- When is making less money a good thing?
- Always, especially when a job seeker is looking for a job.
- But some job seekers may not know the benefits of making less money, particularly when less money comes in exchange for solid employment.
- That’s where your responsibility as an employer to explain these benefits, seven of which are outlined in this article, comes into play to a candidate who may be asking for too high a salary.
Can you make too much money? An accountant might say yes once it comes down to a well-paid client’s income taxes. As for the client themselves – any client for that matter, no, there is no way a person can make too much money, or get paid too high a wage for their work.
As workers, the least we can ask for is to be paid fairly for our daily efforts in front of a computer screen, while seated for eight to ten hours within an office cubicle. And the more we do this type of work, the more we expect we should be paid fairly.
Of course, pay is one of the most important aspects of work. While there are jobs of prestige and stature in which an employee is more thankful for the job itself than the pay the job will garner, for most of us, jobs are sources of income that far outweigh any type of status that can be associated with the work itself.
Generational workers, such as Traditionalists and Baby Boomers may click their tongues in disgust at today’s Millennials and Centennials, stating that these two generations of workers despite their demands for a better work-life balance haven’t any idea how lucky they are to have a job in the first place.
These days, however, arguments like that are old and for the most part retired. The old school philosophy of work as being a privilege and not an evil necessity has evaporated due to:
- A consistently strong economy
- A wholesale change in attitude toward work by today’s workers
- A change in how employers approach, engage with and retain their workers through:
- Better/more benefits
- Better/more work-life balance
- Near-mandatory insurance coverage
- Incentives such as paid education, savings programs (401k) and other perks
The Big Green Machine
Then again, why kid ourselves? As employers, we understand pay, pay grade and the importance of both to our employees. We also understand there are lines drawn in the corporate sands which demarcate how much is too much of a wage to pay the people who work for us.
While a new or existing hire may ask for a salary that seems perfectly in line with the work they will/are performing on a daily basis, those same salary demands may invariably leave us with the unenviable task of explaining to these employees that they are asking for too high an hourly rate or an overly excessive salary.
No doubt about it, explaining to an employee why you cannot pay them the salary they desire is never a good moment, especially during the hiring process when you find yourself facing an extremely well-equipped candidate. At that time when you tell the potential employee you cannot pay them what they want, you can experience:
- Feelings of guilt – in that you may have misled that potential employee to believe this job was higher paying than first believed.
- Inadequacy – in that if you could financially afford this potential employee you would of course pay them what they want, yet you simply can’t.
- Embarrassment – in that while you are a solid company that stays in business, you’re not solid enough to pay this potential employee what they want.
- Anger – about whether or not this potential employee can see that if they’re lucky enough to be offered a position, that won’t deter them from looking at another company which will pay them the amount they feel they deserve.
Thus you and that potential employee have reached an impasse. This is where the make or break mentality of running a business stocked with dependable and loyal employees can become a pipe dream.
Or, on second thought, this may not be an impasse. This may be a great opportunity to instead show how good a manager you are, and how the care you give your employees can truly shine with alternatives that are just as good as a strong salary itself.
Beyond the Big Green Machine
John Rampton in his article for Entrepreneur “7 Factors That Could Make a Lower Salary a Better Deal” suggests that there are definite advantages to an employee netting a lower salary. However, while this article is geared toward job seekers, it can nonetheless apply to employers as well, particularly those who are faced with saying “yes” or “no” to a potential employee’s salary request.
1. Lower cost of living and better quality of life.
If the job you have available is in a different part of the country, or even a different part of the state where the cost of living is lower, explain to the job candidate that it might be a good idea to take a lower salary. The candidate will be able to more easily cover their expenses while living comfortably.
This sort of compromise is good for a job candidate who is either recently married or is in the process of raising small children. Mention how the area is safe in comparison to other areas where, yes, the same job can result in a potentially higher wage. However, the atmosphere may not be anywhere near as chill for them or safe for their kid(s).
2. Better tax rate.
A larger paycheck invariably means larger taxes. This is a universal scenario within the U.S. in which he or she who makes more money almost always pays more in federal income taxes. In certain states, the same can be said for the state taxes which automatically increase when one’s pay increases. Explain to your job candidate that a lower income can result in lower taxes and potentially more money for quality time with their family. Also explain to the job candidate that a higher tax bracket is to be taken seriously as one has to have the money to pay their higher taxes by early April of each year.
