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 Hey all,

I have a situation that I don't think has been addressed before; so if it has, my apologies.

Have you ever dealt with a situation where the hiring company appears to have badly misjudged the market when setting a hiring salary range?

I have an offer from a non-profit social services company, and I would very much like to take the offered role.  I've been working in the non-profit sector for many years, and this particular company meets every single criteria I have for my next position, except for one: Compensation.  The role would be a "bigger fish, smaller pond" opportunity, which professionally is just what I'm looking for.  Their mission and people are second-to-none.  Unfortunately the offer came in at a $10K pay cut from what I currently make performing a lower level role at another non-profit.  They stated it was the top of their hiring range.  I should point out that this is a new IT Director role, and they've never had an IT leadership role before.

In doing market research, I found that the average IT Director salary in my market is about $65K above their offer, with the low end in the market still being $30-35K above the offer.  The job description and expectations match very closely with the descriptions I found when researching the market.  My expectation, based on the company's non-profit status, it being a new role for the company, a promotion for me, etc. is $20K more than the offer ... still well below market ... and still a significant gap.

I simply cannot afford a pay cut, no matter how much I like the company and the role.  Any ideas as to how to go about discussing this with them?  Or am I better off just walking away and wishing them the best?

Thanks!

Mark's picture

...non-profit pay scales have a much higher variability than for profit firms. Because you didn't tell us how much the actual offer was, what your role is now, how big the firm you are working for now is, etc., etc., etc, it's really hard to tell whether or not I would give them the benefit of the doubt for the difference between what you can afford (not their problem) and what they can afford. Remember, by the way, that you have never done this job before - or, it's reasonable for us to assume that. That means you go into such a role at a discount. Snce you cannot take a pay cut, this seems a simple problem: decline the offer. If you are so inclined (and while it sounds like you might be ther are also signs that you are not) you could decline with deep regret, and then tell them that the only issue is salary. You could share your research, and then be smart enough to be understanding about their frugality ( rather than proving you are right and ipso facto their offer is wrong). This might help them realize they really want you. it's possible they may be okay with the risk that lower pay brings, your experience aside.

If it were me, I'd tell them I am regrettably declining, but only due to salary, MD then show them my research and hope we could work something out. Ad I would of course accept it if they couldn't, because as you say you cannot take a cut. ( about which, by the way: your dream job, and you wont tighten your belt for, say, a 1k$ cut?)

Mark

In a car home, on my iPad.

afmoffa's picture

TSGeek, Are you comparing salaries from for-profit companies in this mix? Or is this company's offer far below what other non-profits would offer? You certainly seem to have done a lot of good research on this, but I want to be sure we're comparing non-profits to non-profits.

If this company is losing out on good talent because they are paying less than the market will bear, then I think it's important that you tell them so. My experience with non-profits is they often focus on their mission to the detriment of other considerations and can even come to disdain picayune topics such as money: "If you were as committed to this goal as you professed to be, you wouldn't quibble about salary." That may or may not be the case here, but it is absolutely appropriate for you to say, politely, something such as:

"I'm so grateful for this offer. I'm excited about Acme Foundation, this is just the sort of role my previous work has prepared me for. I would say yes in a heartbeat, but I'm afraid the salary is well below my expectations. As such, I respectfully pass. [Please accept or decline the offer in the first paragraph; it's theatrical to string them along, and any worthwhile recruiter will keep reading for at least another paragraph.]

"As you know, in my current role at the Delta Initiative, I'm earning $X. Your offer of $(X-10K) would require me and my family to make major adjustments in our lives, adjustments which might even distract me from my duties to Acme. I believe in giving my employer my best work, every day, and Acme deserves nothing less than my full attention and effort. My research into Acme and its peer foundations led me to believe this position would offer compensation of at least $(your bottom line). Here at Delta Initiative, the IT Director earns $(X+65K), and I believe that if I continue to give Delta Initiative my best, I will be a good candidate for promotion when the time comes.

