The Perils of Personal Research

It's not unusual in the recruiting process for a candidate to balk at the company's initial offer.  Sometimes in their push back they might say that, having conducted a bit of "research" they feel that their personal value, or perhaps the company's job pricing, should be greater than what is on the table.

How should a Manager respond?

Back in the day, before the advent of the worldwideweb companies were seldom challenged over how they priced their jobs.  The perceived value of a candidate's background and experience might be negotiated, and often was, but not the internal value of the position itself.  These days the wealth of information available via the internet offers interested parties an opportunity to attempt their own investigation, to analyze what a company's job is supposedly worth in the real world.

What do you say when a candidate tells you that your $70,000 job should be priced at $80,000?

What a Manager Should Know

If you haven't been hit with this scenario yet, consider yourself lucky.  But it will happen.  The challenge could even come from an existing employee, one who feels that they are being undervalued for their responsibilities.

So how good is that "research" you've been told about?  Can you take it to the bank, or should it go to the garbage pile instead?  First of all, the online data sources most often quoted are frequently criticized as unreliable (inaccurate), and are seldom used by compensation professionals to base their program recommendations.  These sources often use data provided by the employees themselves, and without adequate filters to assure proper job matches.  Data collection techniques are often challenged by the critics.

Several referenced sources tend to be self-serving, especially those sponsored by firms tied to the staffing industry.  Reporting higher salaries would benefit them in the form of higher fees.

These sources are also convenient and inexpensive, another reason for their popularity.  But quality costs; you get what you pay for.  Here you get straight arithmetic, plain and simple.  The data cannot know the internal importance of a specific job within an organization.  It cannot interpret, cannot assign subjective values the way company decision-makers do when assigning a grade among peers, among like valued jobs.  Thus it is easy to miss the mark by not understanding the company's job in terms of true market comparators.

So How Should the Manager Respond?

When the time comes and you're exposed to this under-priced research tactic, step with care.  Your willingness to debate the issue hands at least a partial victory to the challenger, who will no doubt boast far and wide about their successful "strategy."  So if you engage, be prepared for more of this as word spreads.  Don't be put on the defensive.

You might consider several possible reactions.

• I didn't hear you: As suggested above, you could ignore the gambit, refusing to engage in speculation, as discussing the matter gives a degree of credence to the challenger's viewpoint.  Simply state your confidence that the job has been properly priced - then drop it.

• The push back: You could ask the candidate or employee what their professional credentials are for such research, as your company pays good money for compensation pros to keep you abreast of the market

• Push back II: You could challenge the "research," but that of course gives more credence to the point being made.  Likely you will not win the argument, as whatever you say would be viewed with skepticism.

• I'll pass:You could skirt the issue and refer to HR, saying that you'll "have them take a look."  this fools no one, but it does give you the opportunity to move the conversation in a different direction.  Note: this will not work with an external candidate trying to negotiate.

Your reality is that the company has already determined the value of the subject job, and will not welcome outside second opinions.  The job will have a grade, salary range and a midpoint - none of which will be changed because someone claims to have done a better job of "researching" how it should be valued.

I'd recommend the "I didn't hear you" response, and be firm.

Btw, managers and executives have asked me which sources should they use to research the market value of the job they're interviewing for.  They're planning tactics for reacting to an employment offer.

Do they really think that the company is going to listen?

I tell them, "don't do it."

Chuck Csizmar CCP is founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations.  He is also associated with several HR Consulting firms as a contributing consultant.  With over 30 years Rewards experience Chuck is a broad based subject matter expert with a specialty in international and expatriate compensation.  He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a brood of cats. 

Image: Creative Commons photo by dbking

Comments

[E. James (Jim) Brennan]

Kudos for a timely summary of classic realities about the differences between internal equity and external market competitiveness. Both are relatively subjective, because no two enterprises pay exactly the same for any job and external peer groups can be redefined to produce any number you want. There is no one absolute right number. While an employee's opinion may be offered, it does not determine management's view of the value HERE.

I also might suggest asking the agitator/negotiator, "who relies on data from that source?, because we use sources acceptable in federal courts, endorsed and followed by thousands of our competitors, acceptable to our management/shareholders, etc." Anything can be claimed (and is). It is important to note that the variations between actual employer pay and the rates reported from specific sources range from 82.6% (generally from nonprofits) to 181% of the accurate norm (see p. 4 of the ERI Update Newsletter of April 2009).

[Jared Hooste]

This is horrible advice. A candidate has every right to ask for more money and benefits. It is a negotiation, and as such the more information you have the better negotiator you can be. My current company low-balled me with their first offer. I rejected their first offer and countered by asking for more salary, more days off, and other benefits. I didn't get any extra benefits, but I did receive a sizable increase in my initial salary. In addition, because raises are generally percentage increases on your current salary, it is best to come in as high as you can.
If the hiring manager would have blown me off and said I didn't hear you, I would have repeated myself until he/she did. Also, I would not be work for someone that brushed my thoughts and feelings to the side. That would just be a sign of things to come.

