Compensation: Negotiate beyond money

Compensation: Negotiate beyond money

Question

I recently decided to leave a Fortune 100 company after nearly seven years. I accepted a generous severance package and have just been offered a good job at a small but growing company. I don’t think this company can match my salary demands so I would like your advice on compensation — how to negotiate professionally with them. Thanks.

Nick’s Reply

compensation negotiateJob candidates can flub negotiations if they fail to recognize that there are two components to compensation. There’s money, and there’s everything else. If you ignore that dichotomy and focus primarily on the money, you miss the point of compensation and you might forego a job you really want. Of course, if salary is the key for you, then much of this advice won’t be helpful. But if you’re open to alternatives to salary alone, read on.

What is compensation?

Compensation is not necessarily just money. An employer compensates, or “counterbalances or makes amends for” actions you have taken (that is, work you have done) for the employer’s benefit. Viewed this way, compensation might have little or nothing to do with paying you money.

You might think I’m batty, but if you’re forced to negotiate with an employer who can’t meet your salary requirements, suddenly the idea of negotiating beyond money gets interesting. Let’s consider what compensation really means.

What is compensation for?

You devote time, effort, brain power, and perhaps muscle to do a job. These resources are all limited. You deplete them from your life as you deliver them to your employer.

For example, you take time away from your family so you can do the job. Who takes care of your kids? Who grows the potatoes for your dinner? Where do you find time to build a shack to shelter your family from the cold?

If you’re going to tend the job your employer needs done, who will take care of your needs? Simple: your employer. A company must compensate, or counterbalance, for what it takes away from your life — or you will not be available to do the job you’re hired for.

What kinds of compensation are there?

An employer could provide you with housing. (Coal mines used to build entire towns to house their workers. We won’t get into how this system was often abused.) Or, it could give you food. (Restaurants often feed their workers.) In recent times, companies have provided on-site day care for children, or have allowed employees to bring pets to work. If your mortgage, meals, and child care were covered, salary might not be the only salient component of your compensation. You might instead focus on negotiating for a house rather than a shack; for education in addition to child care; and for steak rather than potatoes for your kids.

Did you negotiate for any of those things the last time you entertained a job offer? Maybe you should have, especially when the employer couldn’t cough up the cash you wanted. (See How I negotiate compensation.)

Of course, the list of potential forms of compensation is virtually endless and depends on the company and on you. The challenge is to explore the best, most reasonable alternatives together.

Compensation: Negotiate beyond money

Now, some of these examples are admittedly extreme. But when a company is strapped for cash, should you hang your head and walk away? For better compensation, negotiate beyond money. The smart job hunter knows to shift the negotiation to non-cash, non-salary forms of compensation. You can suggest acceptable alternatives and help the company identify ways to “make amends for” its inability to compensate you in cash. To do this, you must be able to express your needs in terms that can get them satisfied.

Cash futures. If a company can’t match your salary requirements, but you still want the job, don’t fight it. Instead, put other compensation options on the table.

These might include “cash futures”: company stock, an early review with a guaranteed raise, an incentive plan based on agreed-upon performance criteria, guaranteed severance upon termination, elimination of a non-compete clause, or a retention bonus payable once you’ve been on the job for one year.

Salary alternatives. Then there are indirect benefits, on which a company gets a discount (think tax write-off, too), but which deliver value to the employee: computer equipment and other technology to use at home, extended paid vacation, a transportation reimbursement, an expense allowance, child care benefits, a paid cell phone, education benefits, and tax advice services or even payment of taxes (not uncommon for executives).

Priceless time. There’s also quality-of-life compensation: flex time, sabbatical leave, unpaid time off and, nowadays, the freedom to work from home. Most people crave more control over their schedules. You won’t get paid for those summer Fridays off, but if a company can’t afford a full week’s work anyway, you still have a job to go back to on Monday.

Money is great because it’s fungible. It’s an almost universal medium of exchange. It gives us the freedom to buy what we need. But when cash is tight, there’s also freedom in knowing how to negotiate beyond money to get compensated for our work in other ways. You must be able to discuss alternatives, because creative compensation terms might yield a job where there was none.

I’d never suggest taking a job that doesn’t pay well enough, unless maybe if you’re desperate. To be a really effective negotiator, you must be prepared to walk away from any deal that’s not good enough. But before you walk away from a good job with a good employer that “can’t afford you,” try to boost the compensation — negotiate beyond money.

Have you ever foregone higher salary for something else important to you? Have you successfully negotiated beyond money? What are the top three forms of compensation for you? What’s the most unusual form of compensation you’ve received for your work?

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Just Hired: New boss, salary & job eliminated!

Just Hired: New boss, salary & job eliminated!

Question

I got really good vibes from the manager that interviewed me. The offer was very good, and everything went so well that I turned down another offer to take this one. After a week of training, POOF! I learned there was a management upheaval, with my new boss and job eliminated. I may have to take a salary cut and get reassigned, or just leave and start my job search again. But what I want to ask you is, is it even possible to avoid something like this? Is there anything I could have done?