"I was very impressed with everyone I met over at Acme, and so grateful you thought enough of me to offer me this opportunity. I wish you every success in finding a suitable IT Director. The economic climate is a sad fact of life for all of us in this sector, but I'm optimistic that it won't last much longer. If your budget changes, I would be happy to resume my candidacy.  Your team is clearly a first-class outfit, and I would be excited to consider future opportunities to work with great people like Sean, Kim, and Jackie."

My street cred on this, such as it is:

I've worked at non-profits: college Webmaster, college admission dean, English teacher, festival promoter.

I've worked at for-profits: camera store manager, desktop IT support, graphic designer, editor.

tsgeek's picture

Thanks for the feedback.  You both obviously put a lot of thought into the question.  This helps a lot.  It's always good to remember that the offering company has their own budget and "family obligations" which may restrict what they can afford.  Proving I am "right" does no one any good, and guarantees I would be out of any future consideration.

Here are the particulars:

  • Offer is $90K, with 1 week more PTO than I get now. Otherwise, benefits are lower than current job.
  • The market average (for profit and non-profit) is about $155K
  • The midpoint for the similar role at my current company (also non-profit) is $135K
  • The lowest pay I could find for my market is $120-125K
  • I'm currently just under $100K, as a middle manager, with a pension that is company funded at about $7,000/year.
  • The current company has 2x the employees, and 4x the revenues over the offering company.
  • My expectation is $110K

The offering company definitely talked about the mission-over-pay factor, which I agree with. I LOVE what they do, which is why my own expectation is so far below the market.

I'm leaning towards regretfully declining, due exclusively to the salary. I'm thinking something like this:

"After thinking over scenarios thoroughly with my family that might make this work, I've come to the decision that I just cannot afford the cut in pay. I respectfully decline the offer. Based on my market research, it appears that my expectation of $110K is still well below market rates, even for other non-profits. I'd be happy to share that research if you like. However, I respect the reality that your budget just doesn't allow for that right now. If your budget changes, I'd be happy to resume my candidacy. I'm very impressed with your organization, and would be excited to consider future opportunities to work with you."

Thanks so much for your thoughts!

Mark's picture

Look, I've checked with Mike - someone who spent years in IT, in successive roles of leadership, and he and I agree:

NO WAY the average is 155 for the role you're discussing.

Now, that may be an overstatement.  There may be several factors involved here; here are two:

1.  You're lumping profit and non-profit.  TOTAL non-starter as an analytical starting point.

2.  There's a difference, in small to mid-size companies, in comparing to large for profit firms, in the contect between "distance from the top" and "distance from the bottom."  If you're an IT director at a small firm, you may be close to the top, but you're ALSO not far from the bottom.  In a 500 person firm with an IT staff of 30, the Director might in fact be fairly close to the top and yet still only have a staff of 30.  He might think, "hey, I'm like the CIO"...and in a way, I can see that.  But that in no way means that that role ought to be compared to a CIO role EVER.  On the other hand, a Director role in a huge company might be someone with 30-100 people in their org (though those numbers would be LOW), and they would still be 5 levels removed from CIO.

 

I don't understand what you mean by middle manager...how far from the top?  how many total personnel in IT?  How far from the bottom?  And how big is the new company?  How many layers of IT?  How far from the top would you be?  how far from the bottom?

There's too much variance in your datum that one firm is twice the size of the other.  Is it 250 and 500?  or 5,000 and 10,000?

Mark

afmoffa's picture

Respectfully, I disagree with Mark's last post.

I don't disagree with his data. Mark (and Mike) may well be right about salary trends and data. In which case, TSGeek, your data are wrong, even though your second post clarified that you were comparing apples to apples (non-profit salaries to non-profit salaries). Data-driven discussions are good, but I think both TSGeek and Mark are overthinking this.

