My boss won’t deliver a promised raise

In the March 10, 2015 Ask The Headhunter Newsletter, a reader complains that the boss laughs off a “small” raise.

Question

underpaid-crumbI work for the CFO of a huge company and I am grossly underpaid. When I brought this to his attention (several times) he finally thanked me and laughed it off, saying that I was slightly underpaid. He promised to work with HR to get me the small difference. That was in January. We are now in March. He even pointed out it wouldn’t really affect the budget for the year. It’s so small — yet he has no time to follow up on the paper work. I’ve been in contact with the compensation manager, who said they are waiting on my boss to make the next move. My boss keeps saying “it’s in process.” A “slight increase” to me is enough to cover gas for the week. I’m sure if he’s measuring it up to his $500k salary, it would be considered slight. What should I do?

Nick’s Reply

I’ve been in your situation myself, and I rationalized that “these things take time.” They do, but it’s incumbent on your boss to keep you apprised of progress — and to get it done. Or why is he the boss?

It sounds to me like he’s not on the same page about this, no matter what he says.

I see two disconnects:

  • You think you’re grossly underpaid, but he thinks the difference is slight.
  • He says he’s taking care of it, but the comp manager says that’s not true.

These are not good signs. You must decide whether these are signals that you need to be working for a company and boss that value you the way you think you should be valued.

I’m not suggesting you should stir up trouble. If you press this, you could get under your boss’s skin. Because this seems to be a trifling matter to a man who’s paid handsomely, it might be more of an irritation than he thinks you’re worth. In other words, it might cost you your job — and I don’t want to contribute to that if it’s not worth it to you.

But if your boss doesn’t come through with a reasonable increase, you should perhaps hedge your bet by having other options ready to go.

When I went through this once, I waited and negotiated for months. Nothing came out of it. But I finally lined up another job elsewhere. When my boss once again delayed a resolution, thinking he’d just keep me hanging, I submitted my resignation — and I let him figure out what happened.

Nothing makes you more powerful; nothing lets you make intelligent choices; and nothing keeps your spirits up — like having a good option B when option A doesn’t work out.

Because my option B was ready to go, I didn’t even vent my spleen on my jerk of a boss when I quit. I just smiled and moved on. It wasn’t worth explaining it to him because, thanks to the existence of option B, I really didn’t care and mentally I had already moved on! If I wasn’t worth an honest effort at correcting my salary, then my employer wasn’t worth a worry on my way out the door.

We came across a more extreme example of your problem last year: What to say to a stingy boss. While your boss doesn’t sound as bad, you’re still stuck without a raise after a lot of talk. Three months is plenty of time to be patient.

My advice: Even if you don’t need to use it, get yourself an option B. It will free you to look at this in an entirely different way. It’s not good to be under someone else’s thumb with nowhere to go.

For your next job, try this approach to compensation: How to decide how much you want.

How long would you wait for your boss to do what he promised? What else could this reader do?

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News Flash! HR Causes Talent Shortage!

Hold the presses! I’m going to show you how HR created “the talent shortage.”

I recently did a Talk to Nick consultation that illustrates why employers aren’t filling important jobs — while they complain there’s a talent shortage. The real talent shortage is in corporate management, where hiring is treated as an expense rather than an investment. Here’s what crummy job offers cost employers.

In the October 7, 2014 Ask The Headhunter Newsletter, a job seeker turns down a lousy job offer:

I heard from my old employer today. I got an offer that’s approximately the same amount I was getting paid when I left five years ago!

Background

low-offer“Mark” (not his real name) is a successful engineer who asked me for help in 2012 — to land a better-paying job elsewhere. He succeeded, and since then his engineering skills have grown and he has developed expertise in operations and quality assurance. This talented R&D engineer can now convert technically challenging concepts into products ready for production. His skills and abilities are far more valuable today than they’ve ever been. He contacted me again a few months ago when a manager at his old company encouraged him to apply for an R&D engineering position — in other words, to return.

After an hour’s consultation with me, Mark had a series of interviews, including a meeting with the manager who knew him so well the first time around. Here’s what Mark reported happened next.