Nick’s Reply

job-eliminatedThis is a twist on the rescinded job offer. You’re still employed — with your boss and job eliminated, and your salary cut! While a company’s imminent restructuring may be highly confidential, there’s a way you might have gathered critical information that could have kept you out of trouble.

The key to this approach is understanding that people love to talk and to gripe. Help them do it. No company can totally hide upcoming management changes, especially from employees. If you have enough conversations with a company’s employees, I think you’ll find that more than one will hint at imminent changes and potential problems — if they don’t come right out and tell you what’s wrong.

Chart the players

A legitimate approach is to chart and meet the players. It’s prudent to know who you will be working with, how good they are at their work, and how they will affect your success. These are also the people who can tip you off to possible problems in the organization.

While you may not be able to actually pull off what I’m about to suggest, consider this an exercise to work through. I think as you try it, you’ll come up with one or two tactics that you can actually apply that will be helpful in the future. When you’re done, you should know enough about the organization to avoid getting blindsided by a management change that could hurt you.

Does it all add up?

Look for inconsistencies across all the conversations you have. Does information add up about the job and who the boss is?

  1. Before and during your interviews, draw an organization chart around the job you’re considering.
  2. Overlay a picture of what your workday and your work month would look like.
  3. Lay out the tasks you’ll be doing, and then draw lines to all the departments and specific people who will be working with you and whose work will impact your ability to do yours.
  4. Ask the manager to help you create this chart.

Then explain that you’ll need to meet some of these people — all of them, if possible. The meetings can be brief, but they’re critical.

Sound farfetched? If you were a professional sports player, you’d know who’s on the team you’re joining, and exactly what your role would be. That would affect your decision to join up. It’s the same here.

Look for the truth

If the employer balks, explain yourself simply: “I work hard and I’m a great producer. Some people will be significantly affected by my work, and they will affect my ability to do my work as well. It’s in all of our interests to make sure we can work together. So I’d like to meet everyone.”

You need multiple data points to get an accurate picture of this “opportunity.” The more people you meet in the organization, the better.

Managers are a special case in your little drawing. If you had met more managers in the company, I’m betting you would have learned the truth, that a change was afoot. (Such a thing is difficult to hide.) Once an interview gets serious, it’s reasonable to ask, “Will I be working for you personally for the next year? If I’m your direct report, will I report to anyone else on a dotted line? Do you foresee any changes in this job in the coming year?”

Of course, they might lie to you. All you can do is test them.

I’m sorry you were blindsided. Companies are of course free to eliminate jobs and change managers. That’s why you must control your interviews and learn all you can before they leave you holding the bag. You deserve to know in advance whether a job is about to be eliminated, your pay cut, or the boss removed.

Ever report to a new employer only to find the boss and job eliminated, and the pay not what you were told? How do you ensure you know what you’re actually getting? Should this reader just quit and try elsewhere?

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Is this the right company for me?

Is this the right company for me?

Question

When I consider doing an interview or accepting a job offer, I’ve always just picked what felt best, but how should a person decide? The money and the job itself are obvious but how do I know a place is the right company for me to work? I’ve made some mistakes and I’d rather not make another! Thanks!

Nick’s Reply

right companyUltimately, this is one of the biggest career questions you must face. I find that people go job hunting mainly because they joined the wrong company to begin with. As you realize, money isn’t everything. And I know you’ll know when the money is right.

I take five key factors into account when I try to help a job candidate decide if a company is right for them.

These are the fundamental criteria on which I think you should judge an employer. Evaluate an employer based on:

  1. its people,
  2. its products,
  3. its finances,
  4. its prospects, and
  5. its reputation.

Define these anyway that makes sense in the situation. You must explore each of these factors in as much detail as you can. (If we have to pick the three most important of those, I think it’s 1, 2 and 5.)

As you make your inquiries, you’ll see that some aspects of this approach are a little touchy-feely in nature, and some require objective research and analysis. This approach requires a lot of something you probably do in your work: talking with people. (See also: How can I find the truth about a company?)

You could fill a book with information about just one company. But you must decide how much is enough.

So I put it out there to everyone: Is this list sufficient? Would you skip over any item? What would you add? How would you flesh out each of the criteria?

Maybe more important, how would you get the information you need to effectively assess whether a company is the right place to work? What questions would you ask?

Have a Happy Thanksgiving!

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I really want this job!

I really want this job!

Question

How long should I wait before checking in on a late-stage interview process that’s gone silent? I’m interviewing for a top software engineering management role after being asked to apply by the CTO. I really want this job.

The role would report to the CTO, with whom I interviewed twice, and then once with the engineering team. That last interview was three weeks ago, and I haven’t heard anything since. They didn’t tell me what kind of timeline to expect. I really want this job, and I’m going crazy waiting to know what happens next. Will checking in to soothe my anxiety damage the relationship? Do I have to wait some more weeks in limbo? Thank you so much for your help.

