You got the job promotion! Where’s the raise?

On January 18, 2021
You got the job promotion! Where’s the raise?

Question

promotionMy friend got a job promotion but they haven’t told her what the new base salary is going to be. She was hoping for at least a $5,000 raise. She knows for a fact that the budget is for double that. I told her she should have asked her manager about the raise immediately when he gave her the promotion. They already low-balled her when they originally hired her. I think she needs to suggest a $10,000 increase and see what they come back with. What should she do?

Nick’s Reply

I agree with you that she made a mistake not asking about money immediately. In her hesitation, she unwittingly signaled her boss that money isn’t an issue, and perhaps that she’s not confident in her negotiating ability. The boss may have judged he can take advantage of her. Your friend needs to go knock on her boss’s door.

Is a job promotion reward enough?

Some employers play an underhanded game with salary and compensation. They believe the longer they avoid bringing up money and the longer you don’t raise the issue, the less they need to pay you. This happens with job-offer negotiations and with promotions and raises.

In the case of a promotion, by not mentioning money your employer may signal that the promotion itself is your reward, and that you should be thrilled at the news and accept with no questions asked.

The discomfort your friend felt — and the reason she didn’t ask about the new pay — stems from an insidious contrivance employers (especially HR) rely on when discussing a job: It’s not nice for job candidates to bring up money.

Should you bring up money?

Our employment system drills that cockamamie “rule” into our psyches. This ridiculous idea dominates most job-interview advice. “Don’t bring up money! They’ll think you care more about pay than about the opportunity, the job, and the company!”

And then there’s the capper: “It’s unprofessional!”

Believing this balderdash is probably why your friend is not being paid what she’s worth — and why she’s so hesitant to speak up.

Be forthright about money

Of course money is a key issue! It’s why employers discourage discussing it! Your friend should do as you suggested. Go ask her boss immediately how much the raise is. Since she seems to feel awkward, I suggest this casual yet forthright approach.

How to Say It
“Thanks for offering me this job promotion! So, what’s the money (or pay) like for this new role?”

Say it with enthusiasm and a smile. It’s direct, non-confrontational, friendly and almost innocent. Most important, it signals your clear expectation that the pay must be higher. This is actually the disarming start of a negotiation.

Why do employers always make the salary clear in a job offer, but not always with a promotion? With a promotion they clearly have leverage because you’re already employed at the company. They believe your only option if you reject low pay for a promotion is to quit and start a job search. They believe you have no leverage. This is why you must always have other job opportunities simmering on a back burner. No job is guaranteed. It’s imprudent to have to start a job search from scratch if your current job ceases to be viable.
What if the boss states a low number or says there is no raise at all?

Turn a job promotion into a raise

Your friend should politely and respectfully make it clear the matter is not settled and she expects a negotiation before she accepts the promotion.

How to Say It
“My expectation, based on what the job requires, is that the pay is higher than that. Can we discuss it?”

If the boss asks how much your friend is talking about, she should not state a number just yet because, if the boss is not agreeable, that will likely end the conversation. The objective here is to have a dialogue.

This is where your friend must shift the boss’s expectations, take the discussion up two notches, and take control of the negotiation. Here’s what to say to turn a promotion into a raise.

How to Say It
“I don’t expect you to pay me more than I’m worth. I’d like to work up a brief business plan estimating how much added value I can bring to the job, beyond what the company expects. If I can’t convince you, then you shouldn’t pay me more. Can we meet in three days to go over it before you set a salary on the job?”

The biggest mistake people make in salary negotiations — mainly because it’s an emotional subject and they’re usually not prepared — is to blurt out a salary they believe they’re “worth.” But they fail to justify the number. They don’t make the case, except to say, “It’s what I think.” That’s not sufficient.

Make the business case

What if you negotiate a higher salary but your boss doesn’t deliver the promised raise? Consider the nuclear option.
An old boss of mine handled requests for raises quite effectively. If you asked for more money, he’d smile expectantly. “What more are you going to do?” It’s a fair question. I’d never talk money unless I had a good, defensible answer. Think of it as a simple business plan.

This approach should help your friend start a thoughtful conversation with her boss; a discussion, a friendly back and forth about the job, her skills, and specific ways she can bring more value to the job. Talking shop is always better than just haggling for money. It reveals true respect for the job and the employer.

To be truly effective at negotiating a promotion and a raise, your friend must be willing to make her case. This means preparing a brief business plan that justifies what she’s asking for. And, as in a job-offer negotiation, if what she really wants is truly important to her, she must be ready to walk away from the promotion if the pay isn’t to her satisfaction.

Have you ever been offered a job promotion (and more work) without an appropriate raise? How did you handle it? Did you ever decline a job promotion because it included no raise? Is such a deal ever justified?

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3 reasons to say NO to a job offer

On December 2, 2019
3 reasons to say NO to a job offer

In the December 3, 2019 Ask The Headhunter Newsletter a reader gets a job offer that may deserve a NO.

Question

job offerAfter months of looking for a job, I finally got an offer using your methods. (Thanks! The interviewer said I was the best candidate she’s talked to in a long time.) But there’s a small matter that concerns me, and it’s not the money. The salary is good. But neither the interviewer nor the HR person would tell me who my boss will be. HR just said I’d be assigned to the manager who needed my skills the most. Then she said they need my answer by end of day tomorrow. Is this a trap? Should I take the job?

Nick’s Reply

It may not be a trap, but it’s a risk in many ways — and not knowing who your boss will be is certainly not a small matter. Your story raises a bigger question. When should you say NO to a job offer?

There are many signals that might turn you away. I won’t tell anyone who needs to pay the rent or put food on the table to turn down a job offer. Take it if you really must, but consider the risks.

