Job Market Madness: What do you say?

In the December 18, 2018 Ask The Headhunter Newsletter we take a look at the madness of the 2018 job market — 3 issues that made me crazy all year long. What do you say about these topics?

job marketNick’s Question

For my last column of 2018, I’m turning the tables and asking you for answers. Throughout the year, news about the job market set my head spinning again and again. (It’s still spinning.) I saved some of the juicier stories so we could review them now, as the year winds down.

Here are three controversial topics and my take. What do you say about them?

What do you say?

It’s become a perennial issue in the job market: the constant, wild claims by employers that there’s a talent shortage because today’s workers lack the right skills. (See News Flash! HR Causes Talent Shortage!) My take on this is that employers are full of crap, and my take gets credence from Wharton labor researcher Peter Cappelli.

Training: More skills, not more pay

Three years ago I wrote about The Training Gap: How employers lose their competitive edge. I cited Cappelli’s research, which strongly suggests that while companies complain today’s workforce lacks up-to-date skills, employers themselves contribute to the problem. Cappelli notes that training and employee development budgets were slashed long ago:

“American companies don’t seem to do training anymore…the amount of training that the average new hire gets in the first year or so could be measured in hours and counted on the fingers of one hand.”

Recently, Bloomberg Businessweek (Companies give worker training another try) reported that:

“Fifty-five percent of U.S. employers surveyed by ManpowerGroup this year said they were providing additional training to cope with talent shortages.”

Sounds great, doesn’t it? But Cappelli wasn’t — and still isn’t — wrong. Cappelli suggested that if employers really need higher skill levels, you’d think they’d also be willing to pay for them in today’s highly competitive hiring market — right?

Well, they’re not. Cappelli claims — and I agree — that the “talent shortage” employers cry crocodile tears over is at least in part due to their failure to pay competitive wages and salaries. The same Manpower survey agrees:

“Only 26 percent [of employers surveyed] said they were offering higher salaries.”

What do you say? Are you seeing employers deliver more training and education to workers? Are employers making higher job offers — and paying higher salaries — to get and keep workers who have the “necessary skills?” What responsibility do companies have to educate their employees and new hires?

Tell Us Your Salary!

You already know my rule: Never, ever disclose your salary history to an employer. But the “news” is full of advice that hurts job seekers.

If you cough up your current or past salary information, it will be used to effectively cap any job offer. You’d be helping an employer negotiate against your best interests!

In a recent advice column, The New York Times explained How to Be an Ace Salary Negotiator (Even if You Hate Conflict). There’s some good advice in that article. But career pundits always seem to sell out their readers when employers and HR managers turn up the pressure.

Columnist A.C. Shilton says employers expect you to negotiate, so you shouldn’t be afraid to, as long as you view the negotiation as a discussion rather than a confrontation. I think she’s right:

“There is no obligation — legal or otherwise — to disclose this information, so your first move should be to parry this question to see if your potential employer will throw out the first number.”

But then Shilton chokes right where most job applicants choke:

“Still, read the room: Sometimes you’ll just have to cough it up.”

Shilton then cites an expert from the American Association of University Women who recommends double-talk rather than a forthright “No dice!” when the personnel jockey “in the room” demands your salary information. Here’s the script the AAUW expert says you should recite:

“This position is not the same as my last job, I’d like to discuss what my responsibilities would be here and then determine a fair salary for that job.”

Practice giving this response until it feels like second nature, says Shilton. In other words, force yourself to talk to the hand. Cave in.

But the estimable New York Times isn’t the only advisor telling you to take the salary sucker punch in a job interview. On CNBC.com, ace business expert Suzy Welch leads job seekers right off the negotiating cliff.

In What to say when a job interviewer asks, “What’s your current salary?” Welch warns that withholding your salary history “is no way to start a relationship.”

Welch says:

“The best way to secure your place at a new company and advance your career is to simply tell the truth.”

Why? Because, says Welch, “the decision to share your salary is worth the risk.” #GimmeABreak.

What do you say? Is your salary history anyone’s business but your own? Should you ever disclose your salary history to an employer? What has your experience taught you? Can you negotiate the best possible deal if you cave?

Men & Women ALL Get Lower Pay

The controversy about equal pay for women met #MeToo in 2018, but the men still don’t get it. (See Don’t blame women for the gender pay gap!)

On September 14 this year, Jeff Stein reported in the Washington Post:

“The gender pay gap has begun narrowing over the last four decades — and women’s earnings are now closer to men’s. But that is not only because women are doing better. The trend is also in part because men are earning less. Earnings for men have fallen in the decade since the recession, and are even below levels for much of the 1970s and 1980s.”

From ‘Not doing better than their fathers’: Men’s earnings have fallen since 1970s, Census Bureau says.


Yes, guys, that means #YouToo. Everyone’s getting screwed. I refer you back to Wharton’s Peter Cappelli, whose analysis of decades of data suggests employers own the “talent shortage” for three reasons.

  • First, they rely on silly HR technology that hinders effective recruiting.
  • Second, employers expect “just in time skills” — they refuse to train anyone.
  • And third, employers refuse to pay market rates to attract and hire the best talent.

All year long I’ve been running into data that fully support Cappelli’s contention that companies’ labor woes are due in large part to low pay — also known as greed.

A column I wrote last summer, B.S. on the jobs numbers euphoria, included a graph produced by Bloomberg based on data from the Bureau of Labor Statistics. BLS reported that spending on compensation between 2009-2018 for everybody is still way down from what companies were spending on compensation before the 2008 bust.

