After more than two decades in the Executive Search
business, I have learned a lot about what goes into a
successful hire. I try to impart my knowledge to both hiring
managers and candidates. Nevertheless, at many job
interviews I find myself listening to questions that make me
cringe and answers that make me want to cry.
Now it's my turn to talk.

Monday, July 30, 2012

And then there's the question of salary...

When it comes to negotiating compensation packages, the process can range from smooth to painful.  Most times, overall satisfaction is achieved. But in some cases, disagreements about a very small (as a percentage of total) amount of salary can result in one party feeling slightly more wealthy at the end of the process, with the other party feeling somewhat disgruntled.  Starting out on the right foot now requires a pair of crutches. 

It is true that reasonable minds generally prevail, except in the City of Chicago and the State of Illinois.  But, if you are hiring, what is reasonable when you are trying to attract the best talent?  If you are a job candidate, what is reasonable pay for someone at your level?  Here are some things to consider:

What should a candidate accept:

While seeking a controller for a small manufacturing company a few years back, I came across a candidate who had perfect experience, all the required credentials, lived in the general proximity of the client’s small town location, and was unemployed.  Great, I thought.  Job done! 

Unfortunately, the candidate had gained her experience at some larger companies which had paid much more generously than my small client could afford to pay.  She told me, “I won’t even consider that …I’ve been making $$$$$.”  Of course she had not made $$$$$ for the six months she had been unemployed, she had not yet found a comparable new job, and we were in the midst of the “great” recession, but who was I to say?

I kept on searching and found another ideal candidate who was happy with the salary being offered.  And I do not know where my highly paid candidate landed. 

If you are looking for a job, keep in mind that your current position is your current position.  If you do not have a position right now, "Unemployed" is your current position.  Here are some general salary negotiating guidelines for the employed and the unemployed:

¾    If you are happily employed, you may want to negotiate a significant raise before you leave the comfort and stability (?) of the position you know.

¾    If you are unhappily employed, you may be willing to take a lesser raise or no raise at all just to get out of the hell-hole.

¾     If you are not employed, you are not employed.  During this recession, many professionals have been forced to accept decreases in pay.  I suggest that you negotiate every offer very carefully.

 What should an employer offer?

If you are an employer hoping to make a successful hire, start by realistically assessing the pros and cons of your position in order to determine the kind of salary you need to offer.

If you are in a large metro area like Chicago, it should be easy to determine a reasonable salary for a position by performing a little research.  Contact a headhunter; do some networking; make a few phone calls; study internet job posting sites for comparable positions in your locale.

If you are in a small town 60 miles from the next small town and the average yearly temperature is 28 degrees, it might be a little harder to figure out what you need to pay to attract a good employee, but my guess is it will cost you a little more. 

Similarly if you are looking for a combination CPA/MBA/MD, you might have to pay more.

A general rule is:  the fewer people who are qualified for and/or would accept a position, the more you will have to pay.  Any negatives regarding job content, title, geographic location, office appearance, financial circumstances of the company, etc. may require a corresponding positive in the way of compensation.

Listen and Learn

By the time I have made a week’s worth of recruiting phone calls on a position, I can tell a client whether his salary range is realistic. If I have been told by a dozen prospective candidates that the job is interesting, but the salary is unacceptable – chances are the salary is, in fact, unacceptable.  Some clients believe that if I work hard enough, I can find someone who will take the lower salary – that is not always true.  You can’t buy a steak for the price of a hamburger.  If you do, plan on lots of ketchup.

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