Nick’s Reply

I really want this jobThis may be hard to hear, but the worst thing you can do is “really want this job.” The truth is, most interview processes go south. The only way to plan around that is to focus your next opportunity.

If you sit and wait for that CTO to make a decision while you’re on pins and needles, it’s going to hurt you. Get out – go date some other companies pronto!

Then, if this goes south, you’ll feel a lot better for having “live” options.

Keep this in mind: You have NO control over that employer and you will never have any idea what transpired if they don’t hire you. The only thing you control is what I refer to as “On to the next!”

If you really want this job, ask now

Having said all that, I’d send a very casual, very informal note to the CTO. There is no need to wait longer.

How to Say It

“How are we doing on that position? I’m still interested. Are you?”

Don’t get all formal and wordy. (Avoid saying you really want this job!) If he says yes, then ask for a timetable.

How to Say It

“I’m talking with other companies. You’re my first choice. I want to work with you. But I certainly understand if you haven’t made a decision. I hope you understand I have a timetable of my own, and I don’t want you to think I’ve lost interest. Can you tell me when you expect to make a decision?”

By the way, never use the exact words I suggest. Bend “how to say it,” shape it so it fits your style and makes you comfortable, and always use your own best judgment.

It is possible they’ve got other fish to fry. Sometimes it can take a long time. But after this much time a CTO owes you some information.

On to the next!

If he says there will be no offer, there’s little you can do. If he says he’s got no info for you, then you to focus on “On to the next!” and let this guy simmer on low. If he comes back, great. If not, make sure you have alternatives.

Three weeks is a long time. Has his silence “damaged the relationship?” Ask him what’s up as offhandedly as you can, with a friendly come-hither tone. Expect a useful answer, then get on with it.

I hope you get the job. Like I said, this could just be a matter of the company being occupied with other tasks. But by letting a candidate stew, they risk not being able to fill a key job. Letting them know you may be gone by the time they get their act together will relieve your stress and also maybe help you find the job where they really do want you.

Waiting on one lottery ticket to pay off never paid anyone’s mortgage. Get back in the game now!

This may help: I’m still waiting for the job offer. If you feel you need one-on-one help, check Talk to Nick.

How long do you wait to ask for a hiring decision? Have you ever put your job search on pause while waiting on a job you “really want,” only to realize you’re left empty-handed? How would you advise this reader?

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4 answers about signing bonuses

4 answers about signing bonuses

Question

When it rains, it pours! Two of my friends got new jobs and both were offered signing bonuses. Is this common now? I have a few questions about signing bonuses.

  1. What is a signing bonus?
  2. Is there a “gotcha” I need to know about?
  3. When is a signing bonus typically paid out?
  4. Is a signing bonus taxable? If yes, at what rate?

Thanks for your answers.

Nick’s Reply

signing bonusYes, I’m seeing more signing, or “starting,” bonuses nowadays. Let’s answer your questions in the order you asked them.

1. A signing bonus is a one-shot deal

In a competitive job market, companies do all they can to attract the right kinds of people. If a company really wants to hire you but fears a competitor might snatch you up first (or that you’ll stay with your current job), they’ll pony up a bonus to get you to sign on. Or, they may offer a one-time bonus to compensate for something you’ll be forced to leave behind at your old job — like an imminent raise or sales commission.

That’s what a signing bonus is: a one-time inducement (though it may be in multiple payments) to get you to take the job.

2. Some signing bonus gotchas

Any bonus is a good thing, as long as you understand the terms. Here are some gotchas that may surprise some people.

Be aware that the bonus probably won’t affect your salary, or a review and raise, or the basis for any life insurance coverage, or your 401(k) program. That is, if you accept a salary of $100,000 and a signing bonus of $20,000, and you’re given a 5% raise next year, your new salary will be $105,000 — not 5% X $120,000.

Any benefits you get that are based on salary will not be affected by that bonus, because it’s usually not considered salary.

Companies love that, because it’s a short-term, one-time expense to them. Don’t let anyone convince you that a $100K salary plus a signing bonus of $10K is the same as a $110,00K salary without a bonus. Long term, there can be big differences because there’s nothing long-term about a one-time bonus.

Here’s a particularly sneaky gotcha. An employer hired a hotshot sales person and made the signing bonus contingent on the new hire turning over their book of business to a more senior sales person in the company. It was a nasty surprise because the new hire didn’t read the agreement carefully.

3. A signing bonus may not be paid all at once

Signing bonuses can be paid out any way the company wants (and you agree). It’s likely to be paid out over time. That’s because your new employer wants you to stick around. After all, you could accept the job, pocket the entire bonus, and quit six months later.

They’re probably going to spread the payments out, or make you sign an agreement saying the bonus is recoverable if you leave the job in less than, say, a year.