Here are three reasons to say NO to a job offer.

1. You don’t meet the manager you’ll be reporting to

You have no idea what you’re getting into if you don’t meet the manager. If the HR department (or a committee) does the hiring, you won’t be able to assess whether you and your new boss are compatible.

In Fearless Job Hunting, Book 5: Get The Right Employer’s Attention, I show how to conduct due diligence before and during the interview, and before accepting a job offer. These are just a few tips to help keep you out of trouble.

In the interview, don’t miss these points:

  • What must the company do to meet its goals? Is your job important in meeting these objectives? How?
  • Check out the tools that will be at your disposal. If they’re not part of the deal today, don’t expect you’ll get what you need later.
  • Who, in other departments, will affect your ability to do your job successfully? Meet them. Look for facilitators and debilitators—people that will help and hinder your performance.

From “Is this a Mickey Mouse operation?”, pp. 13-15

This cuts both ways. If the boss doesn’t meet you, it may turn out you’re not as qualified for the position as HR suggested. Your new job might be short-lived.

If the company won’t arrange a one-on-one meeting with the boss, it could mean the boss will shortly be gone. Where does that leave you? Ask to meet your future boss. Reconsider the position if the employer declines the meeting.

2. The job offer is low but you’re promised a raise “soon”

This is how companies seduce reluctant job applicants: with a promise of a raise “soon.” Will the company put the date of the future raise in writing along with the amount? Will it guarantee in writing a performance review in so many months? You have every reason to doubt the good intentions of the employer if it will do neither.

Compensation is what the written job offer says it is. Do not count promises as part of the job offer. Get it in writing.

(There’s another promise to watch out for: stock options. See What are stock options worth in a job offer?)

3. The details of the job are not made clear

It’s an old story: A person takes the job based on the description in the job posting, only to find that’s not the job. The actual work is something else. If all you get are vague answers when you ask about details, you may be accepting a broken job. The company may want you only for a short-term project or — even worse — “to fill head count.”

Ask the employer to list the main tasks you will be doing, and ask for a written definition of what exactly is expected of you after three, six and 12 months on the job. Or consider walking away.

Is the job offer really right for you?

These are just three of many reasons to say NO to a job offer. (See 13 lies employers tell about job offers.)

It’s important to pause when you receive an offer. Don’t get lost in the thrill of success. Take time to consider all the terms of the offer, the company that made it, the manager you’d be working for, the work you’d be doing, and — of course — the compensation. Like the proverbial car shopper, you must be ready to walk away from a deal that’s not really right for you.

Have you ever turned down a job offer? Why? What other reasons can you think of for saying NO? Have you ever accepted a job only to realize that the signs were clear that you should have said NO?

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Should I extort a salary raise out of my boss?

On August 5, 2019
Should I extort a salary raise out of my boss?

In the August 6, 2019 Ask The Headhunter Newsletter a reader wants to use a job offer to get a raise.

Question

A competitor offered me a job with a higher salary. What is the best way to use this to ask my boss for a raise, and what could be the best speech to convince him?

Nick’s Reply

salaryUsing a new job offer to leverage a counter-offer — a raise in salary — from your current employer is almost always a costly mistake. In fact, it’s a kind of extortion, so let’s call it that, and let’s consider some of the risks you could face.

You’re marked

Even if this gambit works, you will likely be marked as disloyal and untrustworthy. The next time cuts have to be made, you’ll be on the list because you already threatened to quit over money. Management will be concerned you’ll be likely to pull this again the next time you get a better offer. (No matter how much your boss likes you, business exigencies usually trump friendships.)

Instant termination?

If you’re using this new offer to leverage more money from your current boss, be ready to start that new job ASAP, because you may be walked to the exit immediately. Some bosses don’t take kindly to threats, no matter how diplomatically you make them.

Paying for your own raise

If you succeed in getting a raise by holding your boss over a barrel, where do you think that extra money will come from? It will likely be an advance against a future raise or promotion. You usually can’t win at this game because the bean counters are counting dollars. Most likely, you will wind up paying that raise to yourself in some way.

They want you, so be happy

But there’s good news here, too. You’ve found a new job where they want you! If you’re motivated to take a new job in a new place because you’re unhappy now, getting a few more bucks to stay (assuming you can get it) isn’t going to change the fundamental problem of job dissatisfaction. If that new job is really great for you, just take it.

Go where they’re making you happy!

If what you really want is a raise, ask your boss for it before you go interview somewhere else. Please see Should I ask for a raise one more time?

The “best speech” to give your boss is one sentence, and it should be in writing. You’ll find it here: Quit, Fired, Downsized: Leave on your own terms.

Do you want a raise, or a better job?

The bottom line is this. You need to make a choice, so compare your two options: Do you want a raise from your boss, or do you want a new job with a raise?

  • Your current employer apparently doesn’t recognize your value, or it would have offered you a raise and/or a promotion.
  • The new employer is putting its money where its mouth is — without any prodding. That’s worth a lot by itself. If it’s a good job, that’s who I’d want to work for.

I’ve seen people leverage higher salary out of their current employers when they get a bigger offer elsewhere — and it works out in the long run. But it’s very rare. Such a negotiation and accommodation requires great integrity on the part of the employer and the employee.

Work where it’s better

My advice: If the work, the job, the new employer and the money are all better, just resign and move on. Don’t look back at an employer who wasn’t willing to do right by you without a threat. Don’t forgo your future.

Have you ever tried to use a new job offer to get a raise from your current employer? What happened? Is there a way to extort a raise and mitigate the risks I’ve listed? Am I over the top when I refer to this gambit for getting a raise as extortion?

Don’t miss this new feature!
News I want you to use highlights articles that can give you an edge in unexpected ways!

