Should you sign an NCA? Not so fast!

Quick Question

sign-thisI was offered a job with a small tech company. The NCA that they asked me to sign was so broad that it would have prevented me from taking a job with any other company writing embedded software. When I balked at signing it, they told me I would have to talk to to someone in their legal department.

I walked into their lawyer’s office and explained my objections. His reply: “If I were in your position, I wouldn’t sign that either. Let’s strike out the paragraphs you object to.” What do you think of that?

Nick’s Quick Advice

This is an instructive story about NCAs (non-compete agreements). Thanks for sharing it. It’s also a good lesson about negotiating job offers. It’s not just about the money!

People don’t always believe me when I tell them NCAs (and NDAs, or non-disclosure agreements) are very often negotiable, mainly because they’re ridiculous, and the legal people who write them know it.

These employers figure no one would question or refuse to sign “a necessary legal document” — especially when a new job hinges on it. And most job applicants wouldn’t dare. The lawyers go overboard and include terms and restrictions “just because they can.”

It makes you wonder how many people before you signed that thing simply because they felt intimidated.

I’d love to ask that lawyer whether he thinks it’s ethical for his company to keep using that document, and whether — now that he’s acknowledged how ridiculous it is — he’ll cancel NCAs that other employees have signed and produce a more reasonable agreement.

Or maybe the employer should just fire the lawyer who wrote it and behave more responsibly toward its employees and the people it’s trying to recruit.

I won’t even get into my opinion of an employer that can’t explain an obligation it wants a job candidate to sign — without sending you to its lawyer!

For more about NCAs, see How can I negotiate an NCA or NDA?

: :

Negotiate a better job offer by saying YES

In the July 26, 2016 Ask The Headhunter Newsletter, a reader plans to reject a job offer that might be saved.

Question

yes-butIn Fearless Job Hunting Book 9, Be The Master of Job Offers you suggest how to decline an offer when you have two job offers — so as not to burn my bridges. I’ve got a different problem. I should decline a job offer but I don’t want to!

While I have not received an offer yet, it became clear after the final interview last week that this department is not flexible about working hours. The job is in the middle of Boston, and it would increase my commute time. I am not willing to do that for this position. I want the offer, but can I be honest about the commute time as the reason I would decline?

Nick’s Reply

I’d be frank about your commute problem if they make an offer. But if you want to avoid ending the discussion, there’s a way to finesse it.

When I want to say no to a deal, I like to take an affirmative approach. So I say YES but. If all the other terms are to your liking, ask yourself, What would make me want to accept the offer?

Start with YES

Then phrase your response to the offer like this.

How to Say It
“I’d like to accept your offer. I want the job and I want to work on your team. But I’d like to discuss the terms with you, if you’re amenable to it.”

(You’re not actually accepting the offer. You’re starting a negotiation by saying you’d like to take it. Remember that negotiations aren’t just about money! There are lots of terms you can negotiate.)

Pause and let them respond. They’ll ask you, What terms?

How to Say It
“The problem is the commute. We all know commuting in and around Boston is a big challenge. The traffic is horrible. But I can deal with it if you could make an accommodation on the work hours. I’ll of course work at least X hours per day. I want to make sure I’d be delivering the value and work you need from me – I don’t expect you to compromise on that. But can we discuss a flexible work schedule to help me deal with the traffic?”

Note that you’re not demanding anything. You are asking for a discussion. No matter how they respond, you will have given an affirmative response and a request for a reasonable accommodation. If they blow it at that point, it’s on them.

Commitment enables negotiations

The power of this approach lies in starting out with YES. This is what most of the negotiating methods I discuss in Be The Master of Job Offers are about: — saying YES that means maybe, if you’ll work with me on the terms. This tells them the main question is already resolved – you want the job. All that remains is working out the terms, which you’ve indicated you’re happy to discuss, after you’ve notified them that the commute is the issue.

Believe it or not, the most important commitment you can make to an employer is to say you want the job. That commitment puts you on good footing to discuss terms.

Try it. The worst that will happen is they’ll say no. But when you’ve indicated you want the job, an employer is more likely to come back with an alternative that’s good for both of you.

I wish you the best with this. These articles may be helpful when you’re negotiating:

When to stop negotiating a job offer

13 lies employers tell about job offers

Don’t let employers always call the shots

The Bad-Business Job Offer: Negotiating not allowed!

How do you negotiate when you want a job, but the terms are not to your liking? What would you do in this case?

: :

Tell HR you don’t talk to the hand


Why does Ask The Headhunter look different? Because it’s mo’ betta! Learn all about it!


In the July 12, 2016 Ask The Headhunter Newsletter, a reader refuses to waste time interviewing with HR.

Question

talk-to-the-hand-2Your column HR Managers: Do your job, or get out reminded me that most of what HR does makes no sense, and it’s not smart to bend to HR’s will when I’m looking for a job.

