Consulting Firms: Strike back & stir the pot

In the April 4, 2017 Ask The Headhunter Newsletter, a reader doesn’t like what some consulting firms serve up. What happens when we stir the pot?

Question

consulting firmsMy old consulting firm offered me the chance to interview for a full-time position in a smaller city over three hours away from where I am right now. My last contract ended a month ago, and just today I started a part-time job to slow the bleeding from my savings account.

The employer — the consulting firm’s client — refuses to do a phone screen, and insists that I drive over three hours, do a group interview, then drive home. Let’s see: mileage, wear and tear on my car, and losing an entire day where I have a lot of important things to do locally, all to interview for a job that (a) I don’t know if I would want, and (b) I don’t know if they would want me.

All that could be resolved (or at least mitigated to some degree) with a simple 30-minute phone conversation that they refuse to have. All right then, Company X, you decided for me — it’s not worth it! If you’re not going to respect this candidate, who not only has to spend an entire uncompensated day to interview, but also has to relocate if I did manage to get the position, then I’m walking away with my head held high. And no, even paying me mileage to get me to interview wouldn’t help. It’s more than the mileage. It’s the respect.

Am I being unreasonable?

Nick’s Reply

“Consulting” jobs seem to have changed the calculus of the job market — but not always for the better, and especially not when middlemen are involved. When you deal with an actual employer (your Company X) at arm’s length via a consulting or contracting firm, well, you call up the old saw about trying to wash your hands with rubber gloves on. You’re just not feeling it — and you’re at an enormous disadvantage.

The first question to ask is, who’s the jerk?

Is the consulting firm a jerk?

The “gig economy” recruiting practices of consulting firms create new problems — not just for workers like you, but for the employers that use them. Company X relinquishes its reputation to the intermediary consulting firm and its recruiters. Company X has no idea what that recruiter is saying to you or how it’s portraying Company X. This employer may be losing out on great candidates because the consulting firm is doing a lousy job of engaging with them.

Company X may be a great place to work, and it may treat people respectfully. It may have no idea what you’re being told.

A good headhunter or third-party recruiter manages the client company and helps it recruit and hire effectively. No recruiter worth his or her pay would use one-size-fits-all rules to recruit good workers. If the recruiter in this case can’t get the client to see the wisdom of a short phone call to establish mutual interest, then the recruiter and the consulting firm are jerks.

Is the employer a jerk?

The consulting firm and its recruiter, meanwhile, are so beholden to their clients that they’ll do anything clients want  — like making ridiculous, counter-productive demands on candidates they’re recruiting.

Drive six hours round-trip without reasonable due diligence and without pay? (See Why employers should pay job applicants.) If that’s what this employer expects from the talent it’s trying to recruit, imagine what it expects from its employees. We already know what kinds of consulting firms it deploys. What kinds of people do you think it hires?

Should you just say no?

When an employer asks you to invest time to discuss a job, it’s got an obligation to invest in respecting your needs and requirements, too — or it’s not worth working for.

You just said no, and I can’t fault you for that. But you can also strike back — which I recommend you consider. Just because the contracting firm or the employer are behaving like jerks doesn’t mean you should let it slide. Raise your standards, and maybe you’ll raise, theirs, too. If you want to try this, strap on a rubber apron, because it can get a little messy.

Stir the pot

consulting firmsNow that you’ve already said no, you can stir the pot. I love stirring pots. We never know what the result will be, nor does it really matter. What matters is stirring the pot, because that makes both the scum and the good stuff rise to the top so everyone can see what’s really in there. The fun starts if someone skims off the scum and it splatters. A mess like that usually triggers change. No mess, no change.

I don’t know how much you want to stand on principle, but even if both the recruiter and the client (Company X) are acting like jerks, my guess is that Company X’s top management has no idea how you were treated. It’s reasonable to assume the company’s leadership wants to hire good people fast without alienating good candidates.

You can strike back at consulting firms that act like jerks by stirring the pot. If I were you, I’d place a call to Company X’s CEO. Help the CEO see what’s in that pot. Leave a brief message that inspires the CEO to call you back.

How to Say It

“I just had a troubling transaction with your company. If it were my company, I’d want to know about it. My number is… Feel free to call me if you like.”

Avoid leaving any more details, even with the CEO’s assistant, who is likely to channel you to HR if you say any more. Don’t even hint it had to do with a job. Politely insist that your message is for the CEO. If the CEO cares enough to call you back, you may be able to make a difference.

Show the CEO what you found

I’d calmly explain what happened without betraying any anger, frustration or rancor. Pretend the CEO is your best friend and you just want to be helpful. Don’t dwell on how you feel. Keep it factual. Keep it brief. Close by saying you’re sorry the HR department and the consulting firm’s recruiter weren’t willing to save you a six-hour drive by doing a phone call. Explain that you admire the company and would have seriously considered a job there.

Then end the call — don’t let the CEO end it. This puts you in the more powerful spot.

How to Say It

“I didn’t call you to resurrect a job opportunity or get a phone interview. I called you because if it were my company, I’d want to know someone who works for me is squandering good job candidates in the middle of a talent shortage. If this helps you in any way, I’ll be glad. I wish you and your company luck.”

It’s up to the CEO what to do next.

Strike back for higher standards

This kind of call accomplishes a few things.

  • First, it demonstrates you’re a responsible business person and you care about your professional community — for the talent and for companies that need talent. This will come across to a good CEO if you keep the emotion out of your call.
  • Second, it can help the CEO. A smart CEO will go clean up the company’s own HR practices or the contracting firm’s behavior. The CEO won’t let the company keep getting splattered. (See Why do recruiters suck so bad?)
  • Third, you might just make an incredibly good contact that you’d otherwise never make. Handle this right, and you’ve got a new CEO friend.