In some cases, they won’t make any payment on the bonus until you’ve been on board for an agreed-upon period of time. Read the fine print, and negotiate.

4. Tax consequences

I don’t give tax or legal advice, so you should check with a CPA and perhaps a lawyer about your specific situation.

Generally, a signing bonus is typically taxable as income. It’s considered part of your total earnings, and whatever your income tax rate is, that’s what you’ll pay on the bonus. The only way around this expense is if the company factors it up to cover the tax on the payment — but you still pay the tax. (Factoring up makes an interesting negotiating gambit.)

At executive levels complex deals can be struck using financial tools and techniques we mortals are not likely to have access to.

Settle it before accepting an offer

You should get all your questions about a signing bonus — and all aspects of your compensation — answered before you accept a job offer. If what you’re told is not reflected in the written offer or agreement, insist that it be added.

The terms of signing bonuses vary from situation to situation. If an employer offers a signing bonus, settle all the details in advance.

Negotiate.

Finally, remember that a signing bonus is just as negotiable as any other part of an offer. In fact, if no signing bonus is suggested as part of your job offer, you can ask for it.

If the employer absolutely won’t budge on salary, and you won’t accept what’s offered, suggest that a one-time signing bonus could close the deal without breaking their salary rules and scales. Of course, keep in mind that this won’t have the effect of a higher basis for raises and other benefits — but it’s still more money for you.

Have you been enticed to take a job because they offered a signing (or “starting”) bonus? How was this bonus structured? Were you able to negotiate it? When is it smart to accept such a bonus, and when might it not be so smart?

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The data say, Demand bigger salaries!

The data say, Demand bigger salaries!

Question

I’m about to get a job offer from a company I want to work for. They asked how much I want. The talent shortage must be producing bigger salaries in job offers, so I’m inclined to ask for the top of the range I’ve researched. But I’m also nervous about going too high and turning them off. Is there a safe middle ground?

Nick’s Reply

bigger salariesLike you, I like the middle ground. Most of the time. But this isn’t most of the time. In fact, I believe we’re living in a time when there’s good reason to take bigger risks to get bigger rewards.

Why? Because on the whole, companies are pulling down unusually higher profits hand over fist. They can afford to pay you more. There’s data to prove it.

Days of bigger salaries

This is the time to ask for more, even to demand it and gently signal that you will walk away from that hard-to-fill job if they don’t meet your salary requirement.

Savvy investors tell us that the big gains are made when we encounter unusual circumstances in which our chances of a big win are somewhat higher than normal. That can make it worth the attendant risk. Of course, only you can decide how much risk you will tolerate.

I would ask for more money. I’d ask for the top of the range or more. Now let’s discuss why job applicants should demand bigger salaries today.

Employers need to hire

I don’t need to link you to 10 articles about employers crying they can’t fill jobs because of “the talent shortage.” And I don’t need to give you an Economics 101 lesson in supply and demand. (Ah, what the heck! When supply of labor is down, wages go up.)

If so many employers are desperate to hire, they must be paying top dollar to get workers like you on board, right? Wharton labor researcher Peter Cappelli suggests that, on the whole, they’re not.

What do you mean, real wages are down?

In an October 2021 report Cappelli writes that “Wages are not rising dramatically, at least on average. A shortfall between a big demand jump and a modest increase in supply should not necessarily cause a shortage in a market economy. It should cause prices — in this case, wages — to rise.”

But despite their posturing about recruiting aggressively to fill those vacant jobs, Cappelli notes employers are not offering competitive market pay. In fact, he says, no matter what anecdotal stories the media broadcast, the data tell us “Real wages have fallen by the largest amount in decades.”

And that’s why you should ask for higher pay. In fact, if you don’t demand a higher job offer, you may be getting lower real pay than you even realize.

Inflation is hurting workers

Cappelli continues: “The idea that wages are rising dramatically just isn’t true…  workers are living in a world where their money isn’t going as far as it used to due to rising costs of goods and services.”

We call that inflation. “Real wages” are wages adjusted to account for rising consumer costs.

And, today, it’s even worse than Cappelli suggested last fall. In its April 12, 2022 Real Earnings Report, the U.S. Bureau of Labor Statistics tells us:

“Real average hourly earnings decreased 2.7 percent, seasonally adjusted, from March 2021 to March 2022. The change in real average hourly earnings combined with a decrease of 0.9 percent in the average workweek resulted in a 3.6-percent decrease in real average weekly earnings over this period.”

But inflation is enriching companies

Maybe employers just can’t afford to pay higher salaries, eh? Maybe you should bite your tongue and tell that employer you’d be happy in the middle of the salary range. Play it safe.

But you’d be wrong, and you’d be dumber than greedy corporations, says Lindsay Owens, the executive director of the Groundwork Collaborative. In I Listened In on Big Business. It’s Profiting From Inflation, and You’re Paying for It, Owens reviews hundreds of corporate earnings calls she’s listened to — “calls, where, by law, companies have to tell the truth.”

