« Employment Cost Index vs Salary Structure Changes | Main | 3 Lessons on Knowing vs. Sharing, Leading, or Doing »

07/25/2014

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Your chart and comments resonate as quite sensible, Ann.

Made me think of the similar "conflict" between a ship's navigator and pilot, where one plots out the optimal preferred course but the steersman/woman must alter speed and direction according to the actual changing sea conditions. Compensation people can no more accurately prophesy the economic future next month than navigators can forecast the weather next month. Recruiters have their fingers on the pulse of the actual external market, which has no respect for internal pay policies.

Replacement time has always been an excellent indicator of necessary changes in entry rates. Messy, but life is that way.

This, of course, has nothing whatsoever to do with the fact that contingency recruiters are compensated on the basis of the first year total compensation of their placements; or, for that matter, of the availability of H 1-B visas.

Commissions have always been a reality affecting headhunter behaviors; no change seen there over these years. There are strict quotas on H 1-B permits (yes, they fluctuate from year to year per congressional action) but most are snapped up by employers within a week or so each year to be issued to their high-value alien imports whose pay must exceed the BLS OES survey high norm. Not that many H 1-Bs exist, so doubt they could affect national candidate hiring rates for all jobs.

The survey was done with outside recruiters, not internal company recruiters. Does this make a difference? Don't company recruiters have a better feel for hiring people at salaries that are appropriate for the company? Don't outside recruiters have a tendency to try for the a highest possible salary because it is linked to their fees?

Jim:

Agree and well said "recruiters have their fingers on the pulse of the actual external market, which has no respect for internal pay policies".

To Tony's and Herb's points - Yes, absolutely, outside recruiters have biases that likely impact any data collected and reported. I actually had a statement to that point in the post, but removed it. Probably should have left it in, but I thought it deserved longer treatment than I was willing to give it. All research completed by "outside advisors" is going to have inherent bias. Having been employed at and involved in at least one research release and write-up in my own "big firm" days, I can assure that the topic of firm revenue opportunity was absolutely on the table.

So, I don't deny the obvious possibility of influence here. Part of the reason I published this is because it captures what I have been hearing from my clients and their internal recruiters/HR staff -- especially in the area of tech jobs -- for the past year or two. Vetted by my own personal information sources, I thought the trend illustrated was a valid one.

Thanks all, as always, for the observations and comments.

I think we need to give our recruiters more credit here. Tech (STEM) salaries are climbing faster these days. Let's face it --the survey results we use in Comp become outdated very quickly. Most Comp people do not adjust pay structures other than annually. And let's admit that doing our "lead, lead-lag,lag" magic is less than accurate.

External recruiters (of any name) do get commissions. That doesn't mean they are all "on the take".

Most companies I know don't use expensive external recruiting firms except for management positions. So I think the best thing to do in working with our internal recruiters is to actually . . . work with them. Each side has a viewpoint. Working together they can figure out a way to make things work.

I wrote about this: http://www.compensationcafe.com/2013/08/hr-is-that-human-resources-or-holistic-resources.html

Thanks, Jacque. Excellent points and thanks for the reminder link to your post.

Ann - Interesting chart. I guess its a matter of perspective; one could say that its always been a candidate driven market, since top candidates have always been in demand. One could just as easily say that its always been an employer driven market, since those are the folks with the jobs.

If I were a betting man, I'd bet on the candidate driven scenario. Employers may create the jobs, but unless they offer the right attributes; culture, opportunity, flexibility, and pay, the best folks are going to go elsewhere.

I'd also opine that, in today's marketplace, any tension that exists between comp and internal (as opposed to contingency) recruitment is counterproductive and a waste of energy. At the end of the day both parties should want the same thing, and both need to step up to the hiring bar and figure out the parameters surrounding the job. As it goes in one of my favorite Rolling Stones songs: 'You can't always get what you want, but if you try sometimes, you'll get what you need . . '

John:

Love the Rolling Stones lyric reference - very apropos!

Thanks for the comment!

Compensation gurus have to alter their approach when competition for talent heats up and become engagement assets for their organizations. If they can not effectively package the total reward message/offer for a candidate, the top talent will go somewhere else under the assumption there is more for them there. There's no better defense for offering a comparatively low salary than showing how much more the candidate stands to gain in the entire reward package.

Chad:

Belated thanks for the comment - agree that we in the compensation field need to be responsible to the market for talent, so that we are not unnecessarily impeding the efforts to bring in the right people.

The comments to this entry are closed.