I just talked to a client this afternoon that had been paying credit analysts $45k. He loves to pay low. He feels like he has gotten a great deal and crows with delight as if he found a designer watch at a rummage sale. I have told him he should be worried about how easily underpaid people are stolen by competitors.
He says their bank is superior, so people should want to work with them and just accept lower pay to be part of such a great team. He refers to his bank as “the winning Superbowl team.”
Recently he found himself in the position of needing a credit analyst, and he started to pursue a very junior analyst. She had an undergrad degree and had been at one bank eight months and her current role for five months. She was already making $85k. He was balking over the thought of paying an analyst that much. He moved without urgency, as he always does, and texted her saying they should talk. She texted back and said she had accepted an offer the previous night from a competitor. “If you don’t want to work for the Superbowl winning team, then you are missing out!” he proclaimed to me. I pointed out that every bank feels they are the best team.On a scale of one to 10 on the scale of picky, one, being easy peasy and 10 being “there is something wrong with everyone” he is a 10. He is someone who is looking for only premium matches. My whole point in sharing this story is to illustrate the state of the market. There are more jobs than bankers. Junior lenders were our top placements for the first six months of this year, with back room loan support being the top placements for the last half of the year. So few new lenders started over the last seven years! All of these junior bankers are getting large increases to move because they are in demand, and in short supply. Banking had senior lenders doing workouts while they waited for their portfolios to recover, and brought in very few new people. We closed a deal with a woman in a junior lending position who was at $67k, and took a job from our client at $85k. People aren’t just worth what they are making now, they are worth what someone is willing to pay them. We are not yet in “warm body” market though. Banks want the best available talent still, and they are being picky. Candidates still have to hustle to impress and show proof of their abilities.Every company sells that they are the best company to work for. Does telling someone you are great make it true? Is being great to work with enough to offset low pay? Perhaps for certain personalities, and for people who have great pain and motivation to switch companies, going to a company full of great people would be enough. I can think of situations in which this would work, and have had people take pay cuts to work with great people. However, in a market where any person interviewing has a few offers, this tactic won’t work.Everyone has a number. There is always a number at which candidates know they couldn’t say no. The best chance of landing anyone a candidate short market is to give that offer they can’t turn down and to move quickly. If a hiring authority stumbles, there will be five more companies willing to swoop in and move quickly to take that spot. We call that moment between the first interview and the offer “white heat.” People get more info and get excited after their first conversation. They are excited about the possibility of success and a shiny new employer. That excitement starts to wane if they don’t get feedback or the next interview lined up. They start to second guess the company, the hiring authority, or how well the interview went. We have seen candidates absolutely refuse to talk to the client again, because they are so mad their life has been on hold for an unreasonable amount of time. In recruiting we use the saying “time kills deals.”We recently had a client who wanted to hire a lender we had been working with. We were very clear on what numbers it would take to land the banker. He had more than one bank after him. The bank just didn’t feel the candidate was worth what he wanted. So, we thanked them for their time and said “sorry this didn’t work out.” But the bank would not accept that. They wanted to talk to the candidate again to spell out why they are great. Maybe, they thought, he just doesn’t realize how great this bank is. So they talked to him again. And again. Each time trying to persuade him that he should change his salary expectations. The salary they wanted to give him was off by less than $5k. And they wouldn’t change their number. He kept telling them, “I like your bank, but that number won’t be getting me over. I want to maximize my salary change in my move. I have other options.” It was like the bank was convinced that if they could just make him understand, surely he would lower his salary expectations. Renegotiating is worth it if there is new information, new numbers, or a sweeter deal. Wanting to rehash it over and over hoping something changes is an act of desperation. It is surely a quick way to damage your reputation and damage your odds of getting talent.Every bank is different, but I can’t imagine letting a good deal fall apart over a small difference in pay. It is essentially proposing to a potential new spouse and negotiating over the ring. “Will you marry me? I just adore you! We could be so great together. I know you have many other people wanting to marry you, and they are offering you a good life and very expensive and beautiful rings. There is just one thing. You are only worth a $1k ring to me… so?”