That red line — “Biggest gain of the expansion” — may be the biggest misnomer of the job year. “Pay still hasn’t recovered” would be the more honest tag for the failed compensation recovery.

Stein reported:

“From 1973 to 2017, men’s earnings fell by about $3,200, or about 5 percent, in numbers adjusted for inflation.”

The Census shows that while women’s earnings have “crept upwards,” men’s earnings have actually dropped. The same data set, of course, puts women’s earnings significantly below men’s.

What do you say? Did you know that real pay is actually lower for men, and unfairly low for women? Is it time for #UsToo? Have you ever calculated what’s happened to your “real earnings” since you started working? Why is this happening in a booming economy?

I hope you’ll chime in with your answers and opinions about these three topics that combine to create job market madness!

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This is the last Ask The Headhunter column for 2018. I’m taking a couple of weeks off for the holidays! See you next on January 8, 2019! Here’s wishing you a Merry Christmas and a Happy, Healthy and Prosperous New Year — and all the best for whatever holidays you observe this time of year!

If you’re new to Ask The Headhunter, or just want a refresher on the main ideas we discuss here every week, please check Ask The Headhunter In A Nutshell: The Short Course and The Basics!


 

Why does he get more pay than me?

In the August 8, 2017 Ask The Headhunter Newsletter, a reader becomes disgruntled upon learning a co-worker at the same job gets more pay.

Question

more pay

I recently started a new job, and there is one other person here who does what I do. He was hired about six months before me. While he was helping me get settled, he showed me his annual benefits enrollment form as an example. It had his salary pasted all over it, and I was dismayed to find out that he makes 30% more than I do.

We have the same job, the same responsibilities, and my initial assessment is that my skills and background are stronger than his. (He did have a contracting relationship with the company for some time before he was hired.)

It’s been very demoralizing to learn this so soon after starting this job, which is otherwise a good situation for me. Is there any way to handle this, besides going out and finding another job? It’s hard to be happy and effective at work knowing someone else who does the same things you do earns so much more. Thanks!

Nick’s Reply

There’s a parable in the Bible that’s useful here. Two farm hands hoeing a row of beans stop for a break. Abe mutters, “I can’t believe I work this hard for $5 an hour.” Isaac is stunned. “$5 an hour? I get only $3 an hour!”

Later, Isaac goes to the boss. “How come you pay Abe more than you pay me?” The boss arches an eyebrow. “What did I offer you to do this job?” Isaac answers, “$3 an hour.” The boss leans toward him a little closer. “What do I pay you to do this job?” Isaac shrugs his shoulders, “$3 an hour.”

“So, I’m a man of my word,” says the boss.

Why more pay?

You have no idea why the boss pays your buddy more than he pays you. But there may be many reasons. For example:

  • Your buddy may have been hired on a career track you’re not aware of and he may have skills you don’t have that the boss will need later.
  • Your buddy may have been better at negotiating his deal than you were. (Need to beef up your negotiating skills? Here’s some help.)
  • Maybe the company can’t afford to pay more now.
  • Or, it may be easier to find workers today than it was six months ago.

The list of possibilities goes on. The point is, you accepted a certain deal, and your boss is honoring it. Don’t leap to a conclusion about this.

Justify more pay

My guess is your boss isn’t going to pay you more just because you want more. You’re going to have to justify your request, and it won’t help to compare yourself to someone else. Demonstrate your own value. (See Stand Out: How to be the profitable hire.)

When the time comes for your first performance and salary review, I suggest you prepare for it like this:

  • Outline what you think will be the three biggest challenges, problems, hurdles or objectives in your job next year.
  • Then, list three things you will do to tackle them. This should include significant detail, but don’t overdo it.
  • Finally, explain how your approach to doing the work will be profitable (or beneficial) to the company.

This approach will help you justify your value — and the extra money you want — to your boss.

What’s fair depends on the facts

In the meantime, consider how presumptuous it would be to ask your boss for more pay, right after you accepted the deal you did. I’m not going to get into the ethics of hiring the exact same kinds of people for the exact same kinds of jobs at different rates of pay, because I have no idea whether everything is equal. Do you?

Be careful: Value isn’t as obvious as you might think. Your co-worker may be more valuable to your employer than you are. While you may be getting treated unfairly, you just as well may not have all the facts to make that judgment.

(My good buddy Suzanne Lucas, aka The EvilHRLady, offers some strong advice about equal pay practices in 5 Ways Smart People Are Solving Income Inequality.)

You made the deal

I believe employers should pay equitably and people should be paid what they’re worth — but value is relative depending on the needs of the employer. You may indeed be worth more than you’re being paid, but you made the deal.

Could you have made a case for more pay? If yes, then this is on you. But consider that negotiations will come around again at review time. I suggest that you focus on the issues we’ve discussed — issues that might not seem so obvious — and that you respect the deal you made until the time is right to renegotiate it. It doesn’t sound like the salary was unsatisfactory when you accepted it. (Needless to say, you always have the option to quit.)

My advice is to take this one step at a time, and be careful not to disturb your good relationship with your co-worker. He’s hardly to blame. Focus on what the boss knows about your value, and make it your job to clarify that.

Finally, my apologies to the Bible for mangling a good parable.

(Ever wonder how asking for a promotion and a raise are similar to interviewing for a new job or a new career? The challenge is almost exactly the same — it’s about how to deliver more value to get more money and a better position. To learn more about how to make yourself stand out in front of your manager — or the boss you want to work for — check out How Can I Change Careers?)

Should you suck it up when you accept a deal that suddenly appears less desirable? For how long? And, how can you fix it? If you’ve been in this situation before, tell us how you handled it. What can this reader do now?

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