[Chuck Csizmar]

The point being made here in no way suggests that a candidate can't or shouldn't negotiate for whatever they can get from the employer. Go for it and good luck to you! But if you're going to quote your "research" and tell the company you know better than they do about the value of a job in their organization, you might as well just shoot yourself in the foot!

Negotiate through your value, your experience and the contribution you can make to the employer. That is your worth to them. But if you're a brain surgeon and all they need is someone to apply band-aids, don't argue that they should pay you because you're a brain surgeon.

[Bill]

I agree. Very poor advice. Works well if you are dealing with 12-year olds, perhaps, but not too effective with adults. Would be perceived as being dismissive and demeaning, by most people. Makes a bad first impression of the company with very people you want to hire (company is filled with a bunch of arrogant, close minded types).

Other people have valid points and you'd be well advised to listen to them rather than pretending that you didn't hear what they said because you think they are not as smart as you are. You might actually learn something and hire some people in the process who do their homework and intelligently desire to discuss important subjects.

[Rachel]

There's a certain heavy-handedness in this advice that would not play well in this day and age. On the plus side, I can see it working well if you were recruiting KGB operatives for the USSR and the year was 1953.

[Carly]

I believe that it is important for job applicants to do their homework and try to find out what a fair salary is for a position especially if they haven't changed jobs in a while or if they are relocating. For most people, the easiest way to do that is to try to gather as much info as they can from online sources (assuming they don't have direct access to compensation consultants such as Mr. Czisimar).

If jobseekers are offered something lower than what their research has told them is a fair salary, I do believe that they have every right to question the amount. Not every company hires compensation consultants. Plus, if they are replacing someone who has been in a position for a very long time, the company may not really have an idea of what the market rate is for that position. I think this might be especially true for smaller firms.

Even if a company has very valid reasons for pricing the position at a certain level and will not consider raising their offer, I do think that if the applicant asks for more money as a result of their own research, rather than just ignore them or dismiss them out of hand as is suggested here, the company could instead offer an explanation as to why they have priced the position as they have (perhaps the responsibilities are less, there are better benefits, they have researched the industry and have found that this is the going rate contrary to what is found on the internet, etc.). Such a response would be much more respectful in my opinion.

[oscar]

I do not agree with the advice. I'm ok with the applicant asking for more money, this generally takes courage and a lot of self-confidence. I have personal experience with this, I made what I thought was a fair offer and the applicant came back with a request for a higher salary. This caused me to evaluate (again) what the applicant was bringing to the table and their potential beyond the job they were interviewing for. In the end, I did offer a salary that was on the high end of the position range rather than the low. I'd rather have the applicant speak up about the salary rather than accept the job and be disgruntled from day one.

[Yancey the BasicEmployeeRights Advocate]

I believe this comment from Jared Hooste is extremely credible; "This is horrible advice. A candidate has every right to ask for more money and benefits. It is a negotiation, and as such the more information you have the better negotiator you can be. My current company low-balled me with their first offer."

Also this comment from Bill; "Makes a bad first impression of the company with very people you want to hire (company is filled with a bunch of arrogant, close minded types)."

Unfortunately, the outdated "At Will' employment environment has further devolved into what we see in this article. The notion that an employer should engage in a four pronged cat and mouse game involving compensation. This strategy draws into question the credibility and ethics of the potential employer. Businesses have long used a strategy of pressuring career seekers with questions such as, "What are your salary requirements?", "What is the minimum salary you will take?" without any indication what the position is worth to them.

Some will refuse to divulge what the job pays before the applicant commits to a precise dollar amount. Carly's comment;
"I believe that it is important for job applicants to do their homework and try to find out what a fair salary is for a position especially if they haven't changed jobs in a while or if they are relocating." is right on target for every job seeker and employee.

career seekers should educate themselves concerning every aspect of the employment experience and how the choices and decisions made will impact the success of failure of the experience.

[E James (Jim) Brennan]

Our profession is in trouble. Most of the comments above are compeletly off-target and off-topic, ignoring the actual article content and criticizing things never said. The actual article stated that while personal salary value could always be negotiated, challenges to the enterprise's internal value of the position itself are a completely different matter.

Chuck wrote about disagreements with the enterprise's determination of JOB VALUE, not about a new recruit's expected negotiation re their PERSONAL value, which is perfectly fine, totally routine and quite proper. Telling the organization that it has no right to establish its own value for the job is something else. That's what the article addressed.