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Should I move for a 30% salary increase?

On March 18, 2019
Should I move for a 30% salary increase?

In the March 19, 2019 Ask The Headhunter Newsletter a reader asks whether a big salary increase is enough reason to accept a job offer.

Question

A rival company has offered me a job with a 30% salary increase. I know there are other things to consider, but it’s such a big pay bump that I think it may be sufficient reason to move. Should I accept it?

Nick’s Reply

salary increaseOnly if money is your prime motivator. If it is, go for it. Of course, without any other information, I can’t really give you very thoughtful advice. But in general, this is a scenario that people sometimes face, so let’s deal with it generally.

No matter how big it is, I look at three things when a job candidate receives an offer, in addition to the money. If I were you, I’d compare the new company to your current employer on these factors, in this order of importance:

  1. The people
  2. The products
  3. The company’s reputation
  4. The company’s prospects
  5. The company’s finances

Whose are better? Try to put a value on each of those factors, then include them in your analysis.

It’s the people, Stupid

I’d give the most weight to the people you’ll be working with. Are they smart? Highly skilled? Dedicated to their work and the company? Do they demonstrate high integrity? Are they a tight-knit group that works well together? Do they mentor and help one another?

This matters especially with regard to the company’s management, of course.

Even if the company doesn’t score tops on the other four factors, a great team can compensate and drive the company to success. On the other hand, if the people aren’t great, it doesn’t matter how good the products, reputation, future prospects are finances are. That old saw is true: It’s the people, Stupid. You’re (hopefully) going to be living with them a long time.

What the world sees

The next three factors are intertwined. A company’s products, and new products it’s got coming down the pipeline, affect its reputation and future prospects.

Pay close attention not only to how the company’s customers regard the company, but also to how it is viewed by the business community, the business media, its competitors and its market.

You may have found a good job and great money, but the financial gain from that big salary bump may be very short-lived if those other factors aren’t strong.

Is the business sound financially?

Few job hunters consider the financial aspects of a job beyond the pay. That’s foolish. I’ve never accepted a job without first meeting with the Chief Financial Officer. I want to know about receivables and payables, sources of funding for operations and growth, and — if it is publicly traded — how the company’s stock has performed. Believe it or not, I worry more about whether a company is responsive to its employees than I am about how it responds to its investors — but how investors judge a company matters greatly. I also want to know how the company treats its vendors — does it pay them on time?

If a company isn’t sound financially, you’re probably not going to have that job very long, no matter what it pays.

Is it all real?

I’ve seen people move for money or other factors, only to regret it after they realized the image they had of the new company didn’t match the reality. It’s common for an employer to present a great image to job applicants. But it’s up to you to look under the hood of this machine!

Due diligence

Here’s my advice. Once you have a bona fide job offer, tell the company you’d like to come in for a day to shadow your new boss and the team you’d be working on. This is proper due diligence. (See How can I find the truth about a company?)

Ask to meet people upstream and downstream from your job. That is, other employees whose work product will affect your ability to do your work successfully, and employees whose work on what you produce will impact your success. For example, if you work in engineering, you need to know who is conceiving the products you will have to design and whether the sales team is competent to actually get customers to buy them.

Follow the money

Ask to meet the head of the finance department. That’s right — you may know nothing about finance, but you should have this meeting anyway. Check my comments above for some ideas about what to ask in that meeting. Even if the company is privately held, the finance officer should acknowledge your interest in your new employer’s financial state and philosophy. (The first time I did this, the V.P. of Finance was pleasantly surprised to see that a new employee cared about the finances — he loved it. Throughout my time at the company, I had a friend in a high place!)

Interview the company

When the company is done interviewing you and makes a commitment by extending a written offer, that’s the time to seriously interview the company.

A section of this article suggests how to check several key factors about an offer: 13 lies employers tell about job offers.

There’s a section about Due Diligence in one of my Fearless Job Hunting books that you may find helpful, too: Ask The Headhunter Store.

It’ll cost you about a day to do these meetings, but it may save you a lot of heartache. If the company declines to let you come back in, I’d refuse the job offer, no matter how great the money is.

A company that welcomes your interest in learning more before you make a commitment reveals something you can’t learn in a normal job interview — that it really respects its employees. The added bonus is that all the people you talk to during this extra day of meetings — if you take the job — will take you all the more seriously as a co-worker.

I wish you the best.

What factors do you consider when evaluating a job offer? Is a big raise ever enough reason to change employers? (This is not a loaded question: It actually might be.) What other factors would you add to my list above?

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Weird Tales of Job Offers: The new hire who disappeared

On July 16, 2018

In the July 17, 2018 Ask The Headhunter Newsletter an employer tells about a disappearing employee and we share stories about job offers.

Question

I’ll bet you have some interesting job-offer stories. Here’s one I’d like to share.

job offersWe had a candidate go through the interview process and the offer cycle at our company. He took a position for a week, then returned to his other job. He never gave notice to his other employer, just took vacation time. After working the week, he didn’t return. It took a couple of days to track him down at his old work number. Is this common?

Nick’s Reply

I don’t think it’s very common simply because it’s the stuff bad reputations and terrible references are made of. Disappearing from a new job reveals a profound lack of self-confidence on the part of the candidate (not to mention integrity). This is a person who needs a safety net, and who will not invest himself in a new job enough to succeed. (Relationship counselors refer to this as “commitment phobia.”) He probably needs a back-door out of all the important choices he makes. In the end, the result is almost inevitable. People like this never find job offers that make them happy because they don’t commit. They keep going back to the devils they know rather than figure out how to move on with their lives. (See Should I just quit, or find a new job first?)

Don’t give this guy another thought. Move on to better candidates.