“The Federal Reserve chair, Jerome Powell, said that sometimes businesses are raising prices just ‘because they can.’ He’s right. Companies have pricing power when consumers don’t have choice.”

The examples she cites are chilling because CEOs brag about unheard-of profits triggered by economic factors that hurt consumers and, therefore, workers and job seekers.

  • “What we learned on these earnings calls was quickly reflected in data. Despite the rising costs of labor, energy and materials, profit margins reached 70-year highs in 2021. And according to an analysis from the Economic Policy Institute, fatter profit margins, not the rising costs of labor and materials, drove more than half of price increases in the nonfinancial corporate sector since the start of the Covid pandemic.”

Owens reports one profit brag after another during the earnings calls:

  • “As Hostess’s C.E.O. told shareholders last quarter, ‘When all prices go up, it helps.’”
  • “Executives on their earnings calls crowed to investors about their blockbuster quarterly profits. One credited his company’s ‘successful pricing strategies.’”
  • “Another patted his team on the back for a ‘marvelous job in driving price.’”
  • “The head of research for the bank Barclay’s said ‘The longer inflation lasts and the more widespread it is, the more air cover it gives companies to raise prices.’ More than half of retailers admitted as much when surveyed.”

Corporations can afford handsome job offers

Companies are intentionally jacking up prices to consumers to boost their profits — using inflation for “air cover” — while they pay lower real wages. Is there anything illegal about that? Probably not. Nor is there anything wrong with you jacking up the salary you want if a company is flush. And in this economic climate, it may be prudent to pursue only employers that are flush.

This is why, in today’s economy and job market, you should always be ready to ask for more money. I’m forever telling you to make sure your job delivers profit to your employer. Now I’m telling you to make sure employers that are bursting with colossal profits deliver a concomitant share to you in the form of higher salary. Lindsay Owens might say this is the best time in 70 years to go for the gold.

(See More Money: What to ask for in a talent shortage.)

Find one smart, good employer

Are all employers so greedy that they make below-market job offers so they can hoard profits? For that matter, are all employers laughing all the way to the bank? Of course not. But successful, smart employers see an opportunity to hire the best workers by sharing their good fortune via higher salary offers. Why work among pigs?

Even if, as the data suggest, most employers are killing real wages, a wise job seeker takes refuge — and finds hope and patience — in the knowledge that they need only one good employer to make them one outstanding job offer.

But you have to ask for — even demand — bigger salaries.

Peter Cappelli offers compelling tough love to employers, and advises “looking beyond just signing bonuses and modest wage increases, instead considering what’s possible in compensation in order to attract and retain the workforce you need and want.”

Could following my advice to demand bigger salaries lead a greedy employer to boot you to the curb because they’d like to hire you for less? Could the message in this column cost you a job offer entirely? Yep. So use your judgment and do the best you can.

Me? I’d ask for more because the data tell me profit-rich companies can afford it. If they’re not willing to share their rising profits with their workforce, I’ll go find an employer that will. It’s that kind of economy. The data tell us it’s that kind of job market.

Are bigger salaries a thing? Can you actually ask for the top end of a salary range and get it? What’s your experience? Got any examples of corporate greed and low-ball job offers? How have you gotten more money from an employer?

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Kick the job candidate out of your office

Kick the job candidate out of your office

Question

The current employment climate seems to be the new normal. At my company it’s just very difficult to get new hires. There’s a lot of speculation about why the labor market is so tight, but no one has really identified the reason. (Do you have any ideas?) That’s why I’m reconsidering how I interview a job candidate. Once I get them to meet with me, I want to optimize my chances of actually getting them on board, assuming they’re the right person! The traditional interview just doesn’t do it. Can you offer any tips on how a manager can run the job interview for a better outcome? I can’t afford to keep wasting good applicants! If I can pull this off I’ll be a hero. Thanks.

Nick’s Reply

job candidateI like a manager that realizes it’s time to upend the recruiting, interviewing and hiring process. My compliments. (We covered your question about why it’s so difficult to fill jobs and hire people in last week’s edition.)

I think what motivates a good candidate to want to work for you is the depth of the interview experience. Most interviews are superficial, canned, and uninspiring. If you can make your meeting truly engaging and memorable, I think you increase your chances of an offer being accepted dramatically.

Don’t interview in your office

I’ll offer you a specific tip that may help, and my guess is your HR department has never suggested it. The method is to break the script of the traditional interview entirely. The objective is to relax the job candidate so you can assess them more effectively, and to make it easier for you to get to know one another better in a realistic work context. I think this leads to wiser decisions about working together.