HR always wants me to do a meeting with them first, before they’ll let me talk to the hiring manager, but that’s a guarantee of doom! HR knows nothing about the work I do, and rejects me before I can even meet with someone who is qualified to judge me and what I can do. I know your advice is to tell HR I won’t talk to the hand, but how do I actually say that without sounding like a jerk?

Nick’s Reply

“How to say it” is a big part of Ask The Headhunter — and I know this is where people often stumble. They know they have to push back sometimes, when an employer makes demands, but they freeze up when it comes to actually expressing themselves.

I get it. I used to wonder what the problem was, but I’ve realized that unless you’re dealing with these situations all the time, it’s hard to come up with the right words. Some readers can do it; others can’t. (If headhunters didn’t know how to do it, we’d starve.)

The specific challenge you’re facing is something I wrote about in detail in Fearless Job Hunting, Book 4, Overcome Human Resources Obstacles, pp. 5-6. Here’s how to tell HR you don’t talk to the hand:

Candidates don’t realize they can insist on interviewing only with the manager. (Why waste time with anyone else?)

How to Say It
If the employer insists that you meet with a personnel jockey before the hiring manager, try this:

“I’m afraid my schedule is very busy, and my time is limited. I’d be glad to meet with a representative from your HR department, but only after the hiring manager and I have met and decided that there’s a clear, mutual interest in working together. Once that’s established, of course I’ll make time to meet with HR.”

If the company balks, be firm.

”Thanks for your interest, but I’m afraid I’ll have to pass. If the manager decides to meet with me, I’d be glad to schedule some time.”

Then let it go. Move on to another opportunity, where the employer respects you and your time.

Is this risky? Of course it is. But so is wasting your time with someone who isn’t qualified to evaluate you. “Playing along” isn’t going to change this. It’ll just demoralize and frustrate you. (See How HR optimizes rejection of millions of job applicants.)

The approach I recommend emphasizes that your time is not free — it’s valuable. And, while you might respect HR’s role in hiring, you’re no dummy — you know that only the hiring manager is qualified to judge you. If the employer is really interested in you, HR will back off and respect your wishes and your time. If they’re just putting you through a mindless meat grinder, then it’s better to find out up front. That’s what makes this a good test of whether you’re looking at a real opportunity, or the blind leading the blind.

I’m glad you found the HR Managers: Do your job or get out helpful. But it wasn’t just a challenge to HR. It’s also a challenge to you. Are you willing to stand up for yourself, and for sound business practices?

HR’s behavior will not change as long as job seekers keep agreeing to silly demands. Why would you want to get screened by HR, when HR isn’t expert in the work you do? Would you let the gardener tell you not to knock on the homeowner’s door? (See Should I accept HR’s rejection letter?) You don’t have to talk to the hand.

If you want to optimize your chances of winning the right job, keep your standards high, and don’t do foolish things just because someone tells you to. Insist on meeting with the hiring manager first.

Are there “magic words” you use when HR confronts you with unreasonable demands while you’re applying for a job? Please tell us “how you say it” when you tell HR to take a hike. Let’s talk about where you draw the line, and about what works.

: :

How can I negotiate an NCA or NDA?

In the June 21, 2016 Ask The Headhunter Newsletter, a reader doesn’t like giving up future opportunities by signing restrictive agreements.

Question

First of all, thanks for writing your columns and educating us folks out here. If we ever form a union, you’ll get my vote for union leader! Anyway, I was wondering about non-competes and NDAs. I know you’re not a lawyer, but I’d like to hear your thoughts on the subject.

valueI can understand why companies want and need non-competes and NDAs, but I feel signing such contracts limits my future job opportunities; at least the ones that would pay me the most. So, I could refuse to sign, and they can refuse to hire me. If I want the job, it seems I’ve gotta bite the bullet. Perhaps I could sign the contract as “Darth Vader” and they won’t notice.

Is there a fair, balanced deal that I could make here? Thanks for your thoughts.

Nick’s Reply

Ouch, you’re hitting a nerve. Non-compete and non-disclosure agreements (NCAs and NDAs) are a sore spot with me because I believe they’re over-used, misused and too often signed. Nonetheless, both documents are becoming more common. Heck, they’re such boilerplate that you might be right — you could sign as Darth Vader and they might never notice! Some companies might just file the darned thing without looking at it any more carefully than they expect you to. But, don’t bet your future on that.

What’s an NDA or NCA?

For those who don’t know what we’re talking about, an NDA is an agreement you sign as an employee prohibiting you from divulging sensitive company information while you work at the company and often after you leave. When you sign an NCA you agree not to compete with your employer (now and when you leave) by soliciting its customers, going to work for a competitor, or through other actions. Sometimes, an NCA and an NDA are rolled into one document.

