the terms. I’d like to swap 30 minutes of lunch time so I can leave work 30 minutes earlier to be with my child. When I need to work late during a crunch, I’ll do that. I’d like the written offer to reflect the 30-minute time trade. Otherwise, I’m ready to accept your offer as you have presented it.”

I’d explain it to them just as you did to me. There’s nothing inappropriate about your requirement. But you have to ask to make it happen. (By the way, I think you’re right – you will always eat at your desk anyway.)

You can add this: “I realize you’d need assurance or proof that I’m not abusing the 30 -minute trade-off. So, how could we ensure it’s handled properly? What I ask in return is that it be stated in my written offer.”

By letting the employer set some terms around this, you help them make the concession. But you should absolutely get it in writing if they agree. An oral commitment from the employer is not sufficient.

In fact, I’d like to emphasize this last point. It’s the gotcha I referred to earlier. You might win the concession, and lose it later. Any terms you negotiate in a job offer must be written into the agreement. If your boss changes, or if the person who made the promise disappears, this deal likely will come to a quick halt. Even under the best circumstances, people forget what they agreed to. (In the worst circumstances, an employer will just lie to you.) There’s nothing like being able to produce a piece of paper with a signature on it to ensure you’re getting the deal you signed. Don’t lose what you gained!

Please use your best judgment — not just my advice. Congratulations on the offer. It’s great you’re so pumped about it. Now make sure the terms are what you really want. (See That’s why it’s called compensation.)

Oral promises don’t mean much when the rest of the deal is in writing. Have you ever gotten screwed out of a promise after you started a job?

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Help! I’m a floundering headhunter!

In the August 5, 2014 Ask The Headhunter Newsletter, a headhunter’s troubles reveal how job seekers can help themselves:

flounderingI just read your expose on CareerBuilder (Employment In America: WTF is going on?). I have used them over the years with very mixed results, and now they’re eliminating my discount and almost doubling my cost. A major disappointing rip-off.

I am a niche technical recruiter in a sector that has thousands of jobs not being filled because there is a lack of heavy-industry engineers. I am on Linkedin with up to 14 million connections to the 3rd level. There are some legit contacts, but the recruiter tools are a rip-off. And like CB and Monster, their sales people are relentless and care little for their customers’ results.

I have been doing direct e-mail campaigns and making calls, and I’ve been posting to niche boards. I got slammed by junk resumes on Indeed. Monster wants to sell me a $5,000 per month program, and I am hitting the wall. I have used some professional sourcers and it has been a struggle. One sourcer’s fee would be 50% of the fee a client would pay me.

I am floundering. All the techie features of these online systems can be a distraction! What else can I do to find good candidates for my clients? This is still about finding good people for good companies. Part of the problem is that the people I am searching for in heavy industry don’t publish, don’t attend conferences and don’t operate or participate on blogs. The companies that I work for trust me and they know their positions need to be filled with leprechauns riding unicorns chasing purple squirrels. Nick. I don’t want to be a lousy recruiter. It is still an important service that changes lives… hopefully for the better. Any advice is appreciated.

Nick’s Reply

I hope job seekers, whose questions we usually discuss here, can learn something from my advice to a troubled headhunter.

The solution is old-fashioned. You have to go where these people (candidates) hang out — wherever that might be. You talk to people who know people in the business – and ask for referrals to other possible sources. You do this primarily on the phone, but as much as necessary by e-mail, too. The point is to create a potent network of solid contacts so that insiders in heavy industry will know who you are and refer others to you.

LinkedIn is little more than a fancy phone book. Everyone is in it, but consulting it isn’t recruiting. As you can see, a list of 14 million people and their data is useless in itself. And the job boards deliver swill by the bucket. The reason a company uses a headhunter like you is that this takes hard work and there are no shortcuts. That’s where the huge headhunter fees originated – for all the hard work. Those professional “sourcers” you mentioned — they actually identify appropriate candidates in very challenging industries, and that’s more than half the work of headhunting. Of course they want half your fee! The online shortcuts just don’t do it.

I’m not trying to give you a hard time, just a reality check. Headhunting is 90% meeting and talking with people all day long. That’s where assignments and candidates come from. I know you know this, or you wouldn’t be telling me how all these “services” don’t really work.

You can start with your clients. Meet with them and ask them where their best hires have come from – what cities, what companies, what schools, where? Then I’d start cultivating contacts in those places.