Note: I’m not going to give advice limited to our “virus age.” I know much interviewing during this time is done as remotely as some jobs are. In-person interviewing and hiring will return. These ideas can fit in either case with a bit of bending and twisting. Let’s discuss how in the Comments section below!
The first thing to do once you and the candidate have met is to kick the candidate out of your office! Yup — I’m serious. The worst place to interview anyone is in your office. Why? Because it’s a sterile box that’s removed from the action. It’s not where you’re going to learn whether they can do the job. And it’s not where they’re going to learn what they need to know to take a job with you.

Take the job candidate for a walk

When the candidate arrives for the interview, don’t sit down. Walk out of your office and take the candidate out onto your work floor. Whether it’s a marketing department or a production plant, start by introducing the candidate to your staff and showing them the work. Let them see your department. Show them the tools you use and the products you make. Let them meet your people. Encourage everyone to start talking and asking questions.

Encourage everyone to talk shop.

This way of assessing a candidate will quickly reveal to you why traditional interviews don’t work.

Traditional interviews don’t work

Typical interviews are indirect assessments, where you and the candidate spar over the Top Ten Stupid Interview Questions. What I’m suggesting is a hands-on experience where the focus is on the work of your department — and where you can directly assess the candidate’s personality, skills, attitude, smarts and fit with the job and your team. For example:

  • Show the candidate your products (discuss how the job affects product quality, delivery, etc.)
  • Show the candidate the tools they would use (see what they know about how the work is done)
  • Have the candidate sit in on a “live” work meeting (observe how they participate)
  • If there is a company cafeteria, take them to lunch, where they can meet loads of other employees (do they click?)
  • Introduce the candidate to managers and staff in departments “upstream and downstream” from the job they’d be doing, so they can see how their work would fit into the business (does the candidate understand the business?)

You will learn more about the candidate by exposing them to the rest of your team than you ever could by sitting in your office. You’ll learn how smart and how motivated they are by how they interact with you and your team, by the questions they ask, by the opinions they offer and by the skills they demonstrate. If you’ve really got a gem of a job applicant, they will dig in and show you how they’d do the job. You will also learn very quickly how they fit in with your other employees.

Help the candidate decide

If you’ve got a good job candidate, this approach should give them many data points, in a real, live setting, to help them decide whether to join up. Of course, this requires that you’re offering them a good job working with good people in a healthy company!

I call this Interviewing By Wandering Around™. When the job candidate and the manager are in the middle of the work, everyone relaxes and it’s easier to talk about what matters because there it all is, right in front of you: your business. A bonus is that no candidate can fake it in front of you and your entire team. There are no clever “behavioral interview” questions or answers to memorize.

Of course, if you have standard interview questions you like to ask, you can still ask them during your “cook’s tour.” But I’m betting some of those questions will suddenly seem silly to you. Why ask what a candidate did last year, when you can let them show you how they’d do this job now?

Kick the candidate out of your office if you want to entice them to come work with you. Show them around. I think you’ll both learn a lot about one another and your workplace.

Do traditional job interviews work? How about behavioral interviews? A job candidate often walks away from even a successful interview still unsure whether they want the job. What has a manager done to make you want to join up? How could my suggestions be applied if your interviews are not in-person?

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Rescinded job offer: Did you dodge a bullet?

Rescinded job offer: Did you dodge a bullet?

Question

I’d like to bring up an old subject — a rescinded job offer. I’ve been a reader for a while and have been helping my father in an interview process. He has been in the construction industry for 30-35 years and consistently climbed the ranks from laborer to owning his own construction company and hiring and managing project managers. He was recently approached for a president position at a mid-sized company. I spruced up his resume and helped him prepare for the interviews.

rescinded job offerAll went well. They said they wanted to grow the division to 3X its size under his leadership, and that they would make it worth his while. We were shocked when the offer came through without mention of any incentive plan to meet the ambitious growth objectives that were a cornerstone of their discussions. The offer was just a solid salary and a promise of a “review in 6 months.”

He was disappointed but still interested in the job, and he wanted to think it over for a few days. He had some concerns about the leadership team and the way this job would change his life. On day 2 they gave him a deadline to decide: evening of the next day. He replied, asking until the afternoon of day 4. On the afternoon of day 3 they rescinded the offer because they wanted someone who was “all in.”

I believe he dodged a bullet. The sudden rush for a decision, no plan to reward the ambitious growth they want him to commit to, and the sudden withdrawal of the offer —  these are all red flags to me. What are your thoughts? Am I off base?

Nick’s Reply

Last week we discussed how job opportunities go south. This is special case because a tendered job offer went south! Sometimes you cannot see an employer clearly until you witness its behavior after it makes you a job offer. These people sound like jerks, and I’ll explain what I mean in a minute.

What’s behind a rescinded job offer

First let’s look at the facts and at the employer’s behavior. These are signs a job offer might be rescinded.

