salary packages

To attract and retain employees, companies need to step up their compensation packages

One of the biggest surprises of my recruiting career would have to be that some employers always push the boundaries when it comes to their hiring budgets. Actually, I’m not at all opposed to those lengthy job descriptions with lofty expectations – That is, when the employer is actually willing to pay for it!

 

Thrifty behavior actually leads to a revolving door of candidates and exhausts a company’s resources. Ultimately, when companies cut corners on salaries, more money is actually spent in the long run because of the time and energy expended replacing employees; and a company still won’t have the best candidate for the position. As illustrated above, you’ll just be left empty-handed.

 

For example, there are a number of Fortune 500 companies that have contacted me repeatedly for help, and I’ve always politely turned them down because they have become infamous for their hiring sprees and, basically, have been to every recruiter, employment agency, and headhunter in New York City as well as Los Angeles (trying to refill the same positions over and over again).

 

In short, the companies’ reputations for turnover have become legendary and quality candidates have lost faith in their brands, as evidenced on many websites that rate employers’ interviews and job experiences (like Glassdoor.com). I know it seems ironic that they are Fortune 500, but high-profits for shareholders doesn’t always equate to a good working environment.

 

In a recent post titled “Employers: Recruiters Aren’t Modeling Agents,” I discussed how some top-tier companies often request candidates that are good-looking; and actually put priority on the looks over the actual qualifications. Now I’d like to talk about another crazy reality: the “wine taste on a beer budget” syndrome. Yes, it’s a serious disease that’s spreading rampantly throughout corporate offices everywhere.

 

If your company wants to hire the best of the best candidates but not pay them what they are worth, then here are some of the signs and symptoms that your company’s Human Resources department might have a hangover from cheap beer (metaphorically speaking of course):

 

Fortune 500-itis: A feeling of loftiness

Let’s face it, if your HR department was 100% effective at hiring and retaining talent, then you wouldn’t need to reach out to a recruiter in the first place. If the company’s search hasn’t yielded the results you’d hoped for, then my prognosis is that you may have “Fortune 500-itis”.

 

The problem is curable, but it’s a feeling of loftiness that comes from companies having an inflated sense of importance in the marketplace. They think they are the caliber of a Fortune 500 company. Their arrogant behavior causes them to think that they can trade a decent salary for the “experience” of working at the company, but in reality they just can’t back-up their bravado.

 

THE CURE: Quit comparing apples to oranges and understand that if you can’t offer what the big boys have, then you’ll actually have to raise your salary, or lower your expectations.

 

Offering (Imaginary) Wealth in a Future IPO

“Sweat equity” is one of the most popular carrots to dangle when it comes justifying a low salaries; and it doesn’t just happen at start-ups either. CEOs of such companies love to invoke the names of companies like Microsoft or Facebook and paint rosy pictures of early retirement to their workforce. In reality, the chances of companies going public are very slim indeed; and even if they do go public, there’s no guarantee of how much options would be worth, but that still doesn’t stop companies from trying to cheat candidates out of a fair wage.

 

THE CURE: Take a class on “Salary-ology,” which teaches companies how to avoid pie-in-the-sky methodologies when offering compensation packages. Savvy employees with great track records didn’t become successful from being stupid, so they’re not going to fall for these old, tired tactics. Instead, face the music and offer a bonus that is based on performance because that’s something achievable. Quality employees aren’t going to gamble with their careers; if they wanted to then they would move to Las Vegas and become a professional Black Jack player.

 

Offering a Fancy Title When It’s Just a Lateral Move

Offering a title in lieu of a fair salary isn’t going to attract the best of the best. Asking someone to make a lateral move in their career, especially if you’re asking them to leave a stable job for your gig, is just plain absurd. If you’re in that position, pop a few hangover pills and muster the courage to tell the higher-ups that they have to face reality. Just because the job market is a little slow shouldn’t give companies justification for low-balling candidates.

 

THE CURE: Do some research about what kind of “super-star candidate” you’ll get if you actually raise your salary to something fair, and you’ll see that the company will make its money back in no time because experienced candidates will make more money for the company in the long run.

 

P.S. Offering a “competitive salary” is a myth at some companies. Essentially, HR just combs job ads to see what other companies are paying, so they gage a compensation package off of that. Well, it goes without saying that if you calibrate your package against other companies that are already offering low packages, then it’s kind of pointless.

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