Just how little do I need to pay when I make a job offer?
I recently spoke to a class of graduating students on the topic of job offers and interviewing where I was asked a great question that I thought was worth sharing. The question was:
“How often is the hiring company trying to make a job offer for as low a salary as possible? How often does a company want to pay as little as possible for my skills?”
Great question, and one I would have never thought to ask. The short answer is,
“It is more the exception than the rule that companies are trying to cheat a candidate with a job offer.”
In my opinion, most companies want to make a job offer that includes a fair salary for the work and the skills you are providing. It is the exception when a company wants to cheat an employee. Now what you think you are worth and what the company thinks you are worth may be two very different numbers. But remember, I am comparing your number to 50 other candidate numbers for this position, and 20 positions before you this one, so I have some idea what this position is worth. Candidates rely on numbers from Salary.com or feel they were underpaid at their last job, and this is not a realistic baseline.
Just because you didn’t get a raise in the last few years, doesn’t mean you are underpaid. It could mean that the job market is flooded with candidates, the economy isn’t doing well, or a little bit of both.
When I gave my answer, I think I surprised most of the room. Most of the students were locked in the mindset that if the hiring company can save a few thousand dollars when making a job offer, it will. I understand this. It also makes sense that when hearing responses to the interview question “how much are you looking to get paid” I receive the most evasive, cagey, non-answers one could hear.
“I would rather wait till I learn more about the position until I give you my answer” or the classic, “I am more concerned about the entire package vs. just a salary. I would like to wait and hear what the benefits are worth before I give you my answer.” Both sound fair in theory, but at the end of the day, we are all worth what we are worth, and that number falls within a pretty narrow window.
Pssstt. . . For the record, the above are answers that make it awkward to continue the conversation. I asked an interview question and I didn’t get an answer.
This, of course, brought on the question “Why doesn’t the company give me the salary they are going to pay first? Why do I need to give my number to the hiring company? I will address this question in next weeks post.
So I explained the business logic behind my answer to the question “Does a company want to lowball me when offering me the job?
When I give an offer, I do not want to low-ball anyone. Of course, I don’t want to highball anyone, but I really do not want to low-ball anyone.
Why I don’t want to highball a job offer
Let’s say you are working at Beefy Burgers and the going rate of pay at Beefy Burgers for the role of French fry guy in your area is 9.00 an hour.
If you accept a job at Beefy Burgers as the French fry guy, of course, you would love to make $13.50 (50% increase over $9.00) an hour or even $18.00 (double the $9.00) an hour. But unless you can pump out 50% more fries or DOUBLE the number of fries than the guy next to you who is making 9.00 an hour than you are setting yourself up for failure. More importantly, the HR guy who offered you the position is setting YOU up for failure and I do not want to do that.
Why would McDonald’s want to pay you 18.00 an hour when you can only get the fry machine to pump out X amount of fries per hour? We cannot rush the fry machine. Fries take 3 minutes in the deep fryer and paying you 18.00 an hour doesn’t get BeefyBurgers anything. Beefy Burgers will look at you, look at the guy next to you getting 9.00 an hour and realize Beefy Burgers needs to sell a hell of a lot more fries to make up the additional 9.00 an hour after profits. You are going to get replaced before you can say “2 all beef patties special sauce lettuce cheese on a sesame seed bun” by another guy willing to take 9.00 and there are plenty of ‘THOSE guys” out there. The HR guy who offered you the position just set you up for failure and I do not want to do that.
Why I don’t want to Low Ball a job offer
I put a lot of effort into recruiting every person I make an offer to.
- I had to work with the hiring manager to create a job posting
- I had to pay $400.00 to Monster.com to post the position, and if I wanted to use Indeed or Ladders.com, that costs me more
- I had to sift through 100’s of resumes and whittle that pile down to 15 that looked like they had potential.
- I worked with the hiring manager AGAIN to figure out what 4 I am going to call for a phone interview.
- I needed to arrange schedules with these 4 candidates to have an initial phone call and then arrange schedules with 3 of these to meet with myself and hiring manager in person. This is a mini act of god.
- The hiring manager will then pick two of the candidates and I need to arrange interview schedules with the hiring team which could easily be 4 different interviews or more. This will take a Major act of GOD and a lot of luck. I cross my fingers and hope that no one cancels or the candidate doesn’t withdraw their application.
- If all goes well, I have the beginning of a job offer forming.
Giving you a low-ball offer and taking a chance that you will realize you are worth more than what your peers are making doing the same job will get the low-balled candidate pissed. If I really low-ball you, you may even think about the HR nightmare of nightmares. Going postal.
- Guess who deals with a pissed off candidates attitude?
- Guess who has to find someone to replace you when you quit in disgust?
- Guess who hears from the CEO when you post your dissatisfaction up on GlassDoor.com?
- If you do not quit, your pissy attitude will leech out to the rest of the employees because when someone thinks they are underpaid, they want to verify it and ask everyone else on the team.
If I give you a low-ball job offer, I run all kinds of risks:
- If you were making more money in the past, I run the risk of you only giving me a percentage of your best effort. If you were making 10.00 an hour in the past and I offer 8.00 an hour, I may get 100% during the honeymoon period of the new job, but will probably only get 80% effort moving forward. Your mentality will be that the low-ball pay is worth low-ball effort or low-ball attendance.
- As a manager, I don’t want to see 80% effort and I don’t want the rest of the team complaining to ME that Johnny is only putting in 80% effort. This is how the entire team’s production eventually goes to 80%. (Johnny isn’t making 10 widgets an hour, why should I?)
- The number 1 reason employees justify company theft is that they feel like they were underpaid and they were “owed” what they lifted from the company.
Guess who will be involved in every employee issue named above? Me, the HR guy.
So you see, low-balling a job offer has nothing but downside for the company and will ONLY create more work and heartache for me the HR guy. Saving the company a few thousand dollars a year just isn’t worth it at TOO many levels. With so many companies thinking about creating great work environments and making the “Best Place to Work” lists, low-ball job offers don’t make sense.
Before I leave you with these cheery thoughts, I want to clarify. Every company has a pay scale philosophy. Google’s philosophy is much different from a government agency’s pay philosophy, which is much different from a non-profit or a small private company. Google has enough money that their employees can wipe with hundy’s and when money is no object, you go with your strengths. Google’s philosophy is going to lean towards a mentality that pays top dollar for the top talent. A small startup will probably pay much less to the same Google candidate because they are not able to afford the Google philosophy, and a non-profit may pay even less for the same candidate.
As the HR guy, I have a philosophy on pay that I am going to do everything I can to stick to across all of the offers I push out the door. I want everyone in the company to feel good about their offer because if someone is treated inconsistently, then they will probably feel like they were cheated.
Your offer may feel low compared to other companies and other industries, but it should be a consistent offer within the hiring company for what you bring to the table, and that my friends is the secret of the low ball offer.
See you at the after party,
nasty: an unreal maneuver of incredible technique, something that is ridiculously good, tricky and manipulative but with a result that can’t help but be admired, a phrase used to describe someone who is good at something. e.g. “He has a nasty forkball”.