AUGUST 19, 2024

Salary Negotiations In This Mis-Aligned Hiring Market

Are you seeing what I’m seeing in the hiring market?

Employers are inflating titles to attract new hires. Then employees with titles above their experience are either demanding commiserate salaries or taking their shiny new big titles and finding another job months later. It’s a mess.

Here’s a post on handling salary negotiations in this mis-aligned hiring market.

As people move through the interview process, there comes a point where they have an expectation of what they believe they’re worth.

Some who were given an inflated title (simply because their new employer is desperate to hire) think to themselves: “Hey, I’ve got a VP title now, so let me research what other VPs earn. Oh, VPs in my industry are making $50,000 more than I do, so I “deserve” that salary.”

What they don’t realize is that it’s the experience, the ability to do the job, not the title that makes someone deserving of the higher salary.

This isn’t a post in favor of employers over employees, or employees over employers. I’ve got some advice for both in this crazy, mixed up hiring market.

Negotiation Advice For Employees

Of course, you should advocate for yourself whenever possible, but what I’m seeing in the market now isn’t reasonable.

I think it’s important to remind people who don’t have the experience, but who have been given an inflated title, to remember that when someone has 15 years of experience, the value they bring is different than someone with 0-2 years under their belt.

Warren Buffett said, “Price is what you pay. Value is what you get.”

Beware of getting yourself into a position beyond your capacity. It will frustrate your employer, your team, and most of all yourself.

Please, take the time to really consider the requirements of the job and take on a job that’s no more than one level above your current abilities.

Learn. Gain experience. Grow into the bigger jobs. Don’t set yourself up for failure.

Negotiation Advice For Employers

Employers should know that if you’re going to offer an inflated title to an inexperienced employee, you can expect them to want the inflated salary. It’s human nature.

Be prepared for the conversation, and don’t blame “the younger generation.” You’re contributing to the situation.

And don’t be surprised if your newly-hired employee with an inflated title doesn’t up and leave for money to match the title. This market is rewarding this behavior.

I coach employers to speak about the total compensation package. You have a base salary, but have you added in the value of vacation days?

What about educational reimbursement?

401k?

What about the number of holidays that we are now giving people off that others don’t?

Is there parental or caregiver leave?

How long is the introductory period (what used to be called the probationary period)?

Do your employees come into their benefits immediately, or do they have to accrue vacation?

All of these things paint the total compensation picture, and I would encourage employers to place a dollar amount around each and every item because you want to make it easy for people to see the benefits of staying. This calculation is different if they’re single, have a family, or are caring for an elderly parent or young children.

Give them a range if needed, so they can see the total value of their compensation, not just the base salary.

In addition, I think it’s important to have a conversation with your employees about the intangibles of working at your organization.

If an employee with an inflated title comes back to you three months after being hired saying, “This other employer will give me 20% more,” it’s perfectly acceptable to remind them of your path to advancement, or how you’re investing in them, where they are now in their career, so they build the skills to be able to handle higher-level responsibilities.

Even if you’re with a small organization and don’t have these benefits and intangibles, you can be frank (and caring) and say something like, “From my perspective, the last thing I would want is to be put into a position that I’m not ready for, because that’s just setting me up to fail. And we will not set you up to fail here. We will support you and help you become a better leader.”

Keep it real.

If you’re challenged by the current hiring market, check out our Recruiting Services.Recruiting Services.