I do indeed have a lot of interesting stories about job offers. There is a mini-lesson in each of them. Let’s look at a couple of the characters I’ve encountered.

The guy who accepted lots of job offers all at the same time

He was a design engineer, and since engineers tend to keep odd hours and schedules, he was able to pull it off without much difficulty. I do give him credit for working very hard. He apparently was able to deliver the work required at each job. (Maybe this should tell us something about employment!) This man of multiple salaries accepted new job offers every few months without discarding all his old jobs.

He was able to jack up his salary enormously within a couple of years. While some job hunters don’t like to show their old pay stubs, he took great joy in it, and used proof of his current salary (one of them, any way) to gain small increases wherever he could. Lots of small increases add up!

He was quite proud of himself. I’ll never forget his smirk when I found him out. He suggested that I could earn multiple placement fees in short order by cooperating with him. I shared the story with many clients — along with his name.

The guy who used a job offer to extort a raise

He had two weeks to consider a job offer, and on day 14 asked for another week because he “wasn’t ready.” I got him an extension, but I could smell it coming.

A week later, he still wasn’t ready. I told him he had 24 hours to make a decision. My client wouldn’t wait any longer. Within the hour, he called back, frantic. “I accept the job! But I must start today!”

Turns out he had two problems. His intention all along was to use the new offer to leverage a raise, but he lacked the confidence. He was terrified to go dangle the new offer in front of his boss — thus the three wasted weeks. When I issued my ultimatum, he sheepishly approached his boss. During the “negotiation,” his boss had a security guard usher him out the door. (See Naïve young grad blows it for a discussion about using a new job offer to leverage a raise.)

His other problem: His wife threatened to leave him if he was out of work just one day. Thus his hurry. I followed his career for several years. I think few men have learned a lesson so well as he did.

I’ll let you draw your own lessons from these stories, whether you’re an employer, a job hunter, or a headhunter. But remember G.K. Chesterton’s words: “There is no man really clever who has not found that he is stupid.”

Got a good job-offer story? The weirder the better!

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The Job Monopoly: How companies keep pay low

On January 22, 2018

In the January 23, 2018 Ask The Headhunter Newsletter, we take a look at the job monopoly that keeps a lid on pay.

Question

job monopolyYou’ve probably already read this on Slate. Three economists conducted a study that asks, Why Is It So Hard for Americans to Get a Decent Raise? (The paper is only in draft form so Slate includes no link to it.) I think your readers might have some interesting things to say about whether there’s a job monopoly that controls their pay.

Here are the key points:

  • “Workers’ pay may be lagging because the U.S. is suffering from a shortage of employers.”
  • “A lack of competition among employers gives businesses outsize power over workers, including the ability to tamp down on pay.”

In other words, in areas where there are only one or two companies posting a certain kind of job (e.g., delivery van drivers in Selma, Alabama), pay for those jobs has stagnated or declined. They call this monopsony. Like a monopolist that controls prices because it controls supply of a product or service, a monopsonist company controls pay unfairly because it controls the supply of certain jobs.

But I think it’s far worse. (You’ve already touched on this before in your article Consulting: Welcome to the cluster-f*ck economy.) I wonder if those economists are taking into account all those “consulting firms” — middlemen who provide, say, most of the computer programmers to several employers in an area — that create further aggregation of hiring entities who would otherwise be competitive.

What do you say about this? What does everyone on Ask The Headhunter think about it?

Nick’s Reply

Wow, that’s one cool new word for our vocabulary: Monopsonist. It opens up a whole new world of worry!

Consulting firms and the job monopoly

I don’t think there’s any question that a handful of “consulting firms” that funnel workers to lots of companies in a particular industry, field or discipline constitute a job monopoly that kills competitive pay. I suspect your insightful guess is correct: The consulting industry is aggregating jobs and labor, thereby controlling — and depressing — pay. It wouldn’t surprise me if those economists totally miss the consulting-firm factor. (See Will a consulting firm pay me what I’m worth?)

The economists should ask workers who get their jobs via these aggregators, what is the difference between what a consulting firms pays them, and what the firm charges an employer for them. That’s never disclosed, and that’s the dirty little secret of the corporate world — and our economy. (We’ve looked at another topic that economists seem to view with blinders on: What the Federal Reserve doesn’t know about recruiters.)

But there are other issues and questions, too.

While I could ruminate for pages about what this means to workers and job seekers, and to our economy, I’m going to respect your request and roll this out to our community, in the form of a bunch of questions the article raises for me. Let’s see how everyone views this — and what questions and answers they’ve got.

I strongly suggest that everyone reading this column stop right here, and please read the Slate article before proceeding. It’s a worthy read — and I think it’ll get up your ire after it raises your eyebrows!

Are the data legit?

The Slate article by Jordan Weissmann raises a lot of questions, and not least of them is one about methodology.

  • The economists’ data set comes from CareerBuilder, “which publishes about one-third of all online job ads in the country.” Talk about an aggregator! What assumptions are those economists making about the validity and reliability of a major job board’s data, which comprises job listings that we all know are corrupt in more ways than we can count? (E.g., duplicate jobs, out of date jobs, fake jobs, composite jobs, inaccurate job descriptions, and so on.)

Questions about monopolistic pay practices

Nonetheless, the study raises provocative questions whether or not the data are legit.

  • In what other ways do employers monopolize a job market?
  • How do employers that are rolling in new-found profits explain this quote from the article?

“Since 1979, inflation-adjusted hourly pay is up just 3.41 percent for the middle 20 percent of Americans while labor’s overall share of national income has declined sharply since the early 2000s.”

  • What other employment practices “[cut] into labor’s share of the economy?”

Questions about anti-trust

  • Should the Department of Justice and the Federal Trade Commission investigate monopsony like it routinely investigates monopoly?