3. Better work schedule/the offer to telecommute
This is a two-pronged benefit in lieu of a candidate asking for and getting a higher wage.
- If a lower net salary comes with the ability to telecommute and work remotely part or all of the time, then it would definitely be a good deal. That’s because the job candidate can save a considerable amount of money by working from home, upward and even beyond the point of what they would get paid at a higher wage. For example, expenses like gas and vehicle maintenance, lunches, and professional clothes, can be much lower if they were to telecommute in lieu of a higher salary.
- Better time management, less stress, strain, and exhaustion can also come as an advantage to telecommuting. Studies have shown that employees are far more productive due to telecommuting, which you can use as an incentive to your potential employee. You might even give them further enticement by offering them shortened work days that are paid as a full day if they finish their assignments early.
4. Offer or suggest better benefits.
Impress upon your candidate that along with a lower wage comes a certain amount of freedom in which that person can care for issues around the house such as sick children, home repairs, or cleaning people. With a lower salary, there can be more flexibility in which the candidate does not have to be present for all 40 or more hours of the week. Remember, for many, this type of autonomy is worth much more than a few extra bucks an hour or a hundred or so more at five days’ end.
Also, explain to your candidate that the ability to have things like medical, dental, and vision insurance as well as childcare, sick days and paid vacation, and any type of retirement account can multiply to a sizable advantage that helps the person live a healthy life now and into the future.
5. Better opportunities (if the candidate takes the salary offered).
If you as a hiring manager or employer feel the candidate you are interviewing is a perfect fit in all but the salary they are asking, entice them with the promise that better things are on the horizon for them.
As Rampton explains in his article, the candidate needs to know that there will be a comparable tradeoff in their favor if they take the pay wage offered to them now.
Convince them that if your company’s field is what they’ve desired to enter this is their chance to get their foot in the door. So with that, they should take it. Impress upon them that they will be happier in the future because they took a leap of faith with your promise of better opportunities in the future. That now is the time to gain experience and grow in the industry they (and you) feel passionate about.
Granted, coordinating and agreeing to such an arrangement with a job candidate puts a great amount of responsibility on you as an employer to come through for this candidate. Make certain you keep your promise as (or rather if) this candidate proves his or her ability to ascend from the job (and salary) they now work for to the better opportunities you promised them during the interview process.
6. Better financial management.
Getting into one’s personal finances is a tricky if not taboo area of any business relationship between a manager and employee. While many may strongly advise against this, in certain situations having a “financial management” talk can have its benefits.
In the interview process, such a talk can be a bit…iffy. Use your better judgment with this factor as you attempt to prove making a lower salary is a better deal. That’s because at this juncture you will be encroaching into the candidate’s personal finances as you suggest to them that taking a lower salary now will simplify their lives by potentially lowering their day-to-day expenditures where they won’t focus as heavily on material things.
To lessen the potential conflict, try to pair this suggestion with a promise of better opportunities to come (factor #5), which will hopefully establish a sense of trust and desire for well-being between you and the candidate. Explain to them that you wouldn’t have this type of conversation with just any candidate who walks through the business’ front door, but that because you have faith in this candidate who you believe would be a good fit to your company, you want to touch on all the benefits possible for them to live a good life while working for you.
7. The common denominator: In the end, there will be happiness and satisfaction.
In the end, it is paramount that you clearly and convincingly explain the tangible benefits of accepting a lower wage. Convince the job candidate that each of the aforementioned factors will enable the candidate to ascend your company’s structure if they first accept a lower salary. Should they do that, and as you promise, rise within the company, there is one common denominator that will result from each of the seven factors, which is happiness and satisfaction – two notions of the working world that matter much more than money.
Conclusion
To be sure, employers do not have to do what has been outlined in this article. They don’t have to haggle, compromise, negotiate or even consider for a single moment a job candidate’s wage request if, in their view, it is the least bit ridiculous or over the top.
However, there are times when that certain job candidate is the one. And with that, all options need to be considered. Smart managers and employers will understand this, and they’ll try their damnedest to not let the one escape the meeting room without first being hired.
With that said, if the salary is too rich for your blood, compromise as best as you can. Map out and pinpoint that common road on which both you and your job candidate can be happy now and in the future. And lastly, be sure to keep your promises to this candidate. Good employees can be here today and gone tomorrow. Don’t let that happiness escape you, your business, nor your candidate.
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