A Rolls Royce costs more than a VW, especially if it’s got a flat. There’s a good reason for that. The entire driving experience is poles apart. Similarly, if you’re considering candidates, well, the range of talent will be apparent when you evaluate resumes and conduct interviews. Too often, it all comes down to compensation.
Every firm wants to spend as little as possible on their employees. They hope they can identify a diamond in the rough, preferably without the assistance of a recruiter, and pay pittance. Sometimes that works. Most of the time, it doesn’t. Why? Because a Rolls Royce costs more than a VW.
When new hires are paid poorly a few things can happen, some rather quickly. One, they take calls/read messages from recruiters and scour the Internet for opportunities. Two, they resent their low compensation and, thus, are less inclined to work hard. Three, they don’t want to listen. Four, they spend time complaining about their compensation, which negatively impacts their productivity. Five, they have a lousy influence on those around them.
So, while the hiring manager may feel smug for saving money, they might not have acted in their own best interest. Hiring managers need to be honest about why they would want to hire the equivalent of a VW. Do they think that choosing someone who isn’t high caliber, and a bargain, will make them look smarter or more capable? Unwise. Could they really depend upon that individual? Unlikely. Will that person genuinely be an effective contributor? Probably not. Sometimes, if a person isn’t asking for a lot of money, it’s because a) they’ve not been paid much historically and b) they’re not great contributors. Why would a hiring manager feel it’s OK to add someone to the team who isn’t the equivalent of a Rolls Royce? Or at least, a Porsche?
When conducting a search, first the hiring manager should examine what other members of the team are earning. Second, some will contact colleagues at other shops to ask what they’re paying their staff. By looking at various candidates’ resumes and their compensation expectations, a hiring manager can get a sense of what the market is at that precise moment. Bear in mind that some candidates may ask for more than they’re willing to accept. I’m not suggesting that one not respect what they’re requesting. Rather, I believe that it can be reasonable to offer a bit less. The candidate has the option to decline. Both the hiring firm and the candidate should be willing to negotiate a bit, ideally in a respectful fashion.
But if the hiring manager determines that a particular candidate stands apart, unquestionably head and shoulders over the rest, it can be worth it to pay what’s sought. However, there’s a risk. Sometimes, if what’s being asked is significantly higher than what others at the firm are earning, the newly hired employee may not stick around. For example, someone was hired who earned a lot more than others at a firm. The firm paid up initially and the new hire lasted about 18 months. Here’s an explanation. On the rare occasion that an expensive candidate is hired, he’s usually broken the compensation ceiling when first hired. This usually means, even if he’s amazing, that he never sees much more in compensation. Plus, if you’re the most expensive hire, you’re probably not at the right firm. The reason: you may well be of a caliber that’s incompatible with the team.
To determine if the candidate really is going to be pleased with what’s offered, ideally, multiple conversations are held and candor is encouraged. That doesn’t mean anyone will be candid. Still, it’s worth the effort.
If the hiring manager has identified their top pick, well, that candidate, if they’re really worth hiring, needs to be compensated appropriately. Making them a lousy offer will either result in them declining the job and/or feeling like their time has been wasted. On one occasion, a hiring firm presented a ridiculously low offer. The candidate was almost embarrassed for the firm. She declined the offer and felt as though the experience of interviewing had been a nuisance. In short, the candidate felt disrespected. Firms should pay up if they want to attract talent. What you’d pay for a Rolls Royce is very different from what you’d offer for a VW.