cut in pay

[Anonymous]

Well. I worked for a company where I referred someone for an open position, but they were not considered because 'they make too much.' This person wanted the job for the location and the experience; their current job was not enjoyable, was not giving them experience, and was a long commute. This was made clear during the interview, as well as the willingness (is that a word?) to take a pay cut but the company didn't think any person would be happy taking a pay cut and that they would leave soon after starting.

I am concerned now that this may happen to me. Has anyone heard of a job not being offered because they 'make too much'?

[DW Simpson]

Quote: Has anyone heard of a job not being offered because they 'make too much'?

Many employers prefer to know our candidates' salaries+bonus before bringing them in for a first interview. That way they can avoid situations like you described. So frequently what happens is that if an employer has a compensation range in mind, and a candidate is a good deal beyond that range, it's probable that the employer will just decide to not begin the interview process and move on to other candidates.

It's rare that they interview and then later on decide they don't want to make a candidate take a pay cut, even if the candidate offers willingly.

Also, as a general rule, employers don't like to dole out pay cuts for moves, mostly citing morale.

[DW Simpson]

I'm going to catch hell for this, but I'll add it anyway --

This is one example where a good recruiter can be useful in that they can advocate and may able to talk the employer out of an arbitrary pay range and give their candidate a shot. It happens all the time.

[WQN]

That's a good suggestion about the recruiter, sometimes we don't know how to advocate for ourselves in these positions.

[Anonymous]

Right now I only work about 3/4 time(28 hours a week). When I look for a job, should I tell them my actual salary or the full-time equivalent of my salary?

[DW Simpson]

Both, I guess. I haven't heard much about dealing with that issue, but I'm sure we have dealt with it in some regard.

[42]

The person's reason for wanting to take a pay cut would be a big factor in a company's decision about whether or not to even interview that person. Many people are willing to take a pay cut "until something better comes along", especially people who are about to lose their current job, people trying to get their first job in the country, and people who are so unhappy with their current job that they are willing to move anywhere just to get away. Most companies have no desire to be this person's short-term stepping stone or "rebound company". For those companies that might consider such a candidate, they would probably want to see just the right set of reasons for taking a pay cut (e.g., moving closer to family, sincere desire to change specialty or type of company, desire for something specific that only the new company can offer, etc.), and the pay cut would have to be relatively small.

<font size=-1>[ This Message was edited by: 42 on 2002-02-20 10:28 ]</font>

[glenn]

I never provided my income to a potential employer. My current income was a matter for my current employer and myself, and had nothing to do with any position I was being interviewed for (I would pretty this up, but that's the effect of what I would say when asked). The only reason I think employers want to know this info is as a negotiating tool, and since they're unlikely to provide info on what they're willing to pay during the interview process, it only seemed fair. I always said that I expected to be paid reasonably for the position and my experience, and left it at that. Never seemed to be an issue.

I did once take a cut in pay at a new position as I perceived greater upward potential. I also turned down a raise from my then current employer when I gave my notice. In retrospect, I wouldn't do it again, as the only reason I was offered a lower salary was because the company generally underpaid and had a salary freeze that didn't come out until my first review.

[Joo]

I was actually offered a position making less money about 2 years ago. They knew that if I accepted, I'd be working very close to home because we were shopping for a house in the same town in NJ, and they knew I had a small child and I would be extremely interested just because it was so darn close.
I found this absolutely insulting, and I asked if they realized that they offered me less money, and they said yes, but you'll be much closer to home and to your child.

[42]

Glenn's right - we normally wouldn't ask about salary before the interview, unless we had some reason to believe that the person was already making more than we could pay. (This is where recruiters helped, since they would raise this issue with us up front.) However, on the day of the interview, the first thing we ask them to do is to fill out a job application, and that asks for current salary. We've never had anybody refuse to share that information with us at that point.

Joo, if you're saying that somebody specifically offered you less money than they would have offered somebody of equal ability simply because they knew that there were other aspects of the job that you would like (i.e., being closer to home), I don't think that's fair. Are you sure that was the entire story?

[Brad Spirrison]

I agree with 42,

If anything, you should be offered more money due to the productivity boost associated with a short commute and higher morale.

[42]

Not higher either. Just the same. Of course, if these factors DO affect your productivity, once that shows up, then a higher pay would be warrented.

[Minerva]

42 - You're not only right, you didn't go far enough. It's not just unfair, it's illegal to offer a lower/higher amount based on personal circumstances. (That doesn't mean it doesn't happen, but it's still illegal.) Qualifications and performance should be the only factors a hiring company uses to determine offer amount. (Of course, once the negotiating starts, negotiating talent/experience comes into play as well.)

(OTOH - potential employers can't use personal circumstances unless applicants provide them with the information.)

[Ducky's Transvestite]

I am confused here. If a company wanted to know my current salary, I could simply lie and inflate it. If they base their offer on my current salary, then it would make financial sense to lie.

I generally do not offer up my salary. For one thing, I want to see what they believe a reasonable offer is. If they lowball me, then I know not to work for such a company.