Then go to heavy-industry engineers you have placed. What competing or related companies do they admire? Do they know engineers there? What continuing education courses do they take and where? Sign up for some of those classes — it’s where you’ll meet engineers and sources of good contacts. What conferences do they attend? Attend them yourself. (I don’t buy what you’re saying. Engineers congregate with other engineers. Your challenge is to figure out where.) Don’t just talk to attendees; talk to the organizers and presenters. They are great sources of candidates. Just don’t forget to return favors!

I’m sure you know people in manufacturing, finance, operations, marketing and sales. Many of them know engineers who know the engineers you’re looking for. That’s who those “sourcers” are talking to. Your job is to talk to them, too.


For the job seeker

How Can I Change Careers?Networking is not about using people. It’s about hanging out with the people you want to work with, where they hang out — talking shop, contributing to your professional community and making friends. The How Can I Change Careers? Answer Kit (36 pp., PDF format) provides tips and tools for career changers and job changers alike, including:

  • A good network is a circle of friends
  • The basics of good networking
  • How to initiate insider contacts
  • Tell me who your friends are
  • PLUS: Create your next job
  • PLUS: Put a free sample in your resume
  • PLUS: A crib sheet to help you explore, choose and research the right opportunities; tips on how to enter a circle of friends; how to define an employer’s needs and map your skills; and how to create a business plan for a job that will make you the profitable candidate in an interview.

I’m also sure you know quite a few heavy-industry engineers who are not looking to make a change. Buy them a nice lunch anyway and pick their brains — express an actual interest in their work. Become more of an expert in the field you recruit in, and you will start to see connections and opportunities you never saw before. Don’t ask these engineers for referrals; instead, offer them introductions to other people that might be beneficial. For free. Become a hub of good contacts without expecting any return and those engineers will start referring their friends to you because they will come to see you as more than just another headhunter who throws buzz words around — they’ll see you as a valuable industry resource.


For the job seeker

The best headhunters are looking for you in places where the best of your peers are talking shop. They cultivate potent networks of solid contacts — and job seekers can do exactly the same for themselves. For a more structured approach to how job seekers can meet and work with the best headhunters, see How to Work With Headhunters… and how to make headhunters work for you (130 pp., PDF format). It includes these sections and much more:

  • htwwh1Why don’t headhunters return my calls?
  • How should I judge a headhunter?
  • What are all the different kinds of headhunters?
  • Are online job boards a good way to find headhunters?
  • What’s the secret to getting on a headhunter’s list?
  • What kind of resume will make me the headhunter’s #1 candidate?
  • How can I find a good headhunter?
  • How should I manage a call from a headhunter?
  • Should I divulge my salary to a headhunter?
  • How should I negotiate with a headhunter?
  • Can I boost the salary range for a job?
  • Can a headhunter hurt my reputation?
  • Should I tell a headhunter who else I’m interviewing with?
  • PLUS: How do I keep a headhunter from squeezing me out of negotiations?
  • PLUS: How do I avoid having my resume tossed in the trash?

Like good jobs, good candidates are found through relevant contacts and hard work. (Who is relevant depends on how creative and insightful you are. That’s another thing that makes those big headhunter fees hard to come by.) The contacts you need will grow out of your active participation in the professional community you recruit from.

I admire how seriously you take your work. But no one is going to do it for you, and no online service will replace you. Take that to the bank.

How do the best headhunters you’ve met operate? We’re always talking about what’s wrong with headhunters. Some of them are very good at what they do. What’s right about them? Please share your experiences. Let’s talk about how to use the best headhunters’ best methods yourself!

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Join My LinkedIn Gang-Bang!

In the December 3, 2013 Ask The Headhunter Newsletter, a reader wants to join my network:

I wanted to send you a LinkedIn invitation to connect, but I noticed on your LinkedIn profile page that you only accept connections from people you already know. How can you expand your network if you don’t want to meet new people? I respect your policy, but I don’t think it’s a good idea. I could introduce you to people you can do business with. What’s wrong with that?

Nick’s Reply

gang-bangPlease check my LinkedIn profile again. It’s changed since you last looked. Send me that request — I’ll accept it.

My profile used to say: “Don’t ask me to join your LinkedIn network if we don’t know one another or if we haven’t done business together.”

That was a lofty standard, and one I maintain in the real world.

If you don’t get it, think about it this way. If I get a call from an employer (or any business person) that wants to check your references, I need to know what I’m talking about, right? If I don’t know you well enough to give you references, why would I accept you as a LinkedIn connection? We’d both look like idiots.

