Image from The Future Edge: Discovering the New Paradigms of Success (Joel Arthur Barker).
I wanted to note a paradigm that appears to still be prevalent across Corporate America. This paradigm, I believe, is fundamentally flawed. To get to this observation, I thought back many years. I had gone through two extremely rigorous recruiting processes for post undergraduate and post MBA top-tier management consulting firm roles. The recruiting for the roles proved to be very transparent to me. Essentially, despite a few outliers, my entire “start” class entered day one, in the same role, with the same compensation packages.
From day one, our future was ours to begin. Meritocracy served as the guiding principle. I am not claiming any version of utopia in terms of complete equity and the complexity that may follow. Rather, in the eyes of our employer, our start class, on day one, possessed a very similar potential for our own success and our potential contribution to the organization.
The message here is not that compensation is a “one size fits all” concept. Instead, the message, leveraging the consulting example, is that employers did not ask me to declare my “value” as a first step in the recruiting process. I was not in a position to assess my value to the employer and could take comfort that those similarly situated, in terms of education and experience, were treated fairly.
I understand from my peers that they are approached to explore various executive roles. Similar to my prior consulting firm experiences, recruiters begin the compensation discussion by telling my peers the compensation range that is offered, and ask if the candidate wants to continue the dialogue. My peers are in no way naïve in expecting that experienced hires all come to the table with equivalent experience and potential.
However, unlike the compensation discussion described above for executives, there presents a different paradigm that is prevalent in many other recruiting experiences. In these instances, the candidate is asked first what his or her current compensation is. It is almost always a question on the first telephone interview.
This approach places the prospective hiree at a decided disadvantage. Compensation can always be up for negotiation, but asking the individual to declare one’s current compensation may set the compensation bar below one’s market value. Companies are best positioned to tell the candidate the compensation (range) that they would offer that candidate for a simple yes or no response, by the candidate on if they would like to proceed. Asking the candidate to declare the starting point for negotiation establishes an inherent imbalance from the beginning.
The company itself has/should have the benchmarks and fact-base to inform the candidate of the compensation range available for the specific role and gain an initial reaction that may prompt candidate attempts at negotiation with the employer. The data point(s) are/should be available about the compensation range being offered, based on the triangulation of several facts including:
- Others in the company that are in the same role
- The candidate profile (experiences, education, capabilities, projected future potential/value)
- The overall company performance (current year and projected)
- Overall market conditions
- Competitor compensation for similar roles
Recruiters can come to every discussion with this data and with the simple facts to backup the data. Therefore, there is no need for a game that “favors the house” and places the prospective employees in the uncomfortable position of selling themselves short.
I suggest that in 2017, more recruiters and candidates follow a “we tell first” approach to the compensation range discussion. I believe that this approach offers an opportunity to introduce transparency and trust into the recruiting process from the first contact.
As we add staff at Bastien Advisory Group, “we tell first” is the approach that we follow. Simply, it is the most equitable way to launch an employment relationship and establish trust even before the individual’s first day. This sense of trust, we believe, will create a foundation for employee retention and organizational value.
Here is to some paradigms shifting in 2017!
Let’s all do our part to own this year.