I think companies often use NCAs and NDAs for no other reason than because “everyone else does it.” The fact is, these agreements are very controversial. In some states NCAs are illegal because they restrict a person’s right to earn a living. Nevertheless, when you take a job, it’s up to you to protect your rights.

There are some legitimate reasons for a company to ask you to sign such agreements; for example, when you’ve worked on a sensitive trade secret that, if leaked, could cost the company a lot of money. It’s up to you to decide what’s reasonable, or to discuss it with an attorney who represents you, not the company.

Negotiate the terms

There’s no reason to get into an argument with a prospective employer about an NCA or NDA. The best thing to do is negotiate it. Because these agreements are often legal boilerplate, a company that really wants to hire you may be willing to negotiate specific terms that you object to. You may be able to get both the compensation deal you want and a comfortable agreement.

Your goal with an NCA or NDA is to limit the constraints. Here are some terms to negotiate:

  • Geography: A 100-mile radius of non-competition may be reasonable, but a blanket “all of the U.S.” or “all the world” is just nuts.
  • Term: One year may be acceptable, but a five-year restriction is not.
  • Competitors: Prohibiting you from working for any company in an entire industry is extreme. Try to get them to list specific companies by name. Make sure the list is short and realistic.

In light of the limit that an NCA or NDA might place on your future job opportunities, I recommend getting quid pro quo. That is, get fair value for anything you relinquish — and work this out before you accept a job, not after you’re on board. An employer has no incentive to re-negotiate an overly restrictive NCA or NDA after you’ve already joined up.

Trade fair value

When a company wants an NDA or NCA to protect its interests, then you should get something to protect yours. Always trade fair value. If a company is going to restrict your ability to earn a living, it should compensate you reasonably.

Get a contract.
If you agree not to go work for a competitor for a year (by signing an NCA), then don’t agree to work “at will,” whereby the company can let you go any time it wants. In exchange for signing an NCA, request an iron-clad employment contract. That way, if the company terminates you, it agrees to keep paying you through the end of your contract. The NCA gives the company protection (perhaps for a year), and the employment contract protects you (for a year also). By asking for a year, you might be able to get six months’ pay, if you consider that sufficient.

Get a severance deal.
Another quid pro quo for an NCA or NDA is a significant guaranteed severance deal. Ask for it, since your choice of next employers will be limited. Negotiate a severance package as a form of compensation for relinquishing your right to compete or to “talk about your work.” (Be careful: A blanket NDA can actually restrict you from talking about work you’ve done that is not even proprietary to the company!)

What might be in a severance package varies. Usually, severance is one week’s pay for each year you worked at a company. But in this case, we’re not talking just about severance; we’re talking about a special deal that compensates you for relinquishing some of your freedom. In my opinion, if you sign a one-year NCA, the company ought to cover you for at least a year after you leave, or until you land a new job that does not violate the agreement. (If that sounds extreme, so is an NCA!)

If the company’s not willing to compensate for protection, then it should not require an NCA or NDA. It should instead keep better control over its proprietary information and avoid divulging to you anything during your employment that might compromise the company when you leave. It’s up to the company to manage its assets — not you.

If any of this perplexes you, it’s smart to consult an attorney. It will cost far more to defend yourself later than it will to protect yourself now. (For some valuable insights from my favorite attorney, Bernie Dietz, see Employment Contracts: Everyone needs promise protection.)

Thanks for your kind words about Ask The Headhunter. But, no thanks — don’t elect me as your union leader!

Have you ever signed an NCA or NDA? Did it come back to bite you? Or, did you negotiate compensation for a fair restriction? How would you advise this reader?

: :

When job interviews are bad for you

In the June 7, 2016 Ask The Headhunter Newsletter, a job seeker expects more from employers.

Question

Push Back!When a company wants to interview me, I apply your advice and try to exert some control by asking that the hiring manager be present at my first interview. I think it’s inappropriate for an employer to ask me to invest hours of my time without that manager present. It worked recently with a small advertising company, and it actually helped the two-way respect, and I felt more confident talking about the role and compensation.

But, what to do when it’s a large conglomerate, like an Apple or GE? I’m in the hiring process with two large companies (not those) and the process has been difficult and very drawn out. While I’m sure these companies have their reasons for doing it this way, it seems to be a waste of time. I guess you always have to be prepared to walk away. Any advice?

Nick’s Reply

Good for you for pressing to have the hiring manager in the interview when you can! I’m glad you’ve seen it will work to your advantage.

Even if the outcome is that the manager rejects you, at least it’ll be early in the process and you won’t have to waste more time, and at least the rejection will come from the person in charge of the job — not some personnel jockey who doesn’t understand you or the work.

At larger companies, the problem (as you note) is that the hiring process is more rigidly structured. It’s hard to get them to do anything different — like let you meet the manager immediately. While a company may have its reasons, it’s still disrespectful and a waste of time for the applicant to get assessed by someone other than the hiring manager.