Of course, you might wind up splattered, too — if the CEO doesn’t care about what you’ve revealed. Wipe yourself off and move on.

My compliments for keeping your standards high. Anybody who won’t take half an hour to talk with you to save you a six hour drive isn’t worth thinking about. If the CEO cares, you’ve just helped improve Company X.

Reconsider the consulting game

The other issue here is your “consulting firm.” I think I’d give them the heave-ho. While there are some good contracting firms out there that respect both their client companies and people they recruit, I think there are far more questionable practitioners of this corporate pimping game. (See Will a consulting firm pay me what I’m worth?)

Many people rely on contracting jobs and contracting firms to make a living, but I encourage you to re-think how you get your work. Find some good companies that will employ you directly. Take off the rubber gloves and make real contact. (See Pursue Companies, Not Jobs.)

The more I observe the mechanics of washing hands with rubber gloves on, the less I like it. Too many players in the consulting industry are acting too much like the second oldest profession in the world. Pimping workers and skimming cash out of the economy — while treating those workers disrespectfully and disdainfully — without adding any real value is a questionable business model at best. (See What the Federal Reserve doesn’t know about recruiters.) The talent starts to behave — and feel — an awful lot like the oldest profession in the world.

It’s not hard to recognize the good consulting firms. You know them from their reputations and from their behavior. But the talent seems to have become so accustomed to poor treatment that the bad players thrive. It’s up to you to know the difference.

Some will chide me for saying this, because the analogy might not seem fair. Maybe there’s something good in hiring a firm to hire your employees. But there seems to be an awful lot of scum floating in this pot. So pardon me if I stir harder — because I think we need to see what floats to the top.

Do you work for consulting firms? Do you prefer gig work, or do you take assignments because you feel you have no choice? What’s the good stuff about contracting? And what’s scummy about it? How do the recruiters treat you?

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Age Discrimination: The green antidote

Quick Question

age discriminationWe all know age discrimination is not legal. I’m an analytical chemist with a graduate degree and 40 years experience in analytical chemistry. Although I would love to retire and enjoy my grandchildren, I still have the desire (and mental capacity) to work. My issue is simple. I can’t get past the front door. Employers just look at the experience in years and it becomes a matter of “Let’s interview him so we can check off the EEO box.”

What’s the best way for anyone over the age of 50 to meet age discrimination head-on?

Nick’s Quick Advice

Part of what you’re experiencing — perhaps 20% — is definitely age discrimination. But the big backdrop is automated recruiting. That’s what is killing job opportunities across all age brackets. (See Why am I not getting hired?) In other words, your obvious concern is actually overshadowed by a far bigger problem.

Age discrimination is just part of it

I think 50% of rejections are about the algorithm missing the match. 30% is the personnel jockey reviewing the match and deciding this chemist can’t really do that particular job. Of course, that personnel clerk knows little if anything about chemists, chemistry, or the actual job, but since executive management doesn’t care what HR knows, you’re still screwed.

The best way to meet this problem is to avoid all automated recruiting tools that funnel you to personnel jockeys. You just have to get over the idea that “this is how hiring is done.”

It’s the people

The only solution I know is to carefully select companies you’d like to work for, figure out what problems and challenges each faces, and triangulate to find people who know people at the company. It’s all about the people who are near the job.

  • Hang out with them.
  • Talk with them, whether by phone, e-mail, discussion forums or over beers.
  • Make friends.
  • Then ask for advice and insight about that particular company.
  • Finally, request an introduction to someone in the department you want to work in.

Then repeat with each level of contacts as you get closer to a hiring manager. Never submit a resume or ask about jobs or job leads. Talk shop. This approach takes a while, but it works. Most managers prefer to hire through trusted referrals.

The Antidote: Get the manager past the grey

So you’re not looking for a job. You’re looking for people connected in some way to the company who will talk shop with you. That leads you to managers.

There’s an antidote to age discrimination. It doesn’t always work. For it to work, you must be talking with an employer whose goal is making profit. So pick employers carefully.

Your age doesn’t matter when someone tells a manager, “Hey, this person can do XYZ for you” — and XYZ is what the manager is dying to have done as soon as possible. At some level, XYZ always means making a business more profitable — always. (See Stand Out: How to be the profitable hire.)

When you show a busy manager the green, the manager looks past the grey. Here’s the catch: If this were easy, everyone would be doing it. So get to work.

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Is a 3-page resume too long?

resume

In the March 21, 2017 Ask The Headhunter Newsletter, a reader asks a perennial question about the resume.

Question

I have been receiving your weekly newsletter for some time and  I always appreciate your insight. What is your opinion of a three-page resume? I have been in professional positions since 1985. I find myself in job-search mode and I am having difficulties in keeping an updated resume to two pages. Thanks in advance for your time.

Nick’s Reply

Thanks for your kind words.

I’ve seen good one-page resumes and I’ve seen good 20-page resumes. I think a resume should be as long as necessary to accurately communicate what an employer needs to know about you.

That doesn’t mean you should not try to keep it as concise as you can. A resume is no place to list everything about your past. Employers don’t need to know everything. All they need to know is what is exactly relevant to them. The rest is interference that can lead to rejection.

What’s a resume for?

More important, a resume is not your “marketing piece.” That pronouncement is a career-industry marketing ploy to sell you unnecessary resume services. (See How (not) to use a resume.)

Most of the time, a resume does not get you in the door. Personal communications and referrals are the best way to get in the door. Your resume should be used to fill in the blanks about your credentials after you’ve established substantive contact with a hiring manager. (Yes, I know that’s not easy. That’s why the person who works hardest and smartest at this is most likely to win the job.)

While you’re waiting for one of the many resumes you sent out to get you an interview, your competitor is meeting with the hiring manager because he was referred by someone the manager knows and trusts.

What should your resume do?

Do you know how long the average manager spends reading a resume? Six seconds.