  1. They came to your father; he didn’t approach them. In such situations, the employer should be extra respectful (they want you to marry them!) and deferential (no rush for intimacy!). This employer demonstrated neither the appropriate respect or deference.
  2. Their pitch was not matched by their offer. I agree – there should be terms in the offer about rewards for meeting the key objectives for the job. It appears that 3X growth is a cornerstone of this job, so where’s the support in the offer?
  3. You don’t woo someone that you really want to hire by giving them ultimatums.
  4. It seems to me this company was not “all in” on hiring your dad, and while there are several indications, it became starkly evident when they ignored his request for an extra day. Granting it would have been a courtesy — and a sign of good faith.

Based on what you’ve shared, I agree your dad dodged a bullet. I think the company rescinded the job offer because your dad’s hesitation signaled that he saw problems — and this employer likes its executives to be a little bit blind. The reason for my conclusion is simple: What you see is what you get. If he accepted the offer under these circumstances, he should expect to be treated exactly this way once he’s in the job.

Pursue dreams, not nightmares

Regular readers know that my mentor taught all his students this rule: “Never work with jerks.” The dismissive behavior of the company reveals jerks. Withholding a simple courtesy that your dad requested, and pulling the offer without any discussion, tells us all we need to know.

I know your dad is stinging a bit. It’s understandable that he was having dreams of running a larger company, growing a business, getting rewarded for doing a heavy lift (3X growth would indeed change his life!), and rising to the level he thinks he deserves. It’s hard when you can see it and taste it, it’s so close. But when we look at the reality of this deal, this company is not part of that dream. He’s got good dreams that he should absolutely pursue, except not with jerks that almost dragged him into a nightmare.

Turn the tables

The only advice I’d offer in retrospect is this. Since your dad had reservations about the management team, he could have bought more time to consider the offer. Rather than ask for more time to think about it, he could have turned the tables and asked for one more round of meetings with the executive team.

How to Say It
“For our mutual benefit, I’d like to make sure we’re all on the same page regarding the company’s ambitious growth plans. Before we finalize our decision to work together, I’d like to suggest we meet to review our objectives and plans for growth. Is your team available tomorrow?”

I could be wrong, but I think that might have bought him more time as well as more data points on which to base this important decision. I’m guessing the employer took more than 3 days to decide to make the offer! However, I don’t think any of this would have changed the outcome, except perhaps that your dad would have been the one to end the discussions.

Rescinded job offer? On to the next!

Please congratulate your dad on getting an offer to run a company. Even jerks recognize a talented manager, even if they don’t know to treat him. I’m sure your dad knows the difference between good people and jerks. In the throes of getting a job offer, we sometimes set aside our good judgment. Having had time to consider the signals this company gave off, I think your dad might see what life probably would have been like working there.

Please tell him I suggest that, now that he knows how to sell himself as a top executive, he should pursue that kind of job with good people at a healthy company that demonstrates respect and appropriate deference.

Some might view your conclusion and mine as “sour grapes.” But I really think the evidence you’ve shared tells us your dad dodged a bullet.

I hope something I’ve said is helpful. On to the next! I wish you both the best.

Is my analysis sour grapes? What could this executive job candidate have done differently? Was the employer to blame for rescinding this job offer? Have you ever dodged a bullet? What happened?

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Most job opportunities go south

Most job opportunities go south

Question

I went in for my interview and, as job opportunities go, all went great. I met with the HR manager and the Division Manager. They called me back in on Thursday to meet with the Regional Manager, since he was in town. It also went well. We mainly talked about outside activities and life experiences in a jovial laid-back manner. I went back in today to take a personality test.

I am forcing myself to not get too fired up about all of this. But, I have to think that no company would subject an applicant to all of this without leaning toward the hire. When should I begin to expect something in this process? I figure that there can’t be much more for me to do than meet with three six-figure managers and take a personality test. Is there?

Nick’s Reply

job opportunities“I have to think that no company would subject an applicant to all of this without leaning toward the hire.”

Expectations

Never, ever, ever succumb to this mindset. This is the point in the interview process where people start to set an expectation because they feel they’ve “invested so much.” They start to believe the employer is now “heavily invested,” too. And that sets their expectations.

Far, far worse, such expectations convince job seekers they can suspend further job searching “until this opportunity plays itself out.”

In fact, the best thing you can do next — once the interview process is done and you’re waiting for that offer — is to devote yourself to your next job opportunity. Let this one percolate, but don’t wait for the offer. You know what they say about watching water boil. Move on. Get your next interviews lined up!

Most job opportunities go south

The truth is, you have no idea what this employer’s threshold is for taking action. As a headhunter who has dealt with more interviews than you ever will, I can tell you that most job opportunities go south. Even when you think an offer is imminent, you won’t get the job. You’ll never know why. Don’t bother to guess. If you try, you’ll find nothing at the bottom of your frustration but self-doubt.

Do your best with this particular opportunity. Follow the process through. Ask for feedback and ask for a decision timetable. (That’s legit and important.) Maintain your enthusiasm, but don’t build expectations.

I’m not trying to discourage you. Motivation and a positive attitude are crucial. But never start believing “they’re going to make an offer, I can tell”. Because you can’t.