And again, you’re right – you must decide whether to walk away.

Finesse the encounter

This is where judgment and finesse come into play. If you really want to work at a company, and there’s no getting around their system, you must decide whether it’s worth the risk you’re taking by complying with a process that isn’t to your advantage. But I don’t think it’s prudent to make a binary decision: Should I comply, or should I walk away? I think it’s a matter of degree:

  • How much control should you concede to the employer?
  • At what point do you draw a line?
  • When do you walk away?

If you keep your wits about you, it’s also a matter of negotiation. It may be worth playing by some of their rules:

  • How flexible are they?
  • What concessions can you get in return for complying with parts of their process?
  • What advantage can you gain?
  • Perhaps most important, what can you learn from this initial give and take?

Collect some data

This is where getting recruited becomes fun. What should you ask for before you enter the lion’s den? You’re not required to attend an interview just because an employer asks. So collect some data points that will help you judge the employer!

  • You’ve already taken one important step: Ask to have the hiring manager present. All they can do is say no.
  • If the first interview will be with HR, ask when will the manager be involved? That is, when will you meet the manager? Get a commitment.
  • What’s the hiring manager’s name? It will be to your advantage to look the manager up on LinkedIn prior to your meeting. (Or, Get the manager’s resume before you interview for the job.)
  • What are the three main objectives of the interview? That is, what’s the employer looking for? (They likely can’t tell you, because hiring is haphazard in most companies.)
  • What are the three key things they want a new hire to accomplish in the first six to twelve months on the job? (Again, they probably don’t know — but it’s worth asking and it’s to your advantage to know.)
  • Get anything that helps you judge the employer and prepare for the first interview.

You might even go this far: Ask this question before you agree to an interview.

Judge the employer

As we’ve said, you’re not going to get all these concessions or information. But this preliminary negotiation is chock full of value. It’s partly to improve your chances in a job interview, but it’s also partly to test the employer. Yes — to test the employer. Some interviews are bad for you. Is this one of them?

  • Do this employer know what it’s doing? (See What’s up with clueless interviewers?)
  • Will they make some concessions to demonstrate respect to you — because they really want to interview you?
  • Or, does it turn out you’re just a piece of meat – and they won’t compromise on anything at all?

Additional Resources

There are many ways to test employers, to push the boundaries, and to gather useful data before you invest time in lengthy interviews:

Fearless Job Hunting, Book 5, Get The Right Employer’s Full Attention:

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

Fearless Job Hunting, Book 8, Play Hardball With Employers:

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

Every concession an employer agrees to or declines early in the process tells you something — it’s a useful data point or signal you can use to your advantage.

Is this “opportunity” really good for you?

When I “go along” because I want a gig (with a new client, for example), I never forget that I’m looking for compromises. If I’m the only one compromising, if I’m the only one who’s agreeable, then I’ll probably be taken advantage of in the end. So, I keep testing, I keep probing, I keep asking, and I keep track of whether and how the other party will bend for my benefit.

Give and take is all part of a good relationship, and you need to know as early as possible what the other guy is willing to do for you. If the employer tells you the application and interview process is “their way or the highway,” then hop the nearest bus.

I think you have it right: Be ready to walk away, but be prudent. Even big companies will sometimes flex when they encounter a candidate they are really interested in. If you haven’t inspired that kind of desire in an employer, then why bother with the process at all? Do you really want to be another beggar at the door?

Make reasonable requests to gain some advantage. And don’t stop too early. For everything they refuse, have another request – and see if they try to meet you somewhere in the middle. That’s the sign of a company that may be worth it, even if their process is clunky.

The reader follows up

Thanks for your response and advice. It’s definitely tough to know when to push boundaries at the biggest companies, but I really liked how you put it: At minimum, test the process a little and collect data points. This is the first time I’ve gone through the hiring process completely solo.

A big thing that I’ve learned is that every step and decision tells you something important about your relationship with that potential employer. It can be hard to understand what’s going on and to capture all the lessons as you move through the process, but your site has been really great in demonstrating how much strategy is involved at almost every step. It has really helped me be mindful of things I would have never considered. Keep it up!

Nick’s Reply

knotLike my old mentor used to say, Use your judgment every step of the way, and do the best you can. And in the end, make choices — don’t let the other guy make them for you.

One of my favorite quotes is from Henri Frederic Amiel:

“To be always ready, a man [or woman] must be able to cut a knot; for everything cannot be untied.”

It’s easy for people to get so caught up with “trying to win” at the interview game that they lose sight of the larger objective: to get a good job, the right job, working with good people in a good company, where future prospects are good. They’re so busy trying to satisfy the employer’s demands that they lose sight of their own needs. Then they get tied up in knots before they realize they’re in a bad situation.

Yes, be ready to walk away, but after you try to get your way, too. I admire your fortitude!