If your resume doesn’t deliver the goods — “Why you need me to boost your profits” — quickly, you lose. See Resume Blasphemy and “Put a Free Sample in Your Resume,” pp. 23-26, in How Can I Change Careers? (This PDF book is not just for career changers. It’s for anyone who wants to show they are the most profitable hire.) Here’s a brief excerpt from the book to get you thinking about your resume in a new, potent way:

“Give the prospective employer a free sample of what you can do. This will get the employer’s attention and it will distinguish you as a job hunter whose goal is to do the job for the employer, rather than just to get a job… You need to package the information in a way that says explicitly to a prospective employer: This is what I can do for you. Before you can deliver this job-offer-eliciting gift, you need to understand an employer’s needs. That means understanding the problems and challenges his company faces. And that can take quite a bit of research. Do it. There are no shortcuts to delivering value.”

Make your resume as long as it needs to be. Does it deliver instant answers to the questions on the manager’s mind? If you don’t know what those questions are, you’re not ready to write that resume. When you’re ready, you’ll know exactly how long it needs to be. (See Tear your resume in half.)

How long is your resume? How long is too long? More important, how do you use your resume? What’s the interview yield of the resumes you hand out?

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What the Federal Reserve doesn’t know about recruiters

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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The only 2 reasons to tell recruiters your salary

In the March 7, 2017 Ask The Headhunter Newsletter, a reader questions advice about divulging salary information to recruiters.

Question

recruitersI have your book, Keep Your Salary Under Wraps, about how to avoid telling an employer your salary history. I agree: Disclosing salary hurts your ability to negotiate the best job offer.

But now HR expert Liz Ryan asks, Should you tell a recruiter your salary? (Recruiters Don’t Need Your Salary History — But Here’s Why They Want It.)

She says absolutely not, and hundreds of people have posted their comments. Can we hear from another HR expert? I want to know what you say. Is telling a recruiter your salary different from telling an employer?

Nick’s Reply

I’m not an HR expert and I’ve never worked in HR — perish the thought. I always worked on the outside as an independent headhunter. According to Liz Ryan’s LinkedIn profile, her experience is in HR, not in independent recruiting or headhunting. That might explain our difference of opinion.

I don’t think you should ever disclose your salary history to any employer. (See Should I disclose my salary history?) But that’s not what Ryan’s column is about. What she is recommending is a dangerous whitewash of a more complicated issue. She’s saying you should never disclose your salary to a recruiter or headhunter.

2 kinds of recruiters

Let’s be clear on one thing, because it’s important. When she says don’t tell a recruiter your salary, Ryan is referring to a third party recruiter, or a headhunter — not a recruiter working in the employer’s HR department. (When you disclose to an employer’s recruiter, you’re disclosing to the employer.)

The recruiter she’s talking about will earn a fee if you are hired, and also stands to gain tremendously if you’re happy with your job offer and new job. Although the terms are often used interchangeably, to avoid confusion here, when we’re talking about an independent, third-party recruiter, we’ll call that a headhunter. A happy, newly placed candidate refers more great candidates that are worth a lot of money to a good headhunter.

Ryan is wrong because a headhunter’s motivation is very different from an employer’s. A good headhunter can use your salary history to help you, not hurt you, in part because the headhunter wants valuable referrals from you after you accept a new job she’s helped you land.

Employers and headhunters have different motives

Never tell an employer your old salary because he’ll use it to cap any offer he makes to you. In other words, your old salary becomes what’s known in behavioral economics as an anchor. It pulls down the job offer. (If your old salary is higher than the employer hopes to pay, you might be rejected outright, but that’s another discussion. Please see How do I prove I deserve a higher job offer?)

A headhunter actually earns a higher fee when your job offer is higher, so she’s motivated to get you the best offer possible without jeopardizing an offer altogether.

There’s no good reason to give employers — or their recruiters — your salary history.

But the only good reason to tell a headhunter your old salary is if it’s going to help you get a higher job offer.

And that’s where Ryan blows it while she bangs the drum to say no. She’s confusing motives, and that’s naïve. There’s more to it.

When to tell a headhunter your salary

testHere are my two rules about salary disclosure:

  1. If it’s an employer asking — the hiring manager, the HR manager, the HR recruiter, or the company’s online application form — do not disclose your salary, ever.
  1. If it’s a headhunter or third party recruiter, disclose your salary only if:
    (a) The headhunter agrees not to disclose it to the employer without your express permission. No exceptions.
    (b) The headhunter explains how she’s going to use the information for your benefit — and the reason had better be good.

If the headhunter can’t pass tests (a) and (b), don’t tell.

A good headhunter’s obligations

While a headhunter is paid by the employer and thus has a fiduciary duty to get the best deal for the client, the headhunter is also beholden to you if she wants introductions to more good candidates — and a sterling reputation in the professional community she recruits in.

So a good headhunter will not use your salary history to low-ball your job offer for the benefit of her client. If you think she’s going to do that, then walk away immediately — because that’s not a headhunter you want playing middle-(wo)man for you with any employer. (See How to Judge A Headhunter.)

When Ryan says not to disclose salary to a recruiter, what she should be saying is, Walk away from any headhunter you’re not sure you trust.

And that means most headhunters that solicit you — because they’re not headhunters. They’re unsavory spammers and telemarketers dialing for dollars. They’ll never do a good job for you. Work only with the best, or don’t work with a headhunter at all. Satisfy yourself that the headhunter is going to optimize your job offer — and, more important, get you in front of the right manager for the right job. Those are the headhunter’s obligations to you.

Now let’s discuss what Ryan avoids.

Why disclose your salary to a headhunter?

What legitimate reasons could a good headhunter possibly have for wanting to know your salary? If it’s me, I want to understand how your career growth and salary growth reflect one another so I can make a good placement — for you and for the client paying my fee.