People who can't understand what they read should hesitate before displaying their confusion in a documented forum. Let's hope that in the future, they will focus their research efforts on facts rather than careen off into more satisfying, if irrelevant, straw man arguments. It muddies the water, makes us all look bad and will rebound negatively big time if you make slips like these in court cases where the opposition will tear you to shreds if you similarly mischaracterize documented evidence.

[Gloria]

Yes, it is a sad day for the profession when people are given a platform to give questionable advice to the unsuspecting.

[Sandrine Bardot]

There is a difference between the job value and the personal value (real or perceived) of an employee on the market, be it internal to the company or external during interviews.

The points in article explaining where the personal research is leading to in terms of the quality and accuracy of the data are very valid.

Personal research is necessary, of course, for internal or external negotiations. However an employee must be aware that they should take the free info on the internet with a (big) pinch of salt.

Why do companies pay a lot of money for professional survey results ? Because that’s what they are : professional. Designed by specialists, submitted to many companies, using standardised comparison methods between the “jobs in the survey” and the “jobs at our company”, with massive quality insurance in the review of the data submitted by companies, and delivered with an unrivalled degree of analysis (by industry, location, company size, even seniority on the role and more factors), they lead to confidence in the quality of the results.

My view is that when an employee challenges this data internally, the manager should not engage in a debate with the employee. He/she should calmly explain which are the sources of information used by the company, along with the points I mentioned above, and reinforce their confidence in the job pricing result. When a candidate challenges this information during recruitment, the explanation should be the same.

Sometimes (rarely) a company used old data or misprices a job due to lack of information. Very quickly though, the point is addressed as recruitment becomes totally impossible, internal mobility is blocked, and all signals turn to red (from employees, candidates, managers, and HR business partners).

But to be honest, no company will change its market pricing because one employee or candidate finds it too low... because of course they will, as interests are not convergent on this topic... I have worked at companies paying on the 75% percentile (their employees paid higher than 75% of their peers on the job market), and employees still claimed that they were not paid adequately. It’s human, it’s normal, it’s expected.

However when it comes to PERSONAL value this is another topic entirely. This aspect is not covered in the article. When the employee challenges his/her pay on the basis of his/her personal value, they are in fact not referring to market data but to the skills and competencies they demonstrate in the workplace, their performance as assessed through the company performance evaluation system, as well as their commitment to the organisation (good will) and their potential for evolution.
When a candidate challenges the job offer they in fact refer to the value of their past experience, the freshness of their approach for the hiring organisation, the change they can help implement... In both cases, the negotiation does not cover what the market value is, but what that specific person can and does bring to a company.

It’s perfectly OK to negotiate on these points – but they are not the same as claiming that the job pricing performed by the company is wrong.

[Sandrine Bardot]

There is a difference between the job value and the personal value (real or perceived) of an employee on the market, be it internal to the company or external during interviews.

The points in article explaining where the personal research is leading to in terms of the quality and accuracy of the data are very valid.

Personal research is necessary, of course, for internal or external negotiations. However an employee must be aware that they should take the free info on the internet with a (big) pinch of salt.

Why do companies pay a lot of money for professional survey results ? Because that’s what they are : professional. Designed by specialists, submitted to many companies, using standardised comparison methods between the “jobs in the survey” and the “jobs at our company”, with massive quality insurance in the review of the data submitted by companies, and delivered with an unrivalled degree of analysis (by industry, location, company size, even seniority on the role and more factors), they lead to confidence in the quality of the results.

My view is that when an employee challenges this data internally, the manager should not engage in a debate with the employee. He/she should calmly explain which are the sources of information used by the company, along with the points I mentioned above, and reinforce their confidence in the job pricing result. When a candidate challenges this information during recruitment, the explanation should be the same.

Sometimes (rarely) a company used old data or misprices a job due to lack of information. Very quickly though, the point is addressed as recruitment becomes totally impossible, internal mobility is blocked, and all signals turn to red (from employees, candidates, managers, and HR business partners).

But to be honest, no company will change its market pricing because one employee or candidate finds it too low... because of course they will, as interests are not convergent on this topic... I have worked at companies paying on the 75% percentile (their employees paid higher than 75% of their peers on the job market), and employees still claimed that they were not paid adequately. It’s human, it’s normal, it’s expected.

However when it comes to PERSONAL value this is another topic entirely. This aspect is not covered in the article. When the employee challenges his/her pay on the basis of his/her personal value, they are in fact not referring to market data but to the skills and competencies they demonstrate in the workplace, their performance as assessed through the company performance evaluation system, as well as their commitment to the organisation (good will) and their potential for evolution.
When a candidate challenges the job offer they in fact refer to the value of their past experience, the freshness of their approach for the hiring organisation, the change they can help implement... In both cases, the negotiation does not cover what the market value is, but what that specific person can and does bring to a company.

It’s perfectly OK to negotiate on these points – but they are not the same as claiming that the job pricing performed by the company is wrong.