Do you know when to push back on the employment process? Or are you afraid you’ll anger the Interview Gods? What requirements do you make of the employer before you invest your time in interviews? If you just take any interview offered (Hey, I’m not ragging on you) — what problems have you encountered?

: :

These industries are more likely to screw you on pay

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

Yes, You’re Getting Screwed

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

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

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

greedyA banker’s story

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

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

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

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

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

It’s worse than unfair pay

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

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

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

Is Feroli right?

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

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

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

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

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

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

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

This week’s takeaway

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

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

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

cea-table

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


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

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

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

.

FJH-8Book 8: Play Hardball With Employers

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

.


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

: :

The Intimidated Job Applicant: Pay me whatever you like!

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

Question

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

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

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

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

Nick’s Reply

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

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

The outplacement mistake

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

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

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

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

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

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

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

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

Wishful thinking is not business

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

How businesslike is that?

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

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

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

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

Negotiating is not a game of appeasement

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

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

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

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

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

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

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

: :

Don’t blame women for the gender pay gap!

In the April 12, 2016 Ask The Headhunter Newsletter, the truth about equal pay rears its head.

When women get paid less for doing the same jobs men do, the real reason is obvious to any forthright business person, though it seems to elude the media, the experts, and even some women themselves: Employers pay women less because they can get away with it.

gender-pay-gapThe same pundits tell women that they should change their behavior if they want to be paid fairly for doing the same work as men. But the experts, researchers, advocates and apologists are all wrong. There is no prescription for underpaid women to get paid more, because it isn’t women’s behavior that’s the problem.

There is only one thing a woman should have to do to get paid as much as a man: her job.

When doing the job doesn’t pay, women of all ages should be aware that younger women today have the solution. According to a recent report from the International Consortium for Executive Development Research (ICEDR), some women have figured it out. Millennial women don’t need to change their negotiating, child-rearing, educational or any other behavior to impress errant employers. They know to quit and move on. This is going to change life at work as we know it.

The myths about women causing their own pay problem

Let’s look at what women are supposedly doing to abuse themselves financially.

We can refer to umpteen surveys and studies about gender pay disparity — and to some that suggest there is no disparity. But a recent Time magazine analysis summarizes the data from the U.S. Census and other sources: “Women earn less than men at every age range: 15% less at ages 22 to 25 and a staggering 38% less at ages 51 to 64.

This has become favorite fodder for the media — and for armchair economists and gender researchers and pundits looking to bang out a blog column. But I think most of the explanations about pay disparity, and the prescriptions for how to get equal pay for equal work, are bunk.

Depending on what you read, women get paid less because they:

  • Have kids.
  • Interrupt their careers for their families. (See: A stupid interview question to ask a woman.)
  • Don’t have the right education (e.g., STEM), so they can’t get good jobs.
  • Are nurturing, so they don’t negotiate hard enough for equal pay.
  • Don’t like to argue.
  • Lack confidence.
  • Let their men get away without doing household chores — so those men (if they’re managers) don’t know they should pay women fairly.

These explanations about lower pay are speculation and myth, but the message is always the same: If women would just change some or all of those behaviors, they can shrink the pay gap.

I say bunk. Women don’t cause the pay gap. Employers do. So employers should change their behavior.

The fact

I’ve been a headhunter for a long time. I’ve seen more job offers and observed more salary negotiations than you’ll see in a lifetime. I’ve observed more employers decide what salaries or wages to pay than I can count. And I am convinced the media and the experts are full of baloney about the pay gap between men and women. They are so caught up in producing eye-popping news that they’re doing women a disservice — and confusing speculation with facts.

Here are the facts:

  • Employers pay women less to do the same work as they pay men.

Well, there’s just one fact, and that’s it.

Women don’t make themselves job offers, do their own payroll, or sign their own paychecks. The gender pay disparity is all — all — on employers, because we start with a simple assumption: A job is worth $X to do it right, no matter who does it. It’s all about getting the work done. And the employer decides whom to hire and how much to pay.

Here’s the hard part for economists and experts to understand: Employers decide to pay women less, simply because they can get away with it. The law of parsimony instantly leads us to the obvious motive: Paying less saves companies money. Everything else is speculative claptrap.

A review of the bunk

Let’s look at some of the gratuitous “analysis” about why women are paid less than men. Look closely: It all delivers one absurd message: Women are the problem, so women should change their behavior.

Glassdoor, the oft-reviled “employer review” website, reports that overt discrimination may be part of the cause of gender pay discrepancies (Demystifying the Gender Pay Gap: Evidence from Glassdoor Salary Data). But, claims Glassdoor’s economist, Dr. Andrew Chamberlain, “occupation and industry sorting of men and women into systematically different jobs is the main cause.”