DWSW, do you normally ask the job seeker to provide salary information? If one refuses, do you think this looks bad?

DT

[DW Simpson]

Quote: DWSW, do you normally ask the job seeker to provide salary information?

Yes. I asked one of our recruiters to put a percentage on it, and he said that roughly 75% of the time, a potential employer is made aware of the candidate's current salary before a phone interview. By the time they are brought in for their first interview, it's around 90-95%.

When it reaches the offer stage, it's pretty close to 100% of the time that employers know the candidate's current compensation.

Quote: If one refuses, do you think this looks bad?

A problem is that it's extremely difficult to even move to the offer stage without the employer knowing a benchmark to work with. (Although knowing that information doesn't necessarily mean that the employer will use it to multiply a percentage against it. It may simply be good information for them to have.) Regardless of whether through a recruiter or on your own.

That may seem unfair but it's the way it generally works. So by not divulging current compensation, it can put the employer in an awkward situation and may swing the balance towards not giving an offer, all other things being equal. It may look weird to the employer, and make it appear that the candidate doesn't trust their recruiter and/or employer, either.

Some actuaries (and I can remember thinking this same thing) believe that not offering salary information gives them the upper hand in negotiations, when in fact it decreases the probability that it reaches the offer stage.

[Quasi]

Giving current salary info doesn't bother me too much, but I was recently asked to give a range of salary that I would consider. They hadn't asked for my current salary yet at that point so I just gave them my current info and said that should give them a rough idea of the range I would consider.

Wouldn't you be screwing yourself to say what you would take before even getting an offer? And wouldn't a RANGE be a stupid thing to give? I would consider between X,000 and Y,000.....aren't they going to be hearing the X ONLY?

[Anonymous]

I think giving your salary can put you at a tremendous disadvantage. My sister, in another field, doubled her salary when the firm she interviewed asked what she expected to make. She suggested a range, and they complied. If she had stated upfront what her current salary was, I'm sure she wouldn't have received the higher salary, and in fact, she may not have been given an offer at all. Why can't the companies provide a range of what the job pays?

[Joo]

When my spouse applied for a job at a major investment bank, he was asked to bring copies of tax returns for the last 5 years, plus a pay stub from the current employer, among other things.
Can't lie about your salary much in a situation like this. I don't understand why most companies don't do that. It makes it easier to verify every place of employment on the resume as well as the salary.
Oh, and he got an offer that was almost 80% more than he was making anyway.

[WWSituation]

Claude wrote:
"It may look weird to the employer, and make it appear that the candidate doesn't trust their recruiter and/or employer, either. "


Wouldn't that just be a scandal?! Not trusting a recruiter? Not trusting their employer?

Sometimes I wonder what world companies and recruiters are living in when they expect loyalty and trust.

The best advice I can ever give anybody in this business is never EVER trust your employer, and never EVER trust a recruiter. Neither have your best interests at hand.

This doesn't mean that they are always conspiring against you, because they aren't. But they can both screw you royally if you give them your trust. I haven't met any recruiter (even those who are my friends) that are worthy of my unconditional trust. Forget about the companies. Anybody who trusts their employer to take care of them is a total idiot, and deserves whatever they get.

<font size=-1>[ This Message was edited by: WWSituation on 2002-02-28 13:03 ]</font>

[DW Simpson]

Quote: The best advice I can ever give anybody in this business is never EVER...

It's always great advice to look out for #1 in any professional endeavor. No argument here.

Quote: Wouldn't you be screwing yourself to say what you would take before even getting an offer?

The way you handled it was entirely appropriate, where you repeated your current compensation and put it back to the employer rather than being boxed into a range.

It depends, though, on the level of the position and how important an answer to the acceptable range question is to the employer.

It's not a bad idea to have a realistic range in mind in the event that you're backed into giving a range. But stating your current compensation and then leaving subsequent negotiation for later, between the recruiter/employer or candidate/employer, is reasonable.

If I get more feedback from one of our recruiters, I'll post it here.

[Dr T Non-Fan]

The minimum value of the range can be made by asking oneself: "What would it take for me to leave my current job?"
You account for the situation-change vs -no-change, upward mobility differences, location differences, etc.
Then, you can't rationally accept an offer that is below the minimum it would take. And you don't want to argue with rational thought. (I would, but I'm unique.)
And really, you shouldn't even be discussing salaries until it's clear that they're going to make an offer, and that it's the last unknown of both parties.
If they ask about acceptable salaries, simply ask, "Is this an offer? If so, I'd need it in writing."

[Troy McClure]

On 2002-02-28 13:31, Dr T Non-Fan wrote:
And really, you shouldn't even be discussing salaries until it's clear that they're going to make an offer, and that it's the last unknown of both parties.


I disagree with this - if it's clear that a company is not able to make an offer above my minimum, then why waste all the interview time? Unfortunately, it's a game of poker, where neither wants to show first. If the company has a range in mind, they want to know my expectations (and possibly lower their range), and I want to know their range (and possibly increase my desires based on their range). This is one of the areas where the recruiter really is useful, because he can ask both parties, and then not waste my time with companies that will not meet my requirements.

