Employees aka Employers’ Customers

iStock_000016323356SmallAlthough we do not think of ourselves as customers of our employers and their jobs, we are. Government agencies, companies, and non-profit organizations create jobs and end jobs. We do not control those factors yet when it comes to filling a job the burden suddenly lies on us, the individual candidates, to create individual “pricing” for ourselves while it is actually the job that has market value. Typically the first salary offer is based on our previous pay and how we responded to the “desired salary” question. That’s individual pricing.

I know, it’s a different way to look at the hiring process but let’s face it candidates are not in control. Employers are in control. They decide when to create new job openings and when to shrink the number of jobs. The government covets these jobs. Local, state, and federal government offer great incentives to employers to ensure a presence in their neighborhood and to hire their citizens. These incentives are in tax breaks. They are offered because getting more citizens hired will create even more money through income tax, sales tax (when we are employed we buy more), and through property tax (when we are employed well we buy homes). All are the fuel that keeps government agencies running. Also, the more employed, the less government services we use which saves the government even more money.

So it is not little ol’ you and me who are selling to employers the need for a new employee. It is the employers selling their job openings to little ol’ you and me. With the hangover from the recent recession it is easy to forget that employers need to sell themselves to good candidates.   And of course, you are a great candidate and an even better consumer.

Women are amazing customers. We make more than 80% of all purchasing decisions. 80%! And we are educated about these decisions. 83% of consumers research online before making an electronics purchasing decision. On average all customers visit three websites before buying. We probably should spend the same effort into understanding the price (salary and benefits) a job should have as we do comparing the price of gas, a cell phone, a car, or a house. Understanding this can mean an increase of 10% or greater in pay resulting in thousands of dollars per year to you plus the increase in 401K contributions potential, social security contributions, and everything else that are based on your pay.

You already know how to compare pricing and you are damn good at it. There are online sites, mobile apps, professional and trade associations, and headhunters to help understand the price (salary and benefits) of your job.  Now it’s time to start researching job pay just like the price of any purchase.

It’s Not Our Job to Pay for the Sins of Your Past Employer

Seven dealdy sins signpost“The most you should expect is an increase in pay of 25%. That’s the max and it’s pretty standard.” said a headhunter to a woman looking to leave a company that was notorious for underpaying their employees. An increase of 25% would not even get her to what she should have been making at her current job. Accepting a new job at 25% increase would keep her pay far under the current going rate for her next job.

As the headhunter explained, “you can’t expect your new employer to pay for the sins of your former employer.”   No one was asking this yet it seems to be a common rallying call. How is paying the current market rate for a job an extra burden to an employer? It is not.

Yet, she was not asking for the new employer to go back in time a la the Delorean with a flux capacitor in Back to the Future and pay her the 30% under market she was making for 3 years. That money was lost. Somehow, though getting pay at the current going rate for a job would be a penalty for the new employer since the standard is to add 10% – 25% of a person’s previous pay regardless of where it lands you in the market.

This is the embedded discrimination that lives under the guise of a hiring best practice. Once a person accepts a job for low pay whether discriminatory or not that person is forever punished.  I argue that the continuation of under payment is a form of discrimination. Luckily, I don’t have to make this argument on my own. The courts agree. Specifically in the Glen v. General Motors (11th Circuit) ruling the court found that previous pay is not a legitimate business reason to have pay disparity.

According to data from the US Dept. of Labor, women and people of color make less than white men. Women working full-time typically earn 23% less than men working full-time. African American men typically are paid 22% less than white men. Latino men typically make 28% less than white men. The maximum of 25% increase for changing jobs in all cases keep these demographics from earning the market value of the new job.

As a new employer you may couch it as not paying for the sins of former employers but by using past pay and limiting future pay to a certain percentage increase then you, the new employers, are actually piling on to the sins of former employers.

A Job You Love for the Pay it is Worth

Find something you love to do and you will never work a day in your life.  That saying is a goal of many working people; me included.  Unfortunately,  many people I encounter as a salary negotiation teacher put so much focus on finding something that they love that they forget to make sure their pay is appropriate for the job.  The following video discusses how the intersection of the two truly is a better goal.

5 Reasons Women Do Not Negotiate Their Salary

iStock_000008817530XSmallTomorrow, April 9th, is Equal Pay Day.  As readers of my blog well know, I believe that it is imperative for every woman to actively become involved in her income decision by negotiating her pay.  This step is essential if we are ever to achieve true Equal Pay.  I come across many reasons why women decide not to negotiate their income.  Here are the top reasons and why these reasons should not hold someone back.

I Don’t Work for the Money

Sure women may be out to save the world by working as doctors, nurses, teachers, and in non-profits.  Before anyone got to the decision of what kind of work to do came the realization that one needs to have a job to have a roof over head, food on the table, and the occasional mani/pedi treat.  It’s so elemental a reality that most of us forget about it.  You truly are NOT working for the money if you can honestly answer yes to the following questions:

  1. I (and my spouse) have saved enough to cover 6 months of living costs should I lose my job, get sick, or other emergency occur.
  2. I (and my spouse) have saved enough to put each of my (our) children through college for four years.
  3. I (and my spouse) have saved enough to live in retirement for 20+ years
  4. I (and my children) can live on my savings should my spouse no longer be part of the family unit through divorce or death.

My guess is very few of you can answer yes to all of the above (me included) since the average savings Americans have is $3,800.

I Thought Pay was Based on Ability

The decision to hire and promote a person is based on ability. The decision on the amount to pay someone is typically based on the lowest amount of pay that candidate will accept.  I know it’s a rude awakening for most people yet the discovery opens so much opportunity.  People can decide what they will and will not accept.  Realizing your manager is looking to get the best for the lowest pay enables you to jump into the negotiation game.  Think this might not be the reality where you work then why did they ask you for your salary history or desired salary?  That’s how hiring managers and human resources start to gauge an acceptable offer.

I Am Replaceable

Everyone is replaceable just ask Pope Benedict.  Salary negotiation would not exist if we all waited until we were irreplaceable.  You may be replaceable but you are valuable.   The minute you resign, get laid off, or get fired, the company will figure a way to work without you.  Until then, don’t forget to remind them of the value you bring and whenever possible do it in terms of the company’s financial gains.

I Did Not Know Negotiating Salary Was Part of the Process

We write resumes, practice interviews, buy interview outfits, clean up our social media footprint, and write thank you notes for interviews.   Somehow many believe the job offer is the end of the process.  No, the process now moves the decision making to the candidate.  My negotiation professor grad school taught us that the moment between job offer and acceptance are the most powerful for any candidate.   Don’t throw away the power by accepting the job without negotiation.

Review the offer, negotiate, and finally decide on the revised negotiated offer.   You’ll know you have the best offer in front of you after you negotiate the first offer.

I Do Not Know How to Negotiate

Negotiating is a skillset that we all need to add to our portfolio.  There are many ways to learn the negotiating including books, blogs, classes, and coaching.  The key here is to decide to learn regardless of the method.  You are 80% of the way to successfully negotiating pay that is on par with the men by making the decision to learn.