“Sorting?” Armchair apologist Chamberlain is saying women apply for jobs that pay less and men apply for jobs that pay more. While this may sometimes be true, what he fails to note is that when a man and a woman do the same job in the same industry, one is paid less because the employer pays her less. The absurd prescription for women: This will change if only women will change their behavior!

Then there’s the HuffPo, in which Wharton researcher Bobbi Thomason says that to fix the gender pay gap, “We need to have men getting involved at home with childcare and other domestic responsibilities.”

Gimme a break. Women, when you get men to wash dishes, you’ll change how boss men pay female employees. The prescription: It’s all up to you. Change your behavior at home.

The Exponent, reporting on Purdue University’s Equal Pay Day event on April 12, says that the wage gap is “largely based on the fact that, generally, women don’t negotiate their salary once they get into their career field.” Those women. Dopes. They’re doing the wrong thing — that’s why they get paid less! Change your behavior!

Kris Tupas, treasurer of the American Association of University Women chapter at Purdue, explains that employers pay women less “because our culture teaches women to be polite and accept what they’re given.” Again the prescription is for women: Change your behavior!

Linda Babcock, a professor at Carnegie-Mellon, wrote a book that explains women’s fundamental problem: Women Don’t Ask. Says Babcock’s book blurb:

“It turns out that whether they want higher salaries or more help at home, women often find it hard to ask. Sometimes they don’t know that change is possible — they don’t know that they can ask. Sometimes they fear that asking may damage a relationship. And sometimes they don’t ask because they’ve learned that society can react badly to women asserting their own needs and desires.”

Women get paid less because they don’t know they can ask! Gimme another break! And what’s Babcock’s prescription? Women — you have to ask to be paid fairly! Change your behavior!

Fox News’s Star Hughes-Gorup tells women how they can fix the pay gap: “Get educated.” If you want to make as much as the guy in the next cubicle who’s doing the same job, hey, get more schooling after the fact to impress your employer.

Next, says Hughes-Gorup, “Embrace asking for help.” Yep — if you learn how to ask properly, you can “start the conversation” about money. In time, you’ll be worth more. She sums it up: “I believe true progress will be made when we acknowledge that the real issue deterring women from talking about money is not confidence, but self-imposed limitations in our thinking.”

The prescription: Women: If you stop limiting your thinking, you’ll get paid more. So, get with it! Change your behavior and your thinking!

Disclosure: I can’t believe anyone buys any of this crap, much less that anyone else publishes it uncritically.

Millennial women have the solution

Why do all those articles prescribe that women must change their behavior to get paid more, when it’s employers who are making the decision to pay them less? Should women appease employers, or respond to unfair pay some other way?

Surveys over the years show that the top reasons people quit their jobs include (1) dissatisfaction with the boss, and (2) work-life balance. (E.g., Inc. magazine’s 5 Reasons Employees Leave Their Jobs.) Money is not the main reason.

But something has changed — especially for Millennial women. Lauren Noël, co-author of a report from the International Consortium for Executive Development Research (ICEDR), says, “Our research shows that the top reasons why [Millennial] women leave are not due to family issues. The top reasons are due to pay and career advancement.”

The report itself quotes women under thirty saying that the number one reason they quit is, “I have found a job that pays more elsewhere.”

What’s interesting is that the HR executives Noël surveyed don’t get it — HR thinks “that the top reason why women leave is family reasons.” Is it any wonder employers attribute lower pay to the “choices” women supposedly make?

The Millennial answer to lower pay

Millennial women are the generation that has figured out they’re not the problem. Unlike their older peers, they’ve figured out that when they’re not getting paid what they want, the answer is to quit and go work for an employer who will pay them more.

As a headhunter, I know first-hand that quitting is the surest way to take control when you’re underpaid and your employer will not countenance paying you fairly. I also realize that not all women — or men, for that matter — can afford to quit a job that is paying them unfairly. But that doesn’t change the answer that will most enduringly change how employers behave.

Kudos to women who take the initiative, and who don’t blame themselves or alter their own behavior when an employer’s behavior is the problem. I wonder how many employers have taken notice? Do they realize the generation of female workers that’s coming up the ranks isn’t going to tolerate financial abuse — they’re just going to walk?

payDo we need a law?

I’m not a fan of creating laws to dictate what people should be paid. But I’m not averse to regulations about transparency and disclosure. With some simple disclosure regulations, I think more women can start getting paid as much as men do for the same jobs.

Companies want our resumes; let’s have theirs, too — a standard “salary resume” provided to all job applicants, comparing pay for women and men at a company. Employers would be free to pay men twice what they pay women, if they want. And upon checking the salary disclosure, job seekers would be free to walk away and join a competitor who pays fairly for work done by anyone.

Let’s get over it: Women who do the same work as men aren’t the problem. Employers who pay unfairly are, and let’s face what’s obvious: They do it because they can get away with it. (For a story about an employer with integrity, see Smart Hiring: How a savvy manager finds great hires.)

