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To hire at lower prices.

with 2 comments

To hire at the lower price, a good deal?

Recently, I attended an event organized by a recruiting partner. These events are always the opportunity to meet colleagues and to exchange news and informations about the business trends. If we can hear and read about better results for the economy, it seems that the situation remains difficult regarding the job offers, even for permanent jobs than for interim management opportunities. I was discussing with a colleague looking for new opportunities, and she told me that she received some proposal and had some interviews, but that the offered salary for a proposed job was ..40% lower than her last salary! On the other side, I read in some newspapers than top salaries apparently remain unchanged compare to before the financial crisis. Where is the mistake?

For the time being, there are a lot of available candidates on the market, which has a negative effect on the salaries level. And of course, companies try to hire the cheaper candidate. But is it really a good deal to hire somebody with the minimum salary, and for some candidates a lower salary than their previous assignment? Maybe on a short term basis but what about the long term?

The question is what about the project of the company. Does the company wants to have a long term collaboration with the employees? If the employee finds an opportunity where he can have a better salary, he will leave the company. This means that you will have to hire somebody else, spending and loosing time to restart a recruitment process, and increasing your recruiting costs. More than this, the time spent by your employee during the few months he worked for your company is a pure loss, and a part of the know how is lost.

A recruitment process should include the same criteria than an investment. One parameter is the price, but the other parameter is the quality of services I will get for the money paid. You want to have the better ration quality-price, but think about the quality you really want to contract. Think also about the motivation of your employee. The salary is a part of the motivation, and the productivity and the work quality will probably be better if the salary level meets the candidate expectations. Think also about the fact that a long term collaboration with a candidate means a better knowledge and control of the processes, the business, and gains of productivity.

The solution to give the lowest salary is not the best one on a long term basis. As an investment, you will analyze the return on investment you will get from the disbursed amounts. Consider your employees as an investment, on which you can expect a good return. We never talk so much about human capital than now, but human capital seems still to  be stillconsidered as a cost and not as an assets. By paying bad salaries, you underestimate the human capital. And as you know, if you pay peanuts, you will get monkeys.

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Written by Eric Saint-Guillain

October 27, 2010 at 21:58

2 Responses

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  1. Dear Eric,
    I do agree on your comments on the possible short term partnership between employers and managers and the relation with the salaries important price fluctuation in financial crisis as today.
    Further more, employers discounting the salaires want the full knowledge of the manager, even if the job level is lower and therefore at a lower cost.
    I would like to inform also that the overtime are still requested and wanted with those lower conditions.
    Waiting for the financial crisis to be over in order to move on with the real job been back in equilibrium with the salary and conditions package.
    Best regards,
    Evelyne

    Evelyne

    November 1, 2010 at 14:03

    • Dear Evelyne,
      Thank you for your contribution. Overtime and flexibility are indeed often requested, which is sometime understandable. But the passion and the motivation have to remain on mid and long term. It means that there must be a balance between work hours, recognition, objectives and salary.

      Good luck 😉

      Eric Saint-Guillain

      November 1, 2010 at 15:40


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