  • Do I think you’re over-paid? Under-paid?
  • Do I think you’re squandering your abilities for too little money?
  • Is your salary expectation unreasonably anchored by your current salary?
  • How does that affect how you behave in interviews?

I’d rather discuss these questions with you before you talk with my client, because it could affect how I advise you to interview and negotiate.

Maybe you’re on the wrong career trajectory. You might be earning at the top of the range for, say, a digital design engineer. If you want to be an R&D engineer, you may have to take a step back in salary to shift to the new career direction. I want to prepare you for that. I don’t want you to get sticker shock after you’ve invested your time in interviews with my client.

If you don’t trust a headhunter like you’d trust a doctor when sharing your personal information, then don’t work with that headhunter. If a headhunter isn’t discussing these questions with you, run.

The 92% salary increase

I’ll give you an example of when it pays to tell a headhunter your salary. I recruited a candidate who was earning $40,000. I helped him get a 92% salary increase.

He was hoping to get a 10% salary bump. After a lot of assessment including talking with his references and having him talk with an industry expert whose opinion I respected, I knew he’d be great for a very different kind of job with my client.

If I hadn’t asked for his salary history, he’d have blown the interview, because the job paid over $70,000. His jaw would have dropped if this came up in the meeting with my client, and he’d have betrayed his old salary if only in his body language. My client never would have offered what he was worth. I’d have had no idea, if I didn’t know the candidate’s salary.

We had a long talk about how to behave while discussing a job that would almost double his salary. Based on the candidate’s aptitude, I negotiated a $77,000 job offer. My client never batted an eye, and never learned what its new hire had been earning. The candidate and his wife were able to buy their first house. I earned a nice fee — and several great referrals. The new hire performed so well that I got more search assignments.

I asked for, and got, the candidate’s salary history — but I never disclosed it. I used it to coach him properly so he could get a better deal.

If you’re not satisfied a headhunter is going to work that way with you, hang up the phone or delete her e-mail.

Liz Ryan is wrong

A headhunter is not an employer. Different rules apply when a job seeker deals with a headhunter. It’s up to you to understand the differences. That’s why I wrote a 130-page book about How to Work with Headhunters, and how to make headhunters work for you. What I just explained is in the book.

Liz Ryan sometimes offers good advice. This time Liz is wrong. She sounds right because she’s being contrarian, but she’s whitewashing a question that requires more insight and discussion.

Her advice to not disclose your salary is reasonable only if you’re dealing with a questionable or unsavory headhunter or recruiter — but in that case, you shouldn’t be working with that recruiter anyway! Just as there are lots of lousy HR people who will waste your time, there are loads of unsavory headhunters. (See Why do recruiters suck so bad?)

Know when to say yes

If you’ve properly vetted the headhunter, and the headhunter gives you satisfactory answers to the two tests I posed above, you might gain a lot by letting the headhunter know your salary history so she can assess and coach you properly. Make sure the headhunter will:

  • Keep your salary information confidential — that is, won’t disclose it to the employer — and,
  • Use the information to your advantage.

A good headhunter stands to make a lot of money by helping you get the right job for the best possible salary. And the headhunter’s client never needs to know your old salary. But it’s up to you to draw a line in the sand. Don’t be afraid to say no — and know when to say yes.

9 tips for dealing with recruiters and headhunters

If you don’t know how to separate good headhunters from unsavory ones, check the nine tips in The truth about headhunters.

Do you tell recruiters your salary? Why? If you’re not sure why, then don’t do it. How do you handle headhunters and employers’ own recruiters? How do you keep control of being recruited?

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Should I quit before finding a new job?

Quick Question

quitWould you ever advise quitting a job before having another one lined up? I have completely lost faith my employer and job and I fear getting fired or worsening what’s left of my relationships here. I’d like to quit now. Is that a bad idea? Thanks.

Nick’s Quick Advice

People do it all the time — they quit their job before finding a new one. I suggest taking a little time to think it through. Emotions can carry us away and lead us into poor decisions. Time has a way of separating our feelings from the facts. (See Is it time to quit my job?) I’m not saying you should not just up and quit — that’s up to you.

There’s also the “how” of quitting to consider. For more about this, see Quit, Fired, Downsized: Leave on your own terms. Make sure you control your exit and that “the door doesn’t hit you on the way out.”

Think before you quit

But if there’s no urgent reason to act now, pause and:

  • Consider what options you really have, and,
  • Map out the possible consequences of whatever you decide.

That is, is quitting your only option? Can you transfer to another job or department or company location that might solve your problem? And, if you quit suddenly, how will that affect your life?

Here are some other questions to consider:

  • Can you afford a protracted unemployment if you quit without a new job?
  • Do you have enough savings to tide you over for 3-6 months — or longer?
  • Do you have good job prospects that you could develop quickly?
  • Considering the area where you live and work, are you job hunting in a field where being unemployed will affect how you’re perceived in job interviews?
  • Will being unemployed help you devote the necessary time to job hunting? Will it improve your state of mind?

Depending on your answers, quitting immediately could be a good idea. But only you can make the judgment.

Unemployment bias and misery

As a headhunter I’ve never worried that a good candidate was presently unemployed — but some headhunters, recruiters, HR people and employers have a bias against unemployed people. It’s goofy — it reveals that employers and recruiters don’t trust their own judgment of a person’s value, and they don’t know how to identify discounted value that they can capitalize on. But you may find yourself dealing with that bias.

If you’re planning to get a new job through strong personal contacts, those contacts may have enough positive data about you that irrational biases won’t affect you.

The flip side of bias against unemployed job seekers is bias against demoralized, discouraged and unhappy job seekers. If staying at a miserable job while you’re interviewing for new jobs renders you ineffective, then it may be better to just quit and get excited about getting that new job!

