Comments on: Dishonest Recruiters Will Be Your Downfall

By: Sarah Chambers

Sarah Chambers — Tue, 14 Jul 2009 10:36:10 +0000

In addition to the reasons discussed above, I think another reason companies do pay studies is to look at things like the potential for large-scale internal equity problems. Companies watch internal equity to look for pay compression, inversion with management (where that is relevant) and possible discrimination (which could happen if younger employees are hired at higher rates than older employees were hired into the same jobs some time ago). The issue is a complicated one. I see both sides of the discussion pretty clearly. I think another complicating factor is the personalization and humanization. The idea that “something is worth what someone will pay for it” becomes more difficult as that “something” becomes someone you might know.

By: Frank Roche

Frank Roche — Thu, 09 Jul 2009 17:56:01 +0000

@Ron Ulrici: Thanks, Ron. Isn't it nuts about how they don't get back to people? I think it's shameful.

By: Ron Ulrici

Ron Ulrici — Thu, 09 Jul 2009 14:11:36 +0000

Out of the park again, Frank. My friends who are out of work would say that most recruiters don’t practice item #4. In fact, they tell me that if they get any response from a recruiter, they are shocked.

By: Frank Roche

Frank Roche — Thu, 09 Jul 2009 02:12:01 +0000

@Peach Touche on the fairness question. You’re right about that and it was one of those “thing that make you go hmmm.”

I guess my take is that there’s a fair market value to a job, and it’s not whatever a person will take. Otherwise, why do any pay studies? Simply try to determine the bare minimum that you can get a person for. I think unfettered capitalism undid our economy, and taking advantage of people (I don’t think you do whatsoever) is borderline illegal. It’s certainly unethical. Seriously, why not offer super low priced jobs to desperate people with all kinds of MBAs and such? It could be like a reverse auction — give a job to a person who will take the least amount of money. (Hey, that gives me a million dollar idea. Set up a job auction….hmmm.) Maybe it’s a little of my socialism coming out, but I think capitalism can crush people. Yes, find the efficient frontier….but pay fairly.

To extend this, what would you think about repricing all jobs in a company then? I mean, the market is down, companies have lost fortunes. No one is hiring. Would it be an good use of shareholders’ money to keep pay held? The markets are down 50%, why not take advantage and really dock pay. How would that work? Would it?

By: PeachFlambe

PeachFlambe — Thu, 09 Jul 2009 00:54:04 +0000

Totally understand your point – I am a stone cold capitalist when it comes to some things, and pay is one. I guess the thing for me is that there is no one true market rate of pay…there’s no such thing as a $200k job if someone is willing to do it for less…just like a company’s stock price is whatever the last person was willing to pay for it.

The other thing I struggle with is that if it isn’t fair for a company to pay lower salaries, then why is it fair for employees to leave that company for a higher salary? If you’re going to make the employer pay more than he can “get away with”, then shouldn’t you restrict the employee from selling his labor to the highest bidder?

By: Frank Roche

Frank Roche — Tue, 07 Jul 2009 17:12:53 +0000

@Peach I don’t think any company’s pay philosophy is “screw ‘em because they’re out of a job.” I’m not a stone cold capitalist, so I have to specify that I don’t think it’s always about market forces. Market forces aren’t market forces when you try to pay $50K to someone when the job is a $200K job and someone tries to take advantage of a down-on-his-luck employee. That’s not good use of shareholder’s assets — that’s thievery. It’s the equivalent, to me, of places charging $25/bag of ice right after a hurricane. (And there are laws against that.) I say pay what a job is worth, but lowballing is another whole realm.

Yep, it might be the hiring manager — in which care they’re dishonest, too.

People who have situational ethics really bug me. This is a bad economy. That’s no reason to act unscrupulously. Those who are acting badly now will suffer the consequences in the future.

By: Peach Flambe

Peach Flambe — Tue, 07 Jul 2009 16:24:39 +0000

I’m not sure I agree with number 2. A company should pay people according to what they say their pay philosophy is. If they say they will pay at the bottom of the market, then there is nothing wrong with that. And if the market competitive pay level declines due to a recession (the laws of supply and demand operate in the labor market as well as other markets), then I think the company has every right to pay below what it might have paid in good times. As a shareholder, I don’t want the companies I invest in to pay any more or any less than what is required to attract talent. Neither one is sustainable over the long term.

As for number 1, in my experience it is the hiring manager that is the one calling the shots. The recruiter is often caught in the middle.

It’s a tough world out there, even tougher in a recession when the gloves come off. But I think that hiring managers and their recruiters act the way they do because they can get away with it – and they can, for awhile. But when the market turns, they will need to change their tactics.