Mark’s Story

I heard from my old employer today. I got an offer that’s approximately the same amount I was getting paid when I left five years ago! I declined to state my current salary in the screening interview, and instead explained the salary range I’d expect for an engineer with my experience. The personnel jockey replied that, “You know you will have to provide this at some point to move forward.”

I suspect the HR people pegged me based on my last known salary. If I had stayed with this company for five more years, I would be making more than the offer — a figure around my current salary.

I negotiated with the hiring manager, but HR handled the offer. There was some motion on their side, but only in the form of a one-time check that had large strings attached. The deal fell through. Companies succeed in spite of themselves!

The reasons why they could not improve the offer were as bizarre as some of the excuses I used to hear on my personnel reviews about why I could not be rated higher. In my conversations with the hiring manager, he stated that they recently lost a good employee in much the same way they lost me. I just chuckled. Thanks again for your assistance.

Nick’s Reply

The McQuaig Institute (a developer of talent assessment tools) recently polled over 600 HR professionals. The #1 reason they lose job candidates — reported by 48% of U.S. companies — is because the offers they make are too low.

HR knows where the talent shortage comes from: Lousy job offers.

Peter Cappelli, a human resources and labor researcher at the Wharton School, confirms that “employers can’t get candidates to accept jobs at the wages offered.”

Employers know exactly what the problem is, but they play dumb.

Cappelli points out, “That’s an affordability problem, not a skill shortage. A real shortage means not being able to find appropriate candidates at market-clearing wages. We wouldn’t say there is a shortage of diamonds when they are incredibly expensive; we can buy all we want at the prevailing prices.”

loserEmployers today refuse to pay market salaries and wages, then blame the labor force. (See How to decide how much you want.) That’s how HR — which took control of your job offer — lost you, along with other employees, and created the talent shortage at this company. This is how HR turns companies into losers.

It can be hard to swallow the reality that a company just isn’t going to make a prudent decision when it makes a ridiculously low job offer. I can’t tell you how many times I’ve advised clients to raise offers — after I’ve shown them what it’s going to cost to leave work undone. Crummy job offers also cost employers their reputation — in their own professional community when word gets out that their offers are too low.

Many just don’t get it. Employers incorrectly view hiring as an expense rather than an investment with an ROI. The great irony is, the actual extra dollars spent on higher offers are almost irrelevant when compared to the value the new employee will create. The more subtle lesson that some companies — but not most — learn is that enhancing an offer can make a new hire happy, more loyal, and more productive. Money doesn’t buy love, but it can buy better work.

However, Cappelli points out that corporate accounting systems do not track the cost of leaving a job vacant, making it appear that the “cost savings” of leaving the job empty translate into “profit.” (Yes, I’m still laughing my A off at that one. Call it revenge against the bean counters!) A crummy job offer costs an employer — and our economy — quite a lot.

Employers are shooting themselves in the foot when they make silly job offers. An engineer plus five years’ more experience, plus expertise translating designs into buildable, quality products, plus the maturity to work across corporate departments is worth more than the same engineer five years ago.

Except to a cheap employer with a serious talent shortage in the executive suite.

Good for you for rejecting a lousy offer. I realize not everyone can afford to do that. (See Turn down that job offer.) I think such jobs get filled because employers wear applicants down and convince them that “this is the way it is, and you should accept it.”

In Pursue Companies, Not Jobs, I suggest that you (or anyone) should pick a good company, take the best job you can get there, and navigate the company once on board to get to the jobs you really want in time. It’s all about the quality of the company and the people. Salary is such a small component of a company’s business, yet HR is so focused on it that enormously bad business decisions are made over a few bucks. (Meanwhile, HR blows billions on job boards, applicant tacking systems, and other automated “tools” to help it make more low-ball offers to save money… gimme a break!)

Your old boss confessed to you what crummy salaries and job offers do: They make talent disappear. So you don’t need a news flash — you already know.

Thanks for sharing the outcome. Seriously – move on to a better opportunity. Start picking your next target, and be ready to express your desired salary range, and to negotiate a fair compensation package. You’ll learn more in Fearless Job Hunting, Book 9: Be The Master of Job Offers, and in Book 7: Win The Salary Games (long before you negotiate an offer).

Have employers created the talent shortage? Are they paying for crummy job offers in ways they don’t realize? Have you been smacked with a ridiculous offer? What implications do you think this has for our economy?

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