I don’t offer quick and easy answers because there are none. My mentor taught me long ago: “Use your judgment, and do the best you can.” Focus on the two bold-faced words. Think about the benefits and risks, and go from there. I really think that’s how to go about it. I wish you the best.

(If you’re going to quit, do it right. Take a look at the topics list for my PDF book, Parting Company: How to leave your job. How you leave can affect a lot of things you may not be aware of.)

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WANTED: Top talent to work for dog food

In the February 28, 2017 Ask The Headhunter Newsletter, the talent (a nurse) would rather walk dogs than work for kibbles and bits.

talent foodQuestion

There’s no skills shortage, no matter what anybody says. If there’s a shortage why am I working as a waitress making more than I could nursing, which I’m certified in? I have a college degree, because I was told it was necessary in today’s market to compete. One interview after another is a waste of time. HR tells me I “look good” and to expect a call. And the permanent and contract offers I’ve gotten — I could walk dogs and make more. There’s so much talent that hospitals just wait for somebody who will work for peanuts. And they are rude. Does anybody want to hire an experienced RN for a living wage?

Nick’s Reply

Two reports from the Pew Charitable Trusts issued late last year tell us a lot about the problems you’re describing — but you’re not going to like what they say:

Imperfect candidates need not apply

A lot of healthcare facilities need experienced RNs (registered nurses) and require degrees. But they don’t want to pay for your degree and experience. I suggest you send a few quotes from Pew to your legislators.

“Hospitals, nursing homes, home care agencies and doctor’s offices, like a lot of employers across the country, have a specific resume in mind. Employers often want new hires to have experience in a specialty such as operating room nursing.”

They’re looking for perfect candidates. (See The Training Gap: How employers lose their competitive edge.) The problem is clear: Employers don’t want to invest in training, on-the-job experience and development, or in a learning curve. They want someone who’s been doing the exact job for three years already. The question is, why would someone like that change jobs just to get the exact same job?

Where are competitive wages?

Pew offers a suggestion that healthcare administrators should be spanked for pretending not to understand:

“A long-term solution for the nursing workforce also would have to resolve critical pay issues, including whether Medicare and Medicaid fee schedules support competitive wages, and figure out how to make sure nurses don’t get burned out and quit.”

Pew also addresses another common problem:.

“Employers also have a retention problem. Being a nurse is demanding, and new nurses, like new teachers, are particularly likely to leave their jobs: About 20 percent of new nurses quit within a year, according to a 2014 study.”

Duhhh… Do you think it has something to do with the fact that you can make more money waiting tables at a good restaurant? (For tips about negotiating a job offer upwards if you manage to get an offer at all, see Negotiate Even The Worst Job Offers: Say Yes, IF.)

Meatball management

This is not a problem just in healthcare. The Pew reports cover all kinds of jobs, and reveal that employers across industries are eyeing talent they want but refuse to pay for it.

“To [the head of Minnesota’s Labor Market Information Office] … the focus on work experience suggested that employers were being too picky. They wanted to hire someone who could be fully productive on day one. But at the same time they weren’t willing or able to pay enough to attract that perfect candidate.”

There’s that problem again: Cheapskate employers.

An accounting manager told me last week that his company — whose business and profits are “growing like gangbusters” — has a customer support staff of seven. “We really need 15 just to support the customers we already have,” he complained. “But it’s impossible to find qualified people.” I asked what the job pays. “$7.50 an hour,” he answered. “Our turnover is over 20%. It’s terrible.”

No kidding.

Pew suggests businesses’ eyes are bigger than their budgets. But it seems the real problem is a kind of cognitive deficit in the ranks of management.

“It’s worth noting that employers can’t always diagnose their own problems. Only 22 percent of employers surveyed by Utah’s Department of Workforce Services last year named low wages as a hiring problem, but 68 percent of those employers were offering below average wages.”

Someone is thinking steak, while budgeting for meatballs.

“We want college degrees we don’t need!”

Then there’s the claim employers make that today’s workforce just isn’t well-educated. Or, is it possible that employers want more education than jobs require?

Pew hits the nail on the head again:

“The overwhelming majority of open production jobs across south central Minnesota don’t require a college degree, in fact. Nor do almost two-thirds of openings statewide.”

Yet employers ask for a degree — just because they can. It used to be a nurse needed only a certification to get a job in a hospital. It seems now hospitals want education they don’t need — but aren’t willing to pay for.

Reports Pew:

“In New York, for instance, there are more licensed RNs in the state than there are jobs for them. So employers are raising the bar, saying, ‘Hey, if I can get a [nurse with a] bachelor’s degree, why not?’ said Jean Moore, director of the Center for Health Workforce Studies at the University of Albany.”

WANTED: Top Talent Cheap!

So there you have it. The Pew Charitable Trusts suggest employers are the problem, not nurses, or anyone else. While more training and education can certainly be beneficial to anyone who wants to excel in their line of work, it seems employers think training, education, and talent shouldn’t cost much to hire.

I wish I could give you an answer to your problem. And I wish the Pew reports covered the other elephant in the room — recruiting tools used by employers that make it easier to reject good applicants than to hire them. For more about that, see Employment In America: WTF is going on?

Meanwhile, what are we going to do about cheap employers?

Is there a talent shortage, or a shortage of good pay for good workers? Are modern, automated recruiting systems the solution, or do they just make it easier for employers to reject imperfect job applicants who won’t work for peanuts?

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Recruiters: Raise your standards or get out

In the February 21, 2017 Ask The Headhunter Newsletter, a reader asks how to test recruiters, and hangs up on them.

Question

recruitersI keep getting random e-mails from recruiters. I have finally hit the breaking point and now I have a new response: “Thank you for your interest. I am not searching at this time. In addition, I work only with hiring managers, never a recruiter.”