“Then there’s antitrust… This paper’s findings suggest that Washington needs to think more carefully about how mergers can impact the job market.”

Questions about minimum wage policy

  • Does the following assertion turn our entire political debate about wages on its ear?

“Take the minimum wage. The classic argument against increasing the pay floor is that it will kill jobs by making hiring more costly than it’s worth. But in a monopsony-afflicted world where companies can artificially depress wages, a higher minimum shouldn’t hurt employment, because it will just force employers to pay workers more in line with the value they produce.”

Is hiring no longer competitive?

Weissmann closes on this point:

“We’re living in an era of industry consolidation. That’s not going away in the foreseeable future. And workers can’t ask for fair pay if there aren’t enough businesses out there competing to hire.”

I’ll bring it back around to the insight (offered by the reader who kindly brought all this to our attention) about “consulting firms.” (I put that in quotation marks because most of these firms don’t consult at all — they merely rent workers for profit.)

  • To what extent does consolidation of hiring by a relatively small number of body shops (I think body shops is the more accurate moniker) result in manipulation of pay?

And who’s going to do anything about it?

Okay, folks: Have at it! Is there a growing monopoly on jobs that affects pay? How does it work? What do you think about all this? What questions do you have that we can all try to tackle?

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What the Federal Reserve doesn’t know about recruiters

On March 13, 2017

In the March 14, 2017 Ask The Headhunter Newsletter, we look at what some economists at the Federal Reserve say about jobs.

federal reserveRecent reports from the Federal Reserve suggest that switching jobs — and probably employers — is the best way to boost your salary and your career.

In this special edition, we’ll explore what the Federal Reserve doesn’t know about recruiters, and why you should stay away from recruiters who waste your time with been-there-done-that jobs and lower salaries.

Are recruiters killing careers and the economy?

The best recruiters and headhunters boost employers’ productivity by finding discounted talent and up-and-coming talent to fill jobs those people may not have done before. By stimulating capable job candidates with new, motivating career challenges, insightful recruiters help create value for an employer — and boost our economy.

But untrained, inept recruiters lack insight and foresight. They don’t bother to understand an employer’s future needs or a job candidate’s untapped potential. They look for quick and easy “perfect matches” turned up by automated recruiting algorithms. These keyboard jockeys do little but process resumes whose key words match key words in job descriptions. They add no value. They kill career growth and job productivity.

Inept recruiters far outnumber good ones, and that’s killing our economy. Companies aren’t filling jobs with the best hires. But the fault lies with employers themselves, and with Human Resources executives, who buy — hook, line and sinker, and at enormous cost — the reductionist job applicant sorting systems that drive hiring today. (See Why HR should get out of the hiring business.)

New research and analysis from Federal Reserve economists reveals a problem of mismatches between workers, salaries and productivity, but fails to identify and discuss the structural cause of the problem — counter-productive recruiting.

The mad rush to fill jobs mindlessly

With the Department of Labor reporting lower unemployment and increasingly scarce talent, employers are rushing to fill jobs by relying on methods that yield staggeringly low signal-to-noise ratios.

By design, these systems actively solicit as many applicants as possible for each job. (Consider the applicant funnel ZipRecruiter, which exhorts HR managers to post a job on “one hundred-plus job sites.”) The ease with which these systems enable and encourage job seekers to apply for any job in a mindless feeding frenzy contributes to understandably low yields. Then HR managers, who fail to realize that more is not better, claim to be shocked and cry “talent shortage.”

When matches are made, they’re often undesirable to the candidate. It’s a common complaint among Ask The Headhunter readers: Employers want to hire you for a job only if you’ve done that job for three, four or five years already — and they’ll often pay you less. Even when they offer you a raise, the job is usually a lateral move. It’s not a career opportunity or a chance for you to hone new skills  — it’s just an easy database match.

This seems to be much more than a job-seeker frustration. According to economists reporting from several branches of the Federal Reserve, it may be one of the causes of inflation and lower productivity. (See Bloomberg Businessweek: Job Switchers Solve An Inflation Mystery.)

But the economists don’t attempt to explain why employers are making such short-sighted, self-defeating hiring decisions — and I think it’s because the problem is so pervasive that it’s invisible. Although job seekers have long been very vocal and angry about it, the backdrop of reductionist, rude, automated recruiting across America seems to be such a necessary evil that no one but the job seeker sees or questions it. (See HR Technology: Terrorizing the candidates.)

The compelling need to fill jobs obscures the importance of planning to hire strategically and wisely — not just to fill round holes with round pegs quickly. American companies seem unaware of their mad rush to fill jobs mindlessly, and economists seem content to accept the prevalent recruiting infrastructure without reviewing it, simply because employers are content to keep paying for it.

This seems to be what the Fed’s economists don’t know about recruiters and the job market.

The failure is on the front line

Job seekers report wasting enormous amounts of time today fielding fruitless recruiting inquiries and participating in interviews for the wrong jobs. The question arises:

Why do employers look for perfect matches between workers and jobs?

The assumptions behind this quixotic search are incorporated into the ads that candidate vendors like Indeed, LinkedIn and ZipRecruiter run constantly:

  • Employers must hire without training anyone or allowing time for a learning curve.
  • Perfect hires are best.
  • Talent can be had at a discount.
  • Employers don’t have time to find talent on their own.
  • Every job can be posted to “a hundred-plus” job boards instantly.
  • “Big data” makes perfect hiring possible.
  • More job applicants is better.
  • And so on.

These assumptions push employers head-long into automated recruiting. But when we start questioning those assumptions, we’re left with the boots on the ground that create the biggest constraint on hiring the best talent: Inept recruiters on the front line.

