More Money: What to ask for in a talent shortage
In the November 14, 2017 Ask The Headhunter Newsletter, an employer makes a lousy job offer and a job seeker misses the point: Ask for more money.
After three interviews that included a lengthy presentation on how I would do the job, I was made an offer for a director-level position in a major city. I expected the salary to be upwards of $70,000. My current salary is $63,000. I also get good health benefits that cost me nothing out of pocket.
I was stunned when the offer came at $45,000, and I’d have to pay for health insurance. I literally cried. I am 33, 11 years out of college, and my resume rocks. Do they think I’m stupid? Are employers really so clueless? In this booming metro area, new grads get $45,000 for entry-level jobs. What they offered seems like a joke!
Should I even try to negotiate for an additional $20,000 to $30,000?
Part of me wants to tell them to screw off. The problem is that this director-level job sounds really great. But I would lose my apartment because average rents in the area are $1,800 a month. I couldn’t afford it, and I wouldn’t have enough for gas or food. Maybe they think I live with my parents?
Where do they get off offering entry-level pay for a director role to someone with 11 years experience? Any advice? My family, my friends and I are in shock. Help!
Employers complain there’s a talent and skills shortage, and that good workers are hard to find. But wages are not going up enough to reflect such claims.
Greedy employers and the talent shortage
I think it’s clear employers are doing three things:
- They’re bargain hunting.
- They’re keeping more of their profits while productivity is increasing.
- They’re avoiding sharing profits in the form of higher pay for hard-to-find employees.
What does this tell us? If you’re a talented, hard-to-find worker talking to a company that’s facing a talent shortage, you should ask for more money because you can.
In July 2017, the Economic Policy Institute (EPI) reported that “CEOs of America’s 350 largest firms made an average of… 271 times more than a typical worker in 2016.” (In 1965, the compensation difference was 20X.)
If you don’t think there’s any error in the offer you received, then consider that it may be how the company operates. It’s greedy. So ask for a higher job offer.
Don’t contribute to the problem
Now I’ll reprimand you. I imagine you did not ask the salary range on the job before you invested your time inteviewing. That’s a huge mistake. Make sure you and the employer are on the same page from the start. When job applicants fail to test a salary range before interviewing, their wishful thinking contributes to wasting time. On the other hand, if you tried to assess the salary range and the employer declined to tell you what it is, see The employer is hiding the salary.
I give you a lot of credit for using the interviews to demonstrate how you’d do the job. (See The Basics.) That’s how to interview, and I’m guessing that’s why they chose you! But the salary offer is another issue.
I’m concerned that you are already rationalizing taking a job for half what you think it’s worth because “this director-level job sounds really great.”
Really? Many employers try to substitute impressive job titles for fair salaries. They count on candidates talking themselves into an undesirable deal.
The problem now is that you may be confusing monetary compensation with the lure of a fancy job title. I’ll give you the benefit of the doubt and assume this really is a director-level role. Please be careful not to sell yourself short during a talent shortage. A title is not compensation for doing a job.
Accept the job and ask for more money
Learn from those highly paid CEOs. The EPI report notes that: “CEO compensation has grown far faster than that of other very high earners in the top 0.1 percent…” Why? EPI concludes it’s because of
“the power of CEOs to extract concessions.”
Pay attention! CEOs make big demands because companies perceive that there’s a shortage of great CEOs. You can play this game, too, if you have the nerve.
If you are ready to walk away from that job offer, then you have power because you have nothing to lose. So do not say “No” to the employer. Drive them nuts instead. (They deserve to have their cage rattled for playing salary games with you.) Treat them like desirable CEO candidates treat them. Accept the job, but extract concessions on the pay.
That’s right: If you still really want the job, why not try to get it on your terms? I’d accept the job, but I’d change the terms. You’re allowed to change anything you want in their offer before you accept it completely. Then it’s up to them to decide whether to agree.
How to Say It:
“I showed you I could do the job profitably for you, and I’m glad you were impressed enough to want to hire me. I want the job and I’d love to work with you! So I accept the job. But I cannot accept the terms you have offered. I’m ready to start work [tomorrow, or whatever day you choose] at $72,000. I will leave it up to you.”
Let the employer decide
Do not say anything more. (This is difficult, but keep your mouth closed past this point until they answer.) They already know all the reasons they want to hire you. Now let them consider whether they are willing to pay to get what they need, or whether they’re willing to lose you. (It can be a very long way to the next great candidate in a talent shorage!)
They will probably say no. But when they realize you’re really ready to walk away, it’s now on them to make a decision. They may come back with a better offer.
If they don’t, and you really are looking for a $70,000 job, politely tell them the following.
How to Say It:
“I am worth upwards of $70,000 in today’s market, where employers are complaining about a talent and skills shortage. I’ve found that your competitors are determined to hire hard-to-find talent and to pay what I’m worth. I wish you the best – it was wonderful to meet you and to learn all about your company.”
You don’t owe them any explanations at this point, so don’t let them drag you into a debate. Remember: They’ve already settled the main question: They want you. Now they must decide whether to accept your terms. If they press back, decide in advance whether you’re comfortable saying the following — then say it and stick to it:
How to Say It:
“I’m ready to take this job because I want to work with you. But my salary terms are not negotiable.”
Note that you have not rejected ther offer. In fact, you made a commitment when you accepted the job. Now let the employer decide whether it accepts your terms.
“I want more money.”
If you think you’re worth it, let an employer know you want more — and say how much. Just keep in mind that if they accept your revised salary, it’s not appropriate to negotiate anything else. You already said you’ll take the job if they meet your terms. If there are other things you want to negotiate, do that before you take a stand on the compensation.
For every employer that pays its CEO more than 200X what it pays the lowest-level employee, there needs to be a job candidate who is smart enough to insist on sharing that kind of wealth and success. The CEO is just another employee.
When they need you, extract concessions
You ask how such employers “get off offering entry-level pay for a director role to someone with 11 years experience.” Don’t over-think this. They do it because they think they can get away with it. That’s also why CEO candidates demand more money.
When is the last time you accepted “Because I said so” as the justification for why someone wanted to take advantage of you?
I’m not suggesting that you should be greedy and expect more salary than a job is worth. But if you’ve come to a reasonable conclusion that this employer is being greedy, and you think you can get a good job that pays $70,000 or more, you should not waste your time considering an unsatisfactory deal. Do not waste time negotiating. Instead, extract concessions or move on.
Look – if you need to pay the bills, and you need a paycheck of any size, I’m the last person to criticize you for talking yourself into a lower salary. Do what you must to live. But if you feel as strongly as you suggest you do, don’t fall victim to a greedy company that’s bargain hunting.
On to the next!
Do you know when to ask for more money? When you know you’re going to walk away anyway, don’t say “No” to a low job offer. Say “Yes, if you’ll pay me what I want.” Have you ever drawn a line like this?