Am I being arrogant or even cocky? I mean, people are writing to me about jobs where I do not see a good fit. I have only worked with one good headhunting firm, but they usually only deal with positions 2,000 miles away from me. (They placed me twice when I lived near them and I did very well in both positions.)

On one hand, I don’t want to burn bridges, but on the other hand, as a 51-year-old engineer who plans to continue working for as long as I can, the positions I look for are not going to be listed on monster.com — they are going to come about through people I know. I want to know what you think. Is there a good way to test recruiters?

Nick’s Reply

You’ve given me an opportunity to say something to recruiters, also known as headhunters. I’ve wanted to say it a long time: Raise your standards, or get out of the business. The rest of us are sick of you.

But first let’s get to your problem with recruiters.

If they’re e-mailing you about the wrong jobs, they’re not recruiting you. It’s called spam and it’s generated by software. That’s the first way to test recruiters. (See Help! I’m a floundering headhunter!)

A good headhunter knows how to contact you properly, how to get your attention honestly, and what kinds of jobs to bring to you. You would be worth tens of thousands of dollars to a headhunter. Why would he trust an e-mail? Good headhunters call you — they don’t e-mail. That’s the second test.

The rest of those “recruiters” are finding your name or profile on LinkedIn, running a key word match, and pushing a button — or using an app — to send the same mail to thousands of people. (See Good Headhunters: They search for living resumes.) I wouldn’t be afraid of alienating recruiters who don’t even know who you are! If they knew you, they wouldn’t waste your time, as you’ve already noted:

“the positions I look for are not going to be listed on monster.com — they are going to come about through people I know.”

Test recruiters

So here’s the most important test. When a “recruiting” mail or call comes in, do you know the person? No?

BAM. Delete or hang up. It’s a blind solicitation. When the Publisher’s Clearinghouse is ready to give you a prize, they come to your door with a check. They don’t e-mail you.

In fact, that’s a very good analogy. Consider this warning from The Balance about scams purporting to be the Publisher’s Clearinghouse contest:

“Although PCH’s sweepstakes are legitimate, you still need to be very cautious if you receive a prize notification from PCH. Like other big companies (including Reader’s Digest, Heineken, and more), scammers try to seem more legitimate by sending letters or e-mails that claim to come from Publishers Clearing House. These scams can look official, but they are not backed by PCH.”

In the recruiting world, you must ask yourself, “Is this recruiter backed by a real employer?” That is, does the recruiter have a contract to fill jobs for an employer? If you don’t know, or don’t ask for proof, then you’re either wasting your time or being scammed. Most recruiters are not for real because they’re not really recruiting for an employer. If they find a willing candidate with good credentials, they will then shop you to thousands of employers like they shopped a job description to thousands of e-mail addresses.

I think you get it. You don’t need my permission to delete junk mail. (See How to judge a headhunter.)

If a solicitation intrigues you, here’s how to test recruiters you don’t know.

How to Say It

“Who is the employer?”

If they won’t tell you, I’d hang up. Don’t bother with excuses about how it’s confidential. Either the recruiter wants to do business or doesn’t.

“Are you employed in the HR department of the employer whose job you’re trying to fill? Or, are you a third party?”

If they’re a third party — that is, an independent recruiter, headhunter or search firm — that’s not a bad thing. But you need to know whether they’re legit. And there’s just one way to determine that:

“Can you give me proof you are authorized to recruit for the employer?”

That’s right: Make them prove they recruit for the employer. How? I’ll tell you in a minute. A legit recruiter can prove it, and you’ll know when the proof is presented to you.

You’re not the only Ask The Headhunter reader who complains they’re fed up with jerks pretending to be recruiters. I hope that helps. 51-year-old engineers are pretty smart. Trust your judgment.

Recruiters: Raise your game

Now let’s get back to what I really want to talk about, thanks to a reader who’s brought up the problem. And it’s a huge problem. Employers, job boards, ATS vendors, the HR profession, LinkedIn, Indeed — the entire bloated employment system turns a blind eye and tacitly ignores this problem for the sake of making money:

Most recruiters suck.

If you’re a typical recruiter, I’m sure you’d like to smack me upside the head for the advice I just gave the reader who asked this week’s question. You’ll argue that you can’t just disclose the identity of all your clients when you’re recruiting — not until you’re sure the candidate is right for the job. You’ll argue that there’s no documentation you can show the person you’re calling, to prove you’re authorized to recruit for the employer.

Bunk.

Do you suck?

If you’re a good recruiter or headhunter, you know what a mess the employment system is. You know you face staggering competition from unsavory recruiters who pollute the pond you’re trying to work in — recruiters who suck. So it’s up to you to raise the standard of conduct when you solicit people for jobs.

Show them you stand out:

  • Be ready to disclose what company you’re recruiting for.
    Sound risky? Figure it out because if you don’t, it’s going to cost you business. People are fed up with a corrupt, smelly recruiting industry. Rise above it. Be the recruiter who answers the question, because the candidate needs to know.
  • Be ready to show proof you recruit for the employer.
    Yep, I know this is a new idea. Adopt it. You don’t need to show anyone the recruiting contract you have with the employer. That’s confidential. But get a letter from your client that states you’re authorized and under contract to recruit for them — and arrange a confirming call with your client if necessary. Or, consider yourself no better than the scum who are competing with you, dialing for dollars, wasting talented people’s time.
  • You say you don’t want to disclose who your client is…
    …until you’re sure the candidate is worthwhile? Then you’re not doing your job. Your job is to check people out before you contact them. If they’re not worth disclosing your client’s name, then they’re not worth calling. Do the hard part of your job first — vet people before you expect them to invest their time with you. It’ll raise your game.