When complex factors make it difficult to suss out what triggers the choices business people make, I get lazy. Though I’m not a scientist, I was trained as one, and I find that even if a problem seems complicated, it’s best to start with the law of parsimony: The simplest explanation is probably the right one.

If employers had better recruiters, they’d hire better people, increase productivity and stimulate the economy.

Yet, an employer’s first contact with an engineer, a scientist, a software developer, a machinist, an accountant — anyone the employer needs to hire — is through a person who is probably the least likely to understand qualities and characteristics that make the candidate the best one for the employer. It’s a person least likely to understand the work and the job. Except in rare, wonderful cases where employers have very good recruiters, it’s an incompetent recruiter.

Because employers believe they now have “intelligent applicant systems” at their disposal, many (I think most) dispense with highly trained and skilled recruiters. Employers on the whole have unsophisticated, untrained recruiters who quickly eliminate the best candidates because they’re rewarded for making the easy choices, not the best ones.

The Federal Reserve connects the dots between talent, pay and productivity

Bet you’ve been waiting to see how the Fed fits into this. Let’s dive in.

The job boards say employers can hire the best talent for less money because their databases are bottomless and the perfect candidate is in there, if you just keep looking.

But the Federal Reserve says higher productivity coupled with better career opportunities and higher salaries is better for everyone — and for the economy.

Consider the ambitious little Bloomberg Businessweek article referenced earlier, Job Switchers Solve An Inflation Mystery, that deftly puts the jobs puzzle together:

“Labor economists… are increasingly studying how job-hopping Americans drive compensation gains and affect the traditional interplay of low unemployment, wage gains, and inflation.”

It turns out those economists are now focused on what we already know: The surest way to get a big salary boost is to change employers and stretch yourself.

Consider this handful of factoids and data cited by Bloomberg, from economists at the Chicago Fed, the Atlanta Fed, the New York Fed, and the St. Louis Fed:

  • “23 percent of employees are actively looking for another job on any given week, putting in four or five applications over a four-week period.”
  • “Employers are poaching workers, as 27 percent of offers to the employed are unsolicited.”
  • “Job switchers earned 4.3 percent more money in July 2016 than a year earlier, while people who remained in the same job enjoyed only a 3 percent increase.”
  • “The so-called quit rate, a favorite indicator of [Fed Chair Janet] Yellen that measures voluntary separations from an employer… has almost recovered to levels seen before the recession of 2007-2009.”
  • “Job-to-job changes and the threat of job-to-job mobility are strongly predictive of wage increases.”
  • “Job switching is ‘a good sign for the economy’ and ‘an indication of dynamism,’ according to the [Atlanta] Fed’s [President Dennis] Lockhart.”

And note this nugget of gold in the Bloomberg story:

“While [St. Louis Fed economist David] Wiczer said that the bulk of wage hikes occur from job switching, he cautioned that the gains are highly cyclical, as the median job switcher didn’t reap much of a salary increase during recessions.”

What this means to you: With the economy shifting from recession to inflation, your best bet to make more money today is to switch jobs. I’ll stick my neck out and say that my reading of the Fed analysis — and my own experience and reports from Ask Headhunter readers — is that that you also need to switch employers if you want that dramatic pay increase.

But you can and should optimize that bet by making sure the next job you take also enables you to be more productive. Of course, recruiters sabotage that objective almost daily when they solicit you for jobs that would set your career back five or ten years.

Warning! Warning!

We already know that most recruiters love to stick you into a “new” job that’s not new at all. They don’t get paid to give you a chance at career development — or to help a manager hire for the future. They offer the same job you’ve been doing because you’re the least risky choice for them.

They pluck you from thousands of job applicants only when their database algorithms show that you’re already doing the exact job they’re trying to fill. There’s no need to train you. You will require no learning curve. You are the safest bet and, if you’re unemployed, the recruiter knows he can probably nab your desperate ass for less than you were earning at your last job because you need a job.

But that recruiter is dangerously naïve. The “perfect match” won’t increase productivity because you’re being plugged into the same job you were doing elsewhere, and your motivation is going to plummet along with your value.

Even if the new job pays more than your last one, this is a huge red flag for employers, warns Giuseppe Moscarini, a visiting scholar from Yale at the Philadelphia Fed:

“What we should worry about are wage raises for workers who stay on the same job and are not getting more productive.” [Bloomberg Businessweek]

Whether the “same job” is at the same employer or a new one, Moscarini suggests wage inflation without higher productivity seems to fuel inflation in the economy.

Recruiter failure

I don’t think employers or economists see the razor that’s cutting into productivity and economic growth. But it should be clear to any Ask The Headhunter reader.

It’s the recruiters.

Most recruiters look for an exact match of a resume to a list of key words in a job description. They’re not assessing job candidates to find value a competitor missed or the value an employer can leverage into higher productivity and profit over time. They tell managers to interview any candidates the automated recruiting system flashes on their displays.

Recruiters, who are an employer’s front line in the talent war, are generally not equipped to do their own jobs. They’re doomed to fail because they’re not really recruiting. They’re checking boxes on a database app. The result is hires that are less than optimally productive.

Job Seekers: Follow the money!

The Fed economists are offering job seekers and career-oriented workers a gift of tremendous insight, even if it seems obvious: Your smartest career move may be to switch jobs and employers.

Pursue only jobs that offer you substantially more money and require you to stretch your skills and capabilities — that is, to do more productive work that’s more profitable for you.

That strategy, they also suggest, may be best for employers and for the economy.

Smart workers don’t change jobs or employers without an opportunity to learn and develop new skills, to take on greater responsibility or authority, to stretch themselves — and to make more money. Those who accept been-there-done-that jobs do it reluctantly or because they feel they have no choice, especially if they’re unemployed.