Don’t let this discourage you. I hope you get a great offer — and you might. But at this juncture it’s up to the employer. They control what they do next. Please use this advice to take control of what you do next. Never wait on the employer’s decision. Always be working on your next alternative — because most deals go south.

Were you convinced a job offer was coming, then it didn’t? What made you think so? Did you waste time waiting? If you’ve had this experience, what did you learn from it?

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Jobs vacant but managers seem in no rush to hire

Jobs vacant but managers seem in no rush to hire

Question

You’ve no doubt seen all the news items about how difficult it is to fill jobs these days because so many people aren’t interested in working. I’ve been trying to get a key job filled in my department. I’m in a rush to hire. I can tell you the competition is very stiff. Human Resources keeps losing hires to other employers, even though we’re making competitive job offers.

Today I’m really upset because, after 3 weeks of interviews (everyone was very positive about her) we lost a candidate I thought was a definite hire. When I spoke to her about 10 days ago I made it clear that an offer was being processed and I could tell how pleased she was! We just needed to get a final signature. (The finance manager that signs off was on a trip long put off because of the virus.) Finally HR told me they called her with the offer. She went to another company. What’s going on with people now?

Nick’s Reply

rush to hireI’m going to take a stab and read between the lines. You’ve lost lots of candidates you wanted to hire. You interviewed the most recent candidate over a period of three weeks — way too long. Then it seems you took over two weeks to get an offer out to her. My guess is that, in this highly competitive hiring market, you’re way too s-l-o-w… taking way too long to complete a hire.

Probably the single best way for a company to solve problems, boost productivity and be successful is to get the right people on board as quickly as possible. So, why does the hiring process seem to take longer than a presidential election campaign? Is it because we’re hiring presidents every day? Nope.

It’s because responsibility for hiring is broadly distributed. No one is really in charge of being in a rush to hire.

Who’s in a rush to hire?

It’s easy for a manager to think, “I’ve got the right candidate. I’m ready to hire! Now it’s HR’s job to put the offer together and make this happen.”

Or, “My V.P. has to sign off on this. It’s in his court.”

And, “I’m a busy manager. I don’t have time to baby-sit the job offer process.”

In today’s world, managers seem to have more important things to do than hiring the best people to do the work. For too many managers, hiring is not job #1. That’s why companies rely on HR departments and clerks to process employment paperwork — right? If managers like you spent their time just getting new hires on board, there would be no time left to run the business!

That’s the wrong attitude. Hiring is every manager’s #1 priority — or the business doesn’t run at all.

How long does it take to hire?

A search for statistics about how long it takes employers to make a hire turns up scarce recent data, which is revealing by itself. What’s the HR industry hiding? It appears to be such a tender nerve that reports from 2016 and 2017 are heavily cross-referenced even today. The most widely cited is from 2016.

The Society for Human Resources Management (SHRM) has reported that the average time to fill a position is 42 days. But, according to an OfficeVibe report, “The best candidates are off the market in 10 days.

Of course, time to hire varies by industry and position. We can only wonder how long it’s taking today, in the early post-COVID period when employers complain they can’t find enough good candidates. But common sense tells us that the faster you can hire, the better your chances of your offer being accepted.

My evidence is only anecdotal, but the best job seekers and candidates I’ve worked with say the employer that makes a good offer decisively and quickly scores big points. We don’t really have good, current data about how long it should take to fill a job. But we know that less is better. “We decided we want you now!” seems to count a lot to job applicants.

Managers: Make hiring job #1

Another thing candidates tell me is that they are impressed by can-do managers who take personal responsibility for getting them on board. “That’s the kind of boss I want!”

If you’re in a rush to hire, but you wait for HR to handle your hiring, consider this: You probably can’t fill vacant jobs because another manager in another company (One of your competitors?) is stealing your best candidates. She’s hand-walking a job offer through the system, pushing aside the obstacles, riding herd on her boss until the documents are signed, riding herd on the HR department to do its job, and getting everything processed the same day. The return on this manager’s time investment is huge. She’s got a new employee on the job, getting the work done.

Meanwhile, you’ve got vacant jobs. Your investment in this last candidate just got lost on the way through “the approval process.” Your top candidate went to work for your competitor. Impressed with the other manager’s can-do attitude, “your” candidate took the other offer. (See Why HR should get out of the hiring business.)

If you’re a manager, next time don’t be so busy. Replace the wait-for-HR-to-do-it attitude with your own initiative and expedited process. Make sure you’re interviewing only the best candidates. Interview faster. Eliminate delays. Make faster decisions. Hand-walk the job offer through the approval process the same day. Or, prepare to spend your valuable time interviewing more candidates while your competitor is busy hiring them.

Are job offers flying out fast? Are managers showing any rush to fill jobs? Whether you’re a job seeker or a hiring manager, what do you think hampers efficient hiring? What obstacles have you encountered? What could employers do to speed up the process?

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