If we’re going to analyze behavior, let’s analyze employers’ underhanded behaviors — not women’s personalities, cognitive styles, or biological characteristics. I’ll say it again — There is only one thing a woman should have to do to get paid as much as a man: her job.

we-pay-menEmployers who don’t pay fairly will stop getting away with it when they’re required to tattoo their salary statistics on their foreheads — so job applicants can run to their competitors. Or, more likely — since new laws aren’t likely — employers will change their errant behavior when a new generation of women just up and quits. That would be quite a news story.

Maybe then the media and the experts will stop blaming women for the gender pay gap — and start challenging employers to raise their standards.

(Considering quitting? See Parting Company: How to leave your job.)

What’s the solution? Do we need a walk-out? Do we need regulations? Do we need a corporate stock and pillory? Does anybody think there’s no gender pay gap?

: :

The mark of a promotable employee

In the April 5, 2016 Ask The Headhunter Newsletter, a manager wants to know how to assess an employee for a promotion.

Question

promotionI manage a small team, but I’m pretty new to management. Now that it’s time to promote someone, I’m not happy with the criteria my HR department has given me to justify the promotion. It’s frankly nonsense. I don’t want to promote someone just because they’ve been on the job for two years. I want to use the opportunity to really assess whether they are ready for more responsibility and some new authority, and to help the employee realize what this means for them, for my department and for our company. Do you have any suggestions for how I should handle this so it will mean something?

Nick’s Reply

Well, you’re not managing by rote, I’ll give you that! I’m glad. A promotion should be the result of dialogue between you and the employee, and it should be handled something like a job interview. Of course, you know a lot more about an existing employee than you do someone applying for a job. But I agree that you should not waste the opportunity to help your employee step up to the challenge that a promotion really is. This should be a bit of a test where the employee demonstrates what they can do.

In part, you have to follow your gut, by considering how this person has performed over the past two years. In part, you should base the promotion on your estimate of how they will perform going forward, on the specific tasks and objectives they will soon face. This is actually all about what you already know. The rest is up to the employee: You should absolutely test them in some reasonable way.

Here’s how I’d approach it — but, please, leaven my suggestions with your own good judgment.

2 challenges to a promotion

It’s no easy task for a manager to decide who is worth promoting. It’s always risky to assign additional responsibilities or authority to an employee: Will she lighten the manager’s load or just add to it?

I think there’s a simple initial test for promotability, though you should consider other factors and criteria that make sense to you. My goal with this method is to stimulate a dialogue between you and the employee that will help you decide — and that will also help the employee grasp the importance of new responsibilities and authority.

This is based on the idea that the farther up the ladder a person goes, the more impact (positive or negative) they can have on the bottom line. Before you promote someone, find out how well she understands this idea. This test has two parts.

First, ask the employee to explain (a) how her current job contributes to the company’s profits, and (b) how she thinks the job she may be promoted to impacts profits.

Second, ask (c) what three things she has done in her current job to optimize profits and (d) what three things she would do in the “next job up the ladder” to optimize profits.

(If you’re a job applicant, this approach can work with a prospective boss, too. End your talk with How to Say It: How’d I do?)

The key to these 2 challenges

Remember that as someone’s boss, your goal is to get the best work out of them that you can. That makes you a mentor and a guide. If the employee fails, you fail. So, you must do everything you can (within reason) to help the employee succeed at getting promoted, just as you normally do as her boss to help her get her work done effectively every day.

That means the two challenges listed above must be an open-book test, and you must give the employee adequate time to respond. You must be ready and able to answer any questions she has as she prepares her responses. For example, she will probably need to discuss the definition of profit in the context of her job and your department. (Remember, a big part of your job as a manager is to develop your people, to advise them, and to teach them.)

Encourage the employee to prepare a brief, written report for (a), (b), and (c), and a brief, written plan for (d). Written might mean she prepares a presentation and outline on your whiteboard, or it might mean a short PowerPoint presentation or a narrative. Please: Don’t make it too formal! Casual and conversational is best.

Point out that you are available to help in any way (short of producing the reports, of course). You’re her manager, after all, and managers and employees collaborate all the time in a healthy work environment. You want her to succeed. This will trigger a thoughtful dialogue that will reveal what you need to know about the employee’s acumen and potential. No matter how the employee responds to this, you as the manager will learn a lot. I think you’ll see the mark of a promotable employee pretty readily.

As you might guess, not all employees will be able to deal with this effectively. Promotable employees will get it!

(If you’re the employee, and the promotion you’re getting doesn’t include a raise, learn How to Say It: Mo’ money is the problem!)

If you’re a manager, how do you handle promotions? When you’ve pursued promotions yourself, how did you make your case? What approach other than the one above would you recommend to the manager in this week’s Q&A?

: :

The Bad-Business Job Offer: Negotiating not allowed!