The Fed tells us not only that lots (23%) of employees are actively looking for new jobs, but that competitors are trying to steal them away. Done for the right reasons and for the right opportunities, switching jobs and companies can pay off big. Employers give people who switch 40% higher raises than they give to people who stay where they are (4.3% vs. 3%).

So, follow the money. When a recruiter pitches you a re-run job for little or no extra money, suggest he go find a job he’s better at — because he’s not helping you or the employer. He could be killing your career and the economy. Has anyone told that to the Fed’s economists?

Did you get a better raise for staying in your job, or for switching out? What was the percentage? Did a recruiter move you into another same-old job, or help you advance your career? What’s your take on the Fed’s findings and conclusions?

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How do I ask for 30% salary increase?

On December 5, 2016

In the December 6, 2016 Ask The Headhunter Newsletter, a reader wants a 30% salary increase to accept a big promotion and relocation.

Question

salary increaseAs a senior manager with a big manufacturing company, I lead a sizable sales team and have enjoyed good career growth over 18 years. I’ve been told I am a high-potential employee and they are considering me for a promotion to a director job at HQ or in one of our national regions, which would require a relocation. I’m ready to move, but I won’t do it without a considerable salary increase.

I have done some homework and 30% seems to be the right number. Our company typically would only give me a 10% raise. But my thought is that, if I am getting uprooted and taking on more pressure and responsibility, they need to compensate me for it. Is this a reasonable response to give them, or a bad one?

Nick’s Reply

Congrats on the good news. My view of this is, you put your proposal out there along with your justification, and that’s where the negotiating starts. But there are two potential issues.

  • Will you offend them because you dared ask for 3X what they were probably going to offer you?
  • Can you justify what you’re asking for?

Let’s consider the possibilities — and prepare for them.

The salary increase stinks

There’s not much you can do about management that gets offended easily, so you need to make a judgment. Could asking for so much get them upset? Are you prepared to deal with such a reaction? What I’m really asking is, would you decline the promotion — or quit — if they don’t give you what you think you’re worth?

Finally, have you prepared for the worst case — they dismiss you? (See Negotiate a better job offer by saying YES.)

You need to ask yourself what the odds are in each case, and you need to plan in advance what your response will be. Don’t wait to figure this out while it’s happening, because that’s when people make mistakes.

Your justification stinks

As far as salary surveys and what you’ve determined others are getting paid —that doesn’t matter to your employer. If they were looking at the same data you are, they’d give you 30%, right?

I believe people should be paid what they’re worth to a business. But I also believe it’s up to the employee or job candidate to demonstrate what they’re worth. The employer will not figure it out for you. Don’t rely on salary surveys like Glassdoor — your employer will tell you it’s not really relevant. (For other readers’ insights, see Am I chasing the salary surveys?) Best case, they’re looking to pay something “fair” that’s still a discount for them.

No matter what Glassdoor (or any survey) reports, all your employer has to say is, “Those positions don’t accurately reflect our company.” Or, your employer will bring out its own salary survey — which shows you’re not worth so much. (In that case, see Beat The Salary Surveys: Get a higher job offer.) If you base your case on such data, the negotiation will end there.

Make sure your justification doesn’t stink.

Be worth the salary increase you want

So here’s the only way to deal with this, in my opinion. The case you make for a 30% salary increase must address the benefits to your employer — not “what’s right” or “what everyone else is making.” That is, what will you accomplish during the next year, in this new job, that’s worth 30%?

Map it out. Produce a mini business plan that will convince them you’ve figured this out and that it’ll pay off for them, too. In my experience, that’s the absolute best way to negotiate a raise and a new job. (For a detailed approach to using a business plan to get what you want, see How Can I Change Careers? — it’s not just for career changers. Read “Put a Free Sample in Your Resume,” pp. 23-26.)

Compared to haggling about salary surveys, you’re far better off talking about your company’s business, its challenges and problems, and about a specific plan you’ve devised that makes you worth a 30% boost. The critical advantage of this approach is that it stimulates a discussion with your employer about something you’re expert at — your job. There’s the negotiating edge that can make all the difference.

Plan the outcome

There’s no reasonable or bad response to their offer. There’s what will work, and there’s what you’re ready to do if you don’t get what you want — assuming what you want is really that important to you. You must be ready to control the negotiation and to plan the outcome.

So there are really two challenges for you here.

  • First, can you demonstrate — hands down — that you’re worth what you’re asking for? (That is, worth it to the employer.)
  • Second, are you ready to walk away from this employer if you can’t get what you think you’re worth?

I wish you the best, and I’d love to know what you decide to do and how it turns out. I hope my comments help you in some way.

(Since you haven’t yet discussed this promotion with your company, there’s a completely different strategy you can follow. It’s covered in Fearless Job Hunting, Book 7: Win The Salary Games (long before you negotiate an offer), in the section titled “The Pool-Man Strategy: How to ask for more money,” pp. 13-15.)

Is a 30% raise even possible? How would you advise this reader? What are the angles and gotchas in this situation?

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HR Managers: Do your job, or get out

On June 27, 2016

In the June 28, 2016 Ask The Headhunter Newsletter, several readers raise questions about HR that we can’t keep ignoring.

Questions

this-way-outReader 1: Back in the 20th century, employers actually reviewed resumes by reading them rather than scanning them into a computerized ranking system. Keywords have turned hiring into a pass-the-buck game, with HR complaining it can’t find talent! Well, HR isn’t looking for talent. HR isn’t looking for anything. Phony algorithms are keeping the talent unemployed while HR gets paid to do something else! The question is, what is HR doing?