If the best recruiters and headhunters raised the standard of recruiting on just those three points, the whole system would change for the better. Seasoned, desirable engineers and other professionals like the one who submitted this week’s question would be a lot easier to work with with because they’d be able to trust the person calling them. But that trust has to be earned. Otherwise, you’re just a spammer and the person you’re contacting should delete your e-mail or hang up. Get out of the business!

If you’re a good recruiter, how do you make it easy for people to know that? If you’re getting calls from recruiters, how do you test them? What other sound, reasonable rules of conduct would you like to see recruiters obey?

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Topgrading: Employers looking for liars

In the February 14, 2017 Ask The Headhunter Newsletter, a reader discovers topgrading and the A, B, Cs of hiring.

Question

As an employer and interviewer I’ve been reading about topgrading and would appreciate your thoughts and expertise on this topic.

  • How familiar are you with it?
  • Have you performed many topgrading interviews?
  • Have you seen many companies using it? How well did it work for them?
  • Do you know any topgrading experts I could connect with and learn from?

topgradingNick’s Reply

I don’t have to drink cynicism to know it’ll poison me. And I think topgrading is as cynical a way to assess job applicants as any job-interview tool you’ll encounter.

Topgrading was invented as a selection technique by Brad Smart at General Electric, during the tenure of “Neutron Jack” Welch, the CEO who invented stacked ranking of GE employees. It’s hard to tell which idea was the parent and which the evil spawn.

Also known as “rank and yank” and “forced ranking,” stacked ranking  was how Welch routinely got rid of 10% of his workforce. Managers were forced to rank all employees and to fire the bottom 10% — supposedly the weakest ones. As you can imagine, a team of top workers runs paranoid when everyone knows 10% will be cut regardless of how productive they are.

In other quarters, the practice is known as an HR Witch Hunt.

Topgrading is really nothing more than stacked ranking applied before hiring.

I’ve never performed a topgrading interview because I want to go to heaven. And I don’t have clients that use it because I wouldn’t subject my job candidates to it. If you want to find a topgrading expert, you’re on your own.

What is topgrading?

It’s worth understanding what topgrading is, especially if you’re going to be subjected to it when you’re applying for a job.

Like stacked ranking, it assumes that there are three kinds of workers. A people, who are worth keeping or hiring. B people, who aren’t. And C people, who have a kind of corporate leprosy or pellagra and will infect your A people if you let them in the door. (Don’t worry, there’s a way to keep them out — we’ll get to it.)

If you view the world as A, B and C people, you have no business in business. You’re a cynic who likes everything neatly labeled, and who likes things that don’t change.

The other big idea in topgrading is that you can figure out who’s an A, a B, and a C. Of course — here it comes — you can pay Topgrading, Inc. to learn how to separate the As from the Bs and Cs. The company claims its sorting method yields 75% A hires.

If you believe that, you probably have a stockbroker whose stock picking method delivers 75% winning investments. Which means you lost all your money to Bernie Madoff.

You might well ask, if Topgrading delivers 75% A hires, why isn’t every company using it? You might well ask.

A bad attitude

Ranking people to identify who will and won’t succeed isn’t so much a mistaken idea as it is a bad attitude.

Topgrading is based on a cynical premise — that candidates lie in job interviews. That’s a hoot coming from the guys who invented it — interviewers from GE who fooled loads of companies into using stacked ranking.

I’m not a fan of tricky interview methods. It would be interesting to see a corresponding methodology that attempts to identify employers who lie in interviews, and when they’re recruiting.

Consider what Topgrading, Inc. says to managers who’d like help hiring more effectively:

  • “there’s no verifying if candidates tell you the truth”
  • “Topgraders hire A players most of the time using because they use the ‘truth serum’ technique”
  • “It is an inexpensive tool that scares away low performers”

It sounds like a panacea for managers who believe most job applicants — non-A people — are liars that need to be scared away. Perhaps an effective sorting technique for companies is to look at which managers want to use topgrading, and fire them to get rid of the cynics.

The big idea

There’s just one big idea in topgrading: a technique used to expose all the liars who apply for a job.

Topgrading, Inc. calls this big idea “Threat of Reference Check” or TORC. It’s simple. You threaten all job applicants with reference checks before you even let them in the door. Here’s how they explain it:

“Because candidates know they will arrange reference calls, they tell the whole truth. And finally, you verify everything by talking with bosses (and others YOU choose); there is no phone tag because candidates arrange those calls.”

Get it? This threat “scares away low performers.”

An HR exec unloads on topgrading

Mike Smith is an HR executive in the San Francisco Bay Area who produces a blog called Back West. He rips the heart out of topgrading in Talent Wars: The “A” Player Hoax.

Smith says topgrading is a lie, and cites “performance research wonks” whose work suggests topgrading is simplistic:

“The prevarication that success comes to companies that systematically hire and develop only ‘A’ players is twofold:

  • “One, that talent is innate and that you really can’t do much to develop the 65% of your workforce that are “C” players, and
  • “Two, that filling your roster with all stars – and forgetting about things like right role, right culture, right boss and workgroup – is the simple (although it’s simplistic) fix.

Smith offers this caution to gullible employers: “Performance, both with individuals and organizations, just doesn’t work that way.”

The stack crashes

I think the best evidence that topgrading is crap lies in the highly publicized crash of Neutron Jack’s stacked ranking.

In 2014 The Wall Street Journal declared, “It’s Official: Force Ranking Is Dead.” The HR blog, Namely, tells how GE settled a $500 million lawsuit alleging forced ranking was biased against women. Yahoo! got sued over a claim that forced ranking was rigged — against men. In 2015, The Atlantic ran story about How Millennials Forced GE to Scrap Performance Reviews.

It turns out you can’t invest your money using a special method that ensures 75% of the time you’re going to win. And you can’t ensure 75% of your hires will be A people because, well, there’s no such thing as A, B and C people — or a way to separate them into bins.

