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.

Women: Victims, Perpetrators, and Heroes of the Gender Pay Gap

Super BusinesswomanThe common misconception of the gender pay gap is that blatant discrimination is to blame. Since the Equal Pay Act was signed in 1963 the gender gap has gone from 59% to 77%, an improvement of less than 20 percentage points in 50 years. Even worse, the gap has stalled since 2004 at 77%. I’m not sure how predictions of it ending in 2058 can exist if it has stalled for a decade. Unless something changes 77 cents on the dollar is where we are and where we will stay.

Not only are women the victims of the gender pay gap but also knowingly or unknowingly its perpetrators. 40% of women who work are employed in management, professional, and related occupations. 70% of human resource personnel are women. Women-owned companies are one of only two sectors that have provided net increase in hiring since the recession. With so many women involved in hiring and pay decisions, how does the gender pay gap persist?   It’s probably not blatant discrimination.

Women business owners, managers, and human resource professionals need to make the decision to review hiring practices from a different perspective and change the situation. Each of these players has the power to impact her small queendom whether a company, department, or process. Granted for most companies, employees are the biggest cost of doing business. Finding even a small percentage savings in labor costs can have big impact on the company. I’m suggesting actively looking for the opposite but my suggestions will allow for a manageable hire by hire impact instead of a huge one time hit to labor costs.

Oh, and I’m as guilty as everyone else who has ever hired a person but I know I will no longer be. What I (and most employers) have viewed as a case-by-case situations are injustices that get compounded if I continue to hire by the currently acceptable hiring processes.  Here’s what I will do differently:

  1. I will no longer ask about current or previous pay because I know that the women and minority candidates have not been paid on par with white men. Considering pay as objective criteria not only hurts future pay but also the candidacy itself for women and minorities.
  2. I will no longer ask about the desired pay because I know women state 30% less than men on average.
  3. I will include the minimum pay for the job when I advertise it on a web site, a job site, or anywhere else because I know the first two elements of determining pay are 1) the market value of the job and 2) the company’s ability to pay. If a candidate is good enough to get the job then I should know what the absolute rock bottom pay is for that job. Also, pay transparency should start during the hiring process not after employment.
  4. I will no longer run credit checks on candidates because I know 1) 26% of credit checks have inaccuracies and 2) there is no correlation between a credit check and a good employee.
  5. I will never ask employees to keep their pay a secret for risk of getting fired because I know it is my responsibility to discuss the factors that determined an employee’s pay and not the employees’ responsibility to protect me from such conversations.

It costs nothing to implement these changes yet the positive impact can be immense from equal pay to improved employee loyalty to the improved bottom line of your company to the improved economy of the country.

We do not need to wait for congress to act or for the president to sign an executive order. Every woman who is involved in hiring can be a hero to all women by committing to changing the process every time there is a new job opening.   Will you dare to be such a hero? Will you commit to making change? Please leave a comment if you will.

Fear of Losing Job Offer When Negotiating Pay

Many people believe the act of starting a negotiation will result in losing the job offer.  Salary.com actually has some data of job offers rescinded because of salary negotiation.  The problem is the data is based on people trying to negotiate during the interviewing process.  If you have followed Equal Pay Negotiations you know that negotiating before you get the job is troublesome at best.  This Salary.com data backs that up.  In this video find out more about the data and how you can eliminate the concern