All the research in the world is a side-issue here. All you need is this:

The job offer is for one full step up in responsibility, and pays $10K less in salary, than the job you currently hold. You are completely justified in declining the offer based on those points alone. If you wish to make a counter-offer, I think those points are also your first step.

I like market signals, and non-profits can sometimes be deaf to market signals, so I reiterate my earlier advice that if you decline, it's a service to you and to the firm if you mention that a lowball salary is the reason for passing.

unaegele's picture

Hello TSGeek,

it is not about the others, no matter what money anybody else makes and what the market average ist - Ask yourself:

 

Can YOU/your family make your living with the compensation offered? (if No -> decline politely just as Mark told you)

Are YOU/your family willing to do/accept the hard work for the compensation you were offered? (if no -> decline)

Will this job make YOU/your family happy? (if yes -> accept the offer ;o)

It is that simple. This decision is about you, your family and your life not about the market. Mike and Mark gave all the hints about estimating your 'market value' to prepare you for interviews, but they did not say that the compensation is the thing that will make you accept or decline an offer.

Best regards

Uli

Mark's picture

I already recommended he turn down the offer.  All I did in the last post was tell him what part of his analysis was flawed.  Since his original post bolded ONLY  the "well below" part, why isn't it reasonable to educate him that his definition of market is flat wrong?  We not only have to asnwer the question put to us in our forums, we also have to teach where flawed thinking will lead someone atray the next time they face a smilar situation.

If I were to have led him to believe that the only reason to turn down the offer this time is because it was LESS, and then next time he gets an offer that is equal but he turns it down because it's too low relative to the market when his analysis of the market is wrong... an ouch moment for me.

He's right to turn down the offer for the first reason...he's a better professional for understanding the bigger picture.

Mark

tsgeek's picture

... but those who know me well are aware of that character flaw.  I'm working on that one. ;-)

Lots of great points all around.  I agree most with the point that we may all be over thinking this.  I honestly wasn't looking for feedback on my market assessment, mostly because that's my problem and not anyone else's.  If I'm way off base, I'm the only one that gets hurt by it.  It's not like I'm touting Manager Tools as the basis for my analysis, so Mark and Mike would need to make sure I'm not misusing their good name.  While their ideas will provide additional data in my analysis, I'm the one risking my reputation, so I can take their input and decide how much weight to give to it.  Mark and Mike spend far less time on how to conduct market analysis than on other skills, so I've developed a network of people I trust around those issues, in addition to other resources.  Mark, you may well be completely right and me completely wrong; but I assume you would agree that putting trust in a network you've worked to develop is a good thing.  How to conduct market compensation analysis might be a good future topic/series to cover.

What I intended to ask was for some opinions on what to do if you receive an offer that you believe to be well under market expectations (whether the belief is accurate is my problem, so assume it is for the sake of the question).  Are there ever scenarios where you would negotiate the compensation, and if so, how far off would the offer need to be to justify the negotiation?  How would you go about it?  I added in the elements of the offering company being a heavily mission-driven non-profit to provide some context.  They're not just a profit-driven organization trying to get the best deal they can (although I don't doubt that plays some part in every company, for or non-profit; just like it is for job seekers).

If your opinion is that negotiation is still not an option, what are your suggestions for politely declining while leaving a door open for something in the future.

I feel very good about the ideas shared here around those issues.  Based on all the feedback, I think I am well prepared to complete the assessment of the offer and handle the situation depending on the ultimate decision.  Thanks to each of you!

I' m always happy to stir things up a bit.  You're welcome. :-)

afmoffa's picture

Hi TSGeek:

I think it's fine to ask for more money (I'll leave the strict definition of "negotiation" to more experienced folk), so long as this is a job offer you are comfortable passing up at current terms. Holding out for more money can get you into problems if it's a job offer you really like (or the only one you have).

My original post suggested you thank them, mention a specific thing you like about the company, pass on the offer, tell them money was the reason, and close your letter by inviting them to get back in touch if/when their budget improves. I think a company that really wants you will see that as an invitation to revise their offer upward.