job offer

shhhhh, the recruiters secrets of the low ball job offer

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 job offer? 

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

Lets 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 amount 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 McDonalds 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 postion, 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 themself.
  • 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 dis satisfaction up on GlassDoor.com?
  • If you do not quit, your pissy attitude will leach 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 honey moon 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 teams 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 than a government agency’s pay philosophy, which is much different than 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 start up 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,

HRNasty

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 that is good at something. e.g.  “He has a nasty fork ball”.

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  • Postagilist

    The McDonalds Comparison is patently offensive and non germane to software engineering as an example.

    The rest seems self serving, like the leaches telling us how they really are a benefit and leaching takes so much time

  • Kim

    It would save a ton of time and effort for job seekers and employers if the job announcements just included a salary range. If that range is too low, people who won’t take it won’t apply, and the employer doesn’t get its heart set on someone it can’t afford while letting the second choice who can work within the range get taken by another company.

    • http://hrnasty.com/ HRNasty

      Kim, you make a great point, it would save a lot of time and hassle. What the company is trying to do is to find the perfect match. There are candidates who may be interested in taking a lower rate of pay not because they want to but because they are FORCED to because of the economy and their financial situation. Candidates that take lower offers are not happy in the long run and this is why it is important to the company to find out what the candidate is looking for. Hope this helps,

      HRN

  • Saif

    I once declined an offer from HR Manager offering 20% less than my ask. Next day, I got the call from the Hiring Manager upping the offer to my ask. What would you say to that?

    • Amy Ala

      Did you take the job? :) I really don’t know why that would happen. I can’t imagine seriously offering someone that much less, especially if there was budget to offer what you were asking.

    • http://hrnasty.com/ HRNasty

      Saif, sorry for the late response, took a vacation. Thanks for stopping by. I would say good for you and that it isn’t the way I want to do business. I realize that HR folks work with what they have, but trust me, no HR person wants to work this way. They may be forced to, but it isn’t their first choice. FWIW, Mrs. HRNasty has been lowballed a couple of times and I suggested she NOT to take it. (Thankfully, she was in a position to have the option to decline, and I realize not everyone is) Sure enough, the company came back with a higher offer. But again, is this a company that you want to work for? You are always going to be suspicious of everything the company offers you moving forward. Which is why this is NOT the way I want to operate.

      Appreciate the great perspective!

      HRN

  • anilkups

    Hi HR Nasty,
    I have been unable to read your posts on feedly. I was earlier able to read it on feedly. Have you changed the settings? Or, do you want me to read only on your website? ;)

    • http://hrnasty.com/ HRNasty

      Anilkups,
      Sorry for my delay in replying. I was on vacation. Thanks for the heads up! I haven’t changed any settings. Are you using RSS? FeedBurner? I will double check and then check in with you on Friday if you don’t mind. I plan to post this Thursday. Happy to send you a t shirt or Vinyl decal for your trouble. Thank you again for the heads up!

  • Pingback: First job offer, Why you should accept and not negotiate

  • Amy Ala

    The more I read this the more I love it. :) Such a great and necessary post. I’ve been thinking about tackling a salary discussion post myself and this has, once again, inspired me Mr. Nasty! Thanks so much for shining a light on such an important topic.

    • http://hrnasty.com/ HRNasty

      Inspired? You are the muse here @alarecruiter. Yes, please do post something because I think that when candidates go into an interview with the mentality that they are going to be cheated or are not trusting. . . the hiring company will sense this. Who wants to hire a candidate that doesn’t trust the hiring company from day 1? Thanks for the support as always!

  • Whiskey Tango Foxtrot

    Great post as per usual, Nasty. Many hiring organizations and managers should take note and adopt your philosophy about salary and job offers. The ideal offer will always be at the intersection of what the candidate wants and what the market/hiring organization will bear. It’s in everyone’s best interests to find and meet that optimal number so that the opportunity is compelling all around. Any candidate that requires compensation above market had better be prepared to justify the premium. The magic of building the right offer requires that both employer and candidate know what the going market rate is for a similar candidate and understand the risks of going over/under said rate. And as Nasty as highlighted, the risks are great when you lowball an offer.

    • http://hrnasty.com/ HRNasty

      WTF! Thanks for stopping by and the support. Coming from a professional executive recruiter, this means something. You are absolutely right. If a candidate requires a premium salary, they better be prepared to deliver premium results long term, or both candidate and hiring company lose. Thank you!

  • gander2112

    Good post, and I believe your responses.

    But, I have to disagree that there isn’t a concerted effort to reduce the range of pay across the board. My last job, when I was seeking candidates, the pay scales and the expected deliverables were severely mismatched. They wanted to pay sub what a brand new to the role (product manager or product marketing engineer) person would expect to make, yet be able to attract very senior people. Needless to say, I got dinged because I couldn’t find qualified people at 80K who were used to making $130K.

    I doubt that this is an isolated experience, because I have seen it pretty consistently since 2007 (at the first whiff of the economic meltdown), and the company I worked for then pounced to not just reduce what new people were paid, but actually lowered salaries on people already there. Not temporary, permanent reductions.

    Not surprisingly, when the economy began to pick up, a mass exodus happened, but I suspect they cheered with glee and lowered their pay scale even more.

    Sorry for the rant.

    • Larry McKeogh

      Everybody wants as much as they can get without having to pay full price for it. You want it in laundry detergent, a car, why not a new employee as well. Especially when you hear how much talent is on the street. (supply v. demand) As mentioned in the past eventually some of them have to eat and they will take the 80K position. I know from first hand experience.

      The thing is, if that is the corporate culture and it really is a cultural thing, you don’t want to work there. The penny wise – pound foolish mentality will challenge you every time you turn around. These are the companies that are sitting in place or going backwards while the competition is leaving them behind.

      One great quote that I always keep in mind regarding a capital expenditures by Henry Ford is – “If you need a machine and don’t buy it, then you will ultimately find that you have paid for it and don’t have it.” I think a similar mentality could be applied to OPEX costs, especially when the 80K knowledge worker takes their knowledge somewhere else. This goes to the breakdown of the longer term view and implicit contract in business. It’s the new norm and we’ve got to adjust or die.