In the March 22, 2016 Ask The Headhunter Newsletter, a reader wastes time with an employer who doesn’t negotiate.

Question

I received a job offer for $80,000, which is low for what my position gets in my industry. I responded that I’m excited about joining the team, and I counter-offered for $85,000, outlining what my value is, how I plan to benefit the company, and overall how the raise is justified. That’s my understanding of the proper way to negotiate — you must justify your counter-offer.

i win-you loseInstead of just turning down my counter-offer and staying at $80,000, which I would’ve gladly taken, they rescinded the offer completely. The hiring manager wouldn’t even respond to my calls or e-mails, even after he said he’d be glad to discuss any questions.

I spoke to friends who are hiring managers, who in turn asked other hiring managers, and the consensus was that it was a total shock and an anomaly to rescind the offer because I tried to negotiate it.

Is this becoming more common, or is this just plain bad hiring practice? Was I in the wrong to negotiate? The hiring manager did claim that he already pushed for the $80,000, which is the maximum they could offer. But anyone with negotiating experience knows that might be a negotiating technique of the employer.

In all, this experience scared me into never wanting to negotiate again, and I’m afraid I’ll never get a job that pays at least the average value for my position. I would love to know your thoughts!

Nick’s Reply

When employers talk money, job applicants are supposed to gratefully nod YES. When job applicants say MAYBE and try to negotiate, more and more we’re seeing employers say NO and withdraw offers altogether.

That’s when you should say GOODBYE, because negotiating is part of any business, and hiring people is business. Any employer that doesn’t respect the negotiating process — even if it declines to increase a job offer — is doing bad business.

Here we go again: Another rescinded (or retracted) job offer. (See Protect yourself from exploding job offers and Protect Your Job: Don’t give notice when accepting a new job.) What is up with human resources management?

Your story is an interesting twist, because your offer was retracted simply because you dared to negotiate it. But more troubling is that I’m seeing a shocking number of rescinded offers reported by readers.

Don’t beat yourself up about what just happened to you. As long as you do it respectfully, there is nothing wrong with negotiating. It’s part of business. I compliment you for negotiating responsibly. (See Only naïve wusses are afraid to bring up money.) Here are my thoughts:

  • The manager is within his rights to not offer more money. But taking offense at a negotiation is puerile. As a job applicant, I’d walk away from this employer without another thought. As a headhunter, I’d never work with this employer again. (Employers should read Why you should offer job applicants more money.)
  • The company’s HR department reveals it is meaningless, clueless, powerless, or all three. (See Why HR should get out of the hiring business.) Yes, I said HR. Even though you were dealing with a hiring manager, it’s the HR department’s job to ensure the hiring process is conducted in a businesslike way by all managers.
  • The company’s Marketing and Public Relations departments are to be pitied because, while they are working to create a good image of their company before their customers and investors, hiring managers are tearing that image down in the company’s professional community. (I’m sure you’ll be sharing your story with your friends in your industry.)
  • You have dodged a bullet. Better to know now that this person doesn’t negotiate, than after you take the job.

What this company did doesn’t make sense. But please consider that the risk of working with people whose behavior doesn’t make sense, doesn’t make sense!

Move on. There are good employers out there who know how to conduct business. Business between honest, smart people is always a negotiation. You did nothing imprudent or wrong. When someone won’t negotiate, they’re not worth doing business with.

We learn through negotiating. As you pointed out, negotiating by offering sound reasons for your counter-offer is a way to find common ground and a way to understand one another better. This kind of back-and-forth is the foundation of all commerce. It’s how we learn to work together. (See The ONLY way to ask for a higher job offer.)

This employer doesn’t get it. It never feels good when someone dumps us. It makes us question ourselves. But if you take a deep breath, I think you’ll realize that a company that refuses to have a dialogue — a negotiation — with you, doesn’t care about you. There can be no commerce in that case.

I think such appalling, irresponsible behavior by employers has become much more common, because HR now so dominates recruiting and hiring that hiring managers are less and less likely to understand even the most fundamental rules of engagement with job applicants. They do stupid things that cost their company money and good hires. Even worse, HR is so dominated by automated hiring tools, regulatory blinders, and “best practices” that even HR “professionals” are less and less likely to understand the basic rules of doing business.

Responsible business people don’t just walk away from a negotiation like this employer did. They respectfully close out the discussion. And if an employer makes an offer that the recipient tries to negotiate, the employer doesn’t withdraw the offer as its answer to a request for more money. The employer just says, No, no more money. Do you accept the original offer?

Don’t beat yourself up. You can always negotiate with good people. The rest aren’t worth worrying about or dealing with. I wish you the best.

Do you negotiate to get the best job offer you can? Did the employer pull the offer as a result? If you’re an employer, are you willing to negotiate with job applicants? How would you deal with an employer that doesn’t negotiate?

: :