But that was then, and this is now

Welcome to the new world of LinkedIn b.s. connections, where phony relationships are the coin of the realm and everyone can pretend to know one another.

In the real world, I have standards. On LinkedIn, I’ve deleted my aforementioned linking policy, because there are no standards. (I know a guy who has 118,000 connections. He’s an idiot, and the “influencer” articles he posts are as phony as his relationships.)

So, send me a connection invitation. I don’t care who you are any more than LinkedIn does — I’ll connect, because it means about as much as being in the old Ma Bell phonebook, or being findable on Google. Everybody’s already connected “because they’re in there.”

Don’t get me wrong. I love LinkedIn. It’s the best online phone book ever assembled. It’s incredibly nice to be able to look people up.

But I propose that LinkedIn do away with connections altogether, and just let users query the system when they want to get in touch with any other member, without pretending there’s a pre-existing relationship. Even LinkedIn seems to think there’s nothing special about your (or my) connections. It doesn’t care which button you click when you invite someone — colleague, classmate, friend… the system lets you fib.

My subversive agenda

In fact, a class action lawsuit filed recently in San Jose federal court says that LinkedIn doesn’t even recognize the value of contacts. The litigants claim LinkedIn hacks new members’ e-mail accounts and appropriates their contacts — to advertise LinkedIn, to get new members, and to implement the company’s mission. (LinkedIn refers to this as “new growth optimization efforts.”)

So, who am I to tell you I won’t accept your link requests? I do admit to a subversive agenda. If we all connect to one another, then we don’t need to pay LinkedIn for access to people outside our connections, and LinkedIn can’t block any of us from using its network the way it uses its our e-mail lists: To make money.

According to Bloomberg, LinkedIn programmer Brian Guan spilled the beans on his own LinkedIn profile. He describes his job as

“…devising hack schemes to make lots of $$$ with Java, Groovy and cunning at Team Money!”

“Team Money” used to be a business network with standards that rose above, say, those of Facebook. It was, after all, a place for business people to transact business. But LinkedIn started cashing in its chips even before it did an IPO, and now it’s just one big data gang-bang. LinkedIn has signaled clearly that it’s just in it for the money — and any semblance of exclusivity, or integrity about connections, or concerns about members’ welfare is gone.

Here’s what led me to my decision to open up my network

  • LinkedIn charges for Premium membership, but users say there’s no need to pay a fee to access the most useful feature — viewing profiles.
  • LinkedIn expert Jason Alba agrees: “The most important thing is to have a really solid profile. If you want, you can walk away after that. People will still find you.”
  • If you haven’t noticed, all LinkedIn seems to do any more is sell. Its sales force grew from 207 reps in 2010 to 1,822 this year, but where’s the investment in network benefits to users?
  • LinkedIn recently issued $1 billion in new stock. Some might see growth; I see somebody trying to cover the costs of an unsupportable sales operation.
  • LinkedIn recently opened the doors to 13-year-olds. The company says it’s “so they can make the most informed decisions and start their careers off right.” (That must have something to do with the Profitable Child Labor discussion group, eh?) Gimme a break. I think it’s so LinkedIn can tap the teenage data set, which is now worth around $300 billion in the U.S. alone.

LinkedIn is the new TheLadders, the world’s last failed “exclusive” network of businesspeople. Both companies have thrown the doors open to anyone and everyone, after making highfalutin’ representations about “networking.”

  • Both companies are now the subject of consumer class action suits.
  • Both companies are manned by the same people who invented the “churn ‘em and burn ‘em” model of the job boards — alumni of HotJobs and Monster.com.
  • And both companies tout the value of high-quality “connections” while de-valuing those very connections. (Endorsements, anybody?)

Join my LinkedIn Gang-Bang!

It doesn’t matter whether we know one another or have done business together. Send me your LinkedIn invitations, and I’ll accept them. No offense to you but, like LinkedIn, I want to use my connections to make money — and so do you. Unlike LinkedIn, I do have scruples — I’ll never sell your data to advertisers. But keep in mind that what I do with your data doesn’t matter. LinkedIn will sell our data to anyone that will pay for it. We’re all in the phone book, after all.

My only quandary: As a parent concerned with my own children’s safety, what do I do when 13-year-olds start asking me to connect?

What’s your take on LinkedIn connections? Do you limit your list, or is it a gang-bang like mine? Just how much b.s. will people pay for?

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