I once consulted for an early-stage company CEO who loved negotiating salary deals with new hires. No matter what salary compromise or offer I suggested to him he would demand I go back to the candidate and offer much less – even when he truly wanted and needed the employee and could afford what they asked. It was about power and winning. He saw squeezing a dime and getting the candidate to bend as a way to show his authority early. What he was really doing was breeding contempt not only for him but for his company’s image in the marketplace. Turn-over was high and an expensive drain on his resources and he couldn’t understand why. He was a decent man and fun person to be around, but this management tick almost derailed him.
One morning he said to me, “I love tough economies and recessions. There are usually lots of bodies in the water.” He was, of course, referring to the unemployed. He saw this pool (pun intended) of bodies as a desperate bunch who would take nickels on the dollar to come work for him. It just doesn’t happen that way. Here is why: The assumption made is that the skill set being sought happens to belong to a member of the unemployed ranks. Worse yet, the assumption is that the IDEAL person is among the unemployed and needing of a job. Here is the reality: During economic downturns people tend to cautiously stay put if employed and will wait out the economic storm. When good times return the exodus can be pretty high of employees who felt underpaid or taken advantage of. The disenfranchised become highly recruitable. It is happening right now in our Seattle market.
My caution to clients is always the same – don’t generalize during good or bad markets – there may be a large pool of unemployed, but they may not be of the right fit for the given openings. Accept that recruiting the right person takes planning and a deliberate process and investment. Spend the time and energy to find and hire the best person for the job instead of trusting the winds of economic change to send along the dream candidate at a cut-throat salary.