Reader 2: Two weeks after receiving a written offer from this company — and after I quit my old job and moved — HR sends me an e-mail saying there’s no job. That’s right: They hired me and fired me before I started! What am I supposed to do now? I can’t go back to my old job — I quit. The HR person who gave me the offer still has her job. Shouldn’t she be fired?

Reader 3: I was selected for a new, better job paying more money after rounds of interviews. I was all set to start when my HR department called me in to say the job was withdrawn due to budget problems. This was for a promotion at my own company! How did they have the budget a month ago when they posted the job and gave it to me, but not now? What can I do?

Reader 4: My friend attended a business roundtable where multiple employers complained they couldn’t find people. She stood up and said she was a member of several large job-search networking groups, with an aggregate membership of thousands in the Boston area. She offered to put them in touch, help them post positions, and contacted them multiple times afterwards to help facilitate this. Nobody has taken her up on it. Talent shortage my…!

Nick’s Reply

This edition of Ask The Headhunter is dedicated to good Human Resources (HR) managers who work hard to ensure their companies behave with integrity and in a businesslike manner toward job applicants — and who actually recruit.

This is also a challenge to the rest. Do the readers’ complaints above mystify or offend you? You cannot pretend to manage “human resources” while allowing your companies — and your profession — to run amuck in the recruiting and hiring process.

The problems described above are on you — on HR. It’s your job to fix them. Either raise your HR departments’ standards of behavior, or quit your jobs and eliminate the HR role altogether at your companies.

Here are some simple suggestions about very obvious problems in HR:

Stop rescinding offers.

oopsBudget problems may impact hiring and internal promotions, but it’s HR’s job to make sure all the i’s are dotted and the t’s are crossed before HR makes offers that impact people’s lives. Don’t make job offers if you don’t have the authority to follow through. If your company doesn’t give you that authority, then quit your job because you look like an idiot for having a job you’re not allowed to do. What happens to every job applicant is on you. (See Pop Quiz: Can an employer take back a job offer?)

Stop recruiting people then ignoring them.

In other words, stop soliciting people you have no intention of interviewing or hiring. More is not better. If it’s impossible to handle all job applicants personally and respectfully, then you’re recruiting the wrong people and too many of them. Either treat every applicant with the respect you expect them to show you and your company, or stop recruiting — until you have put a system in place that’s accurate and respectful. Having control over people’s careers isn’t a license to waste anyone’s time. Your company’s rudeness in hiring starts with you. (See How HR optimizes rejection of millions of job applicants.)

Stop recruiting stupidly.

stupidThe job of recruiting is about identifying and enticing the right candidates for jobs at your company. It’s not about soliciting everyone who has an e-mail address, and then complaining your applicants are unqualified or unskilled. You can’t fish with a bucket.

You say you use the same services everyone else uses to recruit? Where’s the edge in that? Paying Indeed or LinkedIn or Monster.com so you can search for needles in their haystacks is not recruiting. It’s stupid. Soliciting too many people who are not good candidates means you’re not doing your job. If you don’t know how to recruit intelligently, get another job. (See Reductionist Recruiting: A short history of why you can’t get hired.)

Stop demanding salary history.

It’s. None. Of. Your. Business. And it makes you look silly.

tell-meI have a standing challenge to anyone in HR: Give me one good reason why you need to know how much money a job applicant is making. No HR worker has ever been able to explain it rationally.

It’s private information. It’s personal. It’s private. It’s shameful to ask for it. Do you tell job applicants how much you make, or how much the manager makes, or how much the last person in the job was paid? If you need to know what another employer paid someone in order to judge what your company should pay them, then you’re worthless in the hiring process. You don’t know how to judge value. HR is all about judging the value of workers. You don’t belong in HR. (See Should I disclose my salary history?)

Get an edge when HR gets in your way!

Ask The Headhunter PDF Books

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Keep Your Salary Under Wraps

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Employment Tests: Get The Edge!

Overcome the daunting obstacles that stop other job hunters dead in their tracks!

Stop avoiding hiring decisions.

In a market as competitive as today’s, if it takes you weeks to make a hiring decision after interviewing candidates, then either you’re not managing human resources properly, or you’re not managing the hiring managers in your company. Qualified job applicants deserve answers. Taking too long to make a choice means you have no skin in the game, and that makes you a dangerous business person. After you waste too many applicants’ time, your reputation — and your company’s — is sealed. With a rep like that, good luck trying to get hired yourself.

Stop complaining there’s a talent or skills shortage.

There’s not. With 19.5 million people unemployed, under-employed, and looking for work (even if they’re no longer counted as cry-babypart of the workforce), there’s plenty of talent out there to fill the 5.6 million vacant jobs in America. (See News Flash! HR causes talent shortage!) Recruit is a verb. Get out there and find the talent!

If your idea of recruiting is to sit on your duff and wait for Mr. or Ms. Perfect to come along on your “Applicant Tracking System,” then quit your job. If your idea of recruiting is to pay a headhunter $20,000 to fill an $80,000 job, then you are the talent shortage. Your company should fire you.

“Human Resources Management” doesn’t mean waiting for perfect hires to come along. Ask your HR ancestors: They used to do training and development to improve the skills and talent of their hires — as a way of creating competitive value for their companies.

The good HR professionals know who they are. The rest behave like they don’t know what they’re doing and like they don’t care. We’re giving you a wake-up call. Do your job, or get out.

My challenge to HR professionals: If you aren’t managing the standard of conduct toward job applicants at your company, if you aren’t really recruiting, if you’re not creating a competitive edge for your company by developing and training your hires, then you should quit your own job. If you aren’t promoting high business standards within the HR profession, then there’s no reason for HR to exist. Your company can run amuck without you.

To everyone else: How do these problems in HR affect you?

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The mark of a promotable employee

On April 4, 2016

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?

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