[WWSituation]

Current comp. may not have any bearing on a prospective employer's decision, it will more likely give the employer a sense if you are currently overpaid or underpaid. I think they want to know in case you are already out of their range.

The bottom line is "I demand a minimum of X, Y, and Z. Should we continue to speak?" If a prospective employer says no solely on the basis of what my current pay is, then so be it. It's their right. I'm better off not working there and save myself future grief over my pay.

[Dr T Non-Fan]

Yes, knowing their range (especially the minimum) before you START the interview is extremely helpful. I don't think I'd interview anywhere without knowing that information.
That's why their knowing your current salary is helpful to both parties. It doesn't give away your minimum, since it's entirely determined by your factors. It's possible that you would take a cut in pay to leave your current job.
This is something the HR dept might help with. But that's all they're good for.

[davespencer]

WW, you must have had some bad experiences with recruiters. Although I know of several recruiters, and firms, that are not trustworthy, I know of many that are. You should no more make blanket statements about my profession, than people should make about yours. It should always be a case by case basis.
I completely agree with the last post.

<font size=-1>[ This Message was edited by: davespencer on 2002-03-04 09:21 ]</font>

[WWSituation]

DaveSpencer:

"WW, you must have had some bad experiences with recruiters."

Yes, I have - with several. I didn't say that they are all bad, I just said that one should never trust one to have one's own interests at hand. You are, after all, employed by the hiring firm, not the candidate.

More DaveSpencer:
"Although I know of several recruiters, and firms, that are not trustworthy, I know of many that are."

I'm sure that many are, I've dealt with some of them, though I'd recommend not giving the benefit of the doubt.

More DaveSpencer:
"You should no more make blanket statements about my profession, than people should make about yours. It should always be a case by case basis."

People may say what they want about actuaries, especially pension actuaries. Many are absolute tools. Like you said, trust is earned on a case by case basis. As a professional, your first impression is always at the mercy of the public's view and past experience with your peers. You have the opportunity to alter peoples perception by coming through for them.

Remember the context in which I made my statement. It was in response to the notion that not trusting your recruiter or employer was some sort of negative thing. I still think that that was the most ridiculous notion I've heard here.

[Shmaxuary]

Sorry to try and switch back to something close to the original topic, but.....

When would you guys consider taking a cut in pay? I just got an offer with a much worse commute but potentially more interesting job and was surprised that they offered me less than my current salary...and yes, they knew my current salary. It is at an insurance company while I'm currently in consulting so maybe that's what they are thinking. Another fact that I feel is important is that I wasn't knocking on their door, a recruiter called me and I agreed to interview. I could see them offering less if they thought I was desperate or something.

Bottom line is that I'm still considering it (after trying to negotiate the salary up some) so I guess it wasn't such a stupid move after all. Thoughts? (not necessarily from Thought :wink: )

[Ammie]

I would consider a cut in pay if the job was very interesting, or if it meant a reduced work week. :smile:

[Dr T Non-Fan]

I'd consider a cut in pay for:
1. Bigger potential bonus amount.
2. BETTER commute. Free parking if paying is required for lesser folks.
3. Lower COL, but it's MY COL, not the local yokel's COL.
4. Less work.
5. Telecommute, with free broadband hookup included.
6. Company car.
7. Free health insurance for whole family.
8. Bigger (and immediate inclusion in) 401K contribution.
9. A real nice DB plan, with a retirable benefit amount.

It would have to be an acceptable combination of the above. One that turns out to be a higher salary.

[Shmaxuary]

On 2002-03-04 13:47, Dr T Non-Fan wrote:
I'd consider a cut in pay for:
1. Bigger potential bonus amount.
2. BETTER commute. Free parking if paying is required for lesser folks.
3. Lower COL, but it's MY COL, not the local yokel's COL.
4. Less work.
5. Telecommute, with free broadband hookup included.
6. Company car.
7. Free health insurance for whole family.
8. Bigger (and immediate inclusion in) 401K contribution.
9. A real nice DB plan, with a retirable benefit amount.

It would have to be an acceptable combination of the above. One that turns out to be a higher salary.


This job has #1 and #8 and I'm hoping that #4 is also true. The other draw is less travel. I'm leaning towards accepting the offer but can't help feeling like I'm being stupid.

[Dr T Non-Fan]

Think about commuting time as time you could be doing something else: working out, feeding the homeless or pigeons, seeing a movie, etc.
You, as an actuary using all your superpowers, should attempt to quantify your utility of each of these differences.
The 401k, for example: do you get the contribution on Day 1, or do you have to wait a few months before they start paying and even years before their piece is vested?
The work: how much now versus your perception of the new job? Out at a less varied time each night versus who-knows-when?
That bonus: how much is based on what YOU can control. Too many times these bonuses are based on how much of the product is sold, or based on profit and someone decided that Actuarial's rates were not going to cut it. Or some fumbled a bit with the reserve, and that will bite next year's bee-hind.

[Ammie]

{Aside: I don't consider it a cut in pay if they improve your pensions or other monetary benefits to compensate for a drop in your base salary}