I am preemptively posting this here since somewhere critical comments tend to disappear or not get posted on Recruiter.com. I have no idea if this is on purpose or just a glitch in their Disqus implementation, or if authors control their own comments and differ in what they allow, but I’ll always double post from now on because I hate typing these things out and then losing them. This weekend I plan on writing a more detailed response to the Good Corporate Citizenship article from a while back. The below is a response to this more recent article on how passive candidates should behave.
The difference is, the passive candidate has a lot more leverage than the active candidate, as it is clear that an employer needs to lure the passive candidate away from a job they are already comfortable with.
This is actually incorrect. All positions have a budget, and usually a salary cap associated with them, and this is not an official budget or cap, but that which is dictated by the capital return based on the company’s ability to utilize a person. A passive candidate has a little more negotiating power than an active candidate, or so it’s assumed, but at the end of the day there will be opportunity cost for every extra dollar invested in any particular hire’s salary, and pulling a super star passive candidate doesn’t necessarily benefit your business when you have to pay significantly more for them. This squeezes the ROI for the position, and that’s assuming you can actually utilize them to their full potential. Most companies can’t, because most companies are managed in an average to poor manner. In essence it’s like buying a Lamborgini for your daily commute over winding roads through stop and go traffic. You’ll pay more initiall, and use a ton more gas, and while the Lambo is great for open road driving, its gearbox sucks in actual traffic. Its performance is hindered due to the circumstances under which it is being used. The same goes for superstar candidates.
Another analogy would be to look at your company as a production line, and to consider where the rate limitation is. If the up-line is only producing 10 widgets an hour, and has no real hope of exceeding that, then you’re wasting money on any down-line equipment with a much greater capacity. Now, there may be plans to upgrade the line, but in terms of a workforce that’s a long haul, and most companies are not making that investment these days, at least that I’ve observed. All told, the supposed higher productivity of a ‘passive’ candidate is only of use to you if you can utilize them to their full potential, and every dollar you spend to get them above and beyond what you would have paid for an active candidate squeezes your ROI and demands that you utilize them at a higher potential to get the return you need. Earning 10% on a 60K candidate means 6K profit. Earning 5% on a 100K candidate means 5K, and half the actual margin. Spending more doesn’t mean you get more when it comes to investment. Most companies aren’t Lamborgini companies, as such, they should probably get the Honda model. The margin is actually better, and the profit higher, on a more appropriately utilized employee than one with massive potential thrown into a mediocre situation.
I would also pose these questions, regarding Katherine’s hypothetical experience. If her current company really does value her, why are they not offering a comparable salary? Why did they not proactively raise her rate to what she could get from a competitor in an proactive bid to keep her? Would her company show her as much loyalty should she come into health problems and go on FMLA, or require off time? Or, more to the point, would they should such loyalty should their bottom line start to indicate her salary should be cut, or her entire position scrapped, not due to her performance but to the company’s own lack lust performance, more appropriately laid at the feet of her managers? While Katherine’s hypothetical current employer seems wonderful and may in fact demonstrate loyalty, most real world companies will ditch you in a second if keeping you meant sacrificing a fraction of a percent to their bottom line. A job is a mutua exchange, that’s all. The employer gets a work product they want more than the salary they pay, the employee gets a salary worth more to them that what they produced or the time it takes to produce it. Neither one owes the other anything, and in the real world the only people who do usually show loyalty are the employees, not the employers, whose loyalty is first and foremost to their profit above and beyond their employees by such a wide margin it may as well not exist.
Companies are not guided by ethics, but by profit. So should employees be guided. Keith Halperin is right, and employees should act like CEOs, and companies should stop bitching and moaning about loyalty which they never reciprocate on, and start treating and paying people well from the get go if they want to retain them, instead of only addressing the issue when they’re already leaving. The sad truth is that companies that act like Katherine’s hypothetical employer are so rare they may as well not exist. As a practical reality employees should not strain themselves to do the right or ethical thing by employers who will never spare a thought for doing the same by them. Employers have enough of an edge in the market without employees giving them even more based on one-sided assumptions of loyalty and ethics which they will never see returned to them.
Employees should get as much money and perks as they can, and then ditch their employers in a heart beat when they’ve made a prudent judgement they can get more, because their employers will do exactly that to them. Tit for tat, employees treating employers as badly as employers have historically treated employees is the only way the labor market will ever balance itself. As long as employers see their employees as disposable, employees should reciprocate.