Topgrading ranks right up there with Jack Welch’s two-dimensional vision of how to manage people — “rank and yank.”

There are far better, more direct ways to assess job candidates. For example, invite them into live, working meetings of your team, and watch how they behave and perform. (See Big Data, Big Problems for Job Seekers?)

Run

The prevalence of indirect job candidate assessment methods like stacked ranking and topgrading has led management in America off a cliff. Perhaps it’s because managers expect just-in-time, perfect hires. They have no idea how to develop and invest in their employees. If they did, they’d know how to find them and interview them, too. (See HR Technology: Terrorizing the candidates.) If managers were looking for talent, they wouldn’t be using techniques that focus on finding liars.

If you’re a job seeker, and a company tells you it does uses topgrading interviews, I think that should tip you off to find out whether management also practices stacked ranking — openly or surreptitiously. If it does, my advice is, Run. It’s not healthy to work for cynics. Find an employer that respects you. (See Smart Hiring: A manager who respects applicants, Part 1.)

Have you been topgraded, sliced, diced and cut from the list? Ever been stack ranked, yanked and jerked around? Ever interview with a company that assumes you’re a liar? If you think tograding is a great idea, tell us the A, B, Cs of how it works for you.

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Why employers should make higher job offers

In the February 7, 2017 Ask The Headhunter Newsletter, a reader marvels at employers who discount job offers to save money.

Question

job offersI worked as an intern while in college, and after graduation they offered me a job. It was my first experience negotiating higher job offers. I discussed my proven performance and gave examples that demonstrated my value. The employer granted me the higher salary.

My advice to others is to capitalize on your value and have the courage to negotiate for what you think you’re worth. Of course, your value may not be viewed as high as you think. That’s okay. Just weigh the pros and cons of the position along with your needs and make a decision. Either way, keep in mind, it’s up to you.

But here’s what’s interesting. After I accepted the position, I went back to the hiring manager and asked why he offered a lower salary to begin with. He responded, “If you had accepted the lower salary, I would have saved $3,000 a year.” What do you think of that?

Nick’s Reply

It’s astonishing is how casually the hiring manager responded that he’d save money if you had accepted a lower job offer. On its face, that might seem like simple market economics. But there’s a profound fallacy underpinning the manager’s behavior.

Salary is not an expense to a company, though that’s how accountants portray it, and everyone accepts that. What a company pays you is an investment. And that’s not semantics. A company buys a piece of equipment as an investment against an expected return — and capitalizes it. An employee is capital, too — the employer expects an ROI (return on investment). The fallacy is that an employer can save its way to higher returns by making lower job offers.

Of course, with machines or people we want to pay less to maximize our ROI. But neither is simply an expense.

The value of higher job offers

All my life as a headhunter I’ve encouraged my clients to offer a desirable job candidate more than the candidate asks for or expects. The reason is simple.

Unlike machines, people perform better when motivated. So, when a candidate expects $75,000, offering the candidate a totally unexpected $78,000 triggers an incredibly valuable response: enthusiasm and motivation. Even gratitude. For an extra 4% investment, the employer will likely get far more than a 4% higher return.

However, when they offer less, I think employers suffer with a far lower ROI than the salary savings might suggest. (Maybe you’ll argue with me; that’s what the comments section below is for.)

Managers like your new boss may think they’re being rational by offering less to save money. They’re missing an opportunity to get a higher return. Salary isn’t an expense. It’s an investment. Done right, investing more returns more.

(See Goodbye to low-ball salary offers.)

Why employers hire

Remember: We’re saying the employer really wants to get that very desirable candidate on board. (What other kind of candidate would the employer hire?) So why not maximize both the chances the candidate will accept the job and the potential return by making a higher job offer to prove it?

Nobody ever worked harder or more enthusiastically because a company low-balled them.

But I don’t want to skip over the reality. I parenthetically asked what other kind of candidate an employer would hire, if not a very desirable one. I think much of the time employers hire like they’re checking off boxes and plugging holes in leaky companies. They aren’t thinking about boosting the bottom line by making a really good hire.

And that’s why they see no value in higher job offers, but are proud of saving money when candidates accept lower offers.

In my book, Keep Your Salary Under Wraps: How to say NO when employers demand your salary history, to make them say YES to higher job offers, I quote an HR manager who sent me an astonishing complaint about my advice that job seekers should never disclose their salary history. She said:

“Employers want your salary information because they believe that if you apply for a job that starts at $50,000, but you made $30,000 in the same sort of job at your last company, they’d be overpaying. They’d want the opportunity to buy you for $35,000 to start, saving them $15,000. The HR person who does that gets many kudos for their shopping moxie from their boss, and gets to keep their job and go on many more shopping trips.”

Many managers don’t hire to make more money for their companies. They hire to save money for their companies by using less of the hiring budget. As if the purpose of the hiring budget was to save it!

I believe treating salary as an expense makes it far easier to hire and fill jobs. If the outcome of hiring and filling jobs were measured on ROI, most HR managers and hiring managers would be fired.

I wonder how many CEOs and boards of directors realize their accountants and HR departments are saving their way to higher profits!

Nice work!

I realize your main point is that you succeeded in getting a higher offer not by just asking for it, but by demonstrating your higher value. Nice work! (See The ONLY way to ask for a higher job offer.) Your story delivers a valuable lesson to others.

But I was tickled by your new boss’s suggestion that if he’d paid you less he’d have saved money. My guess is you’ll work harder than the extra three grand cost him — and he’ll make more money.

Am I nuts?

Why should anyone pay a job candidate more than they ask or expect? Is a candidate really more likely to accept a slightly higher offer? Will a bit more money motivate better work? I can’t prove it objectively, but I think yes.

What do you think? Does that little boost in an expected job offer pay off? Is salary an expense or an investment? Has an employer made you a bigger offer than you requested or expected? Did that make you more productive?

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