48

Context

I had a phone interview recently for a rather technical position with very high skills and quite extensive expectations in terms of output (research papers and quantitative analysis etc.).

The job looks great, and the whole sector they are operating too. However they are 40-50% below the market rate. This is not a start-up or a small company, but rather an important international group.

The company is trying to create a team of a dozen of person locally and have only succeeded to find one person in months.

My take

My main suspicion is that they pay rather poorly, and to be honest I'd be happy to join them, but at that rate it's a pass.

To provide some context, they give the same salary for a mid-level position that grocery delivery companies pay their drivers.

My question is

Should I tell them that they pay way too low or not pay attention and politely decline ?

  • Yes that is exactly why I framed the question like this. Because I don’t know if they realise that they don’t grasp the context of the country they are hiring people for. But I get that my role should be focused solely on MY application and not wandering on their budgeting decisions on recruitment. – Non-formatted Date User Dec 20 '19 at 16:06
  • Is your main intent primarily about your own salary, or to tell them that in general they're paying way below market so they're not going to succeed in putting a team together, or at least not a good one, such that you wouldn't want to work there? – smci Dec 21 '19 at 11:32
  • 3
    50% below market rate sounds like the position might be in a different location. Are you sure you're looking at the same "markets"? – Mars Dec 23 '19 at 10:52
  • Have you seen the total compensation package? It is possible that there is significant non-monetary compensation on offer to make up for the low salary; this is reasonably common with startups. Whether that non-monetary compensation would be worth the salary reduction to you, is for you to decide. – asgallant Dec 23 '19 at 18:43
101

If, by "tell them they're below the market rate" you mean that you intend to communicate something along the following,

You've offered me $X, but I cannot accept a salary lower than $Y, which I find to be the market rate for someone with my skills and experience.

it seems perfectly legitimate, and a normal part of negotiating a job offer. But be sure the focus is on you and what you're worth (or, at least, what you want). Making it an argument about "market rates" just invites discussion or justification without any progress - you're opening the door for them to defend what the "market rate" is, instead of making the conversation about your salary.

However, if you have no intention of accepting the offer, and you're wondering about informing them purely for the sake of informing them, there doesn't seem to be a point. They probably won't consider a candidate's appraisal of "market rate" to be meaningful (compared to whatever work they've already done to determine the rate they're willing to pay) and a communication like this without the intent to accept the offer comes off as not very genuine.

So - consider your motive. If you're interested in negotiating, then go ahead. If you're just trying to discredit their offer, it may be best to just move on.

  • 11
    I would hope that after months of interviewing and only being able to fill one of twelve positions that the interviewers would listen to the reasons given to them as to why they cannot fill those positions. If they had actually done any effort to determine the market rate they wouldn't be offering half of it. Even 5 minutes of research would have gotten them closer than 50% away. – Josh Dec 20 '19 at 19:59
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    @josh the interviewer is part of "the market". Maybe it's the OP who doesn't understand the role description. – aaaaa says reinstate Monica Dec 20 '19 at 20:48
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    @aaaaasaysreinstateMonica Key word being "part of". They themselves are not the market. Maybe OP doesn't understand the role description. Thats an iffy maybe at best. But if dozens of applicants over 6 months "dont understand the role description", whatever that is even supposed to mean, then the problem is on the employers end, not the applicants. The interviewer is part of the market, but its the part of the market that cant seem to fill its positions based on the offers it is putting out. If aren't at least curious why they cant fill these roles then the project is doomed to fail – Josh Dec 20 '19 at 21:01
  • I guess the point is, you need to string together a whole lot of "maybes" and other assumptions to get to the point where telling the employer will have a clear and positive outcome for the OP. What if they already know they're underpriced, but can't afford anything higher? What if the underpricing is actually deliberate for some reason? What if the OP is totally wrong about market value? What if they're having trouble hiring for other reasons? What if the salary is low, but they have great benefits that make up for it? It's not really the candidate's responsibility to figure any of this out. – dwizum Dec 20 '19 at 21:09
  • If you say something purely with the goal of "informing" the employer, (especially if you word it in a way that paints you as a market expert on salary pricing), you risk coming off as pretentious and damaging potential future opportunities with this recruiter and/or employer. And that risk is not offset by any possible gain. I think this is one case where it's okay to be selfish (by not saying anything) versus trying to help. It's totally okay to just say "I need X salary" without taking on the responsibility of trying to help the employer correctly price their jobs. – dwizum Dec 20 '19 at 21:11
29

Disagreeing with most other answers, I recommend mentioning the market rate; additionally to your own salary expectactions.

These factors play a huge role:

  • They pay significantly below the market rate
  • They need to hire new people into your team
  • The non-financial factors of this company do not attract enough talent by themselves.

For simplicity, we're going to assume that they offer you an acceptable salary and you do accept the job offer.

Now what? The company, offering 50% of the market rate, either hires sub-par colleagues into your team or none at all. Either way, you won't get beneficial colleagues. Your research progress will be slow and you're going to be at a high risk of becoming frustrated.

On the other hand, if you mention what the market rate is, you can try to read their response. This is, of course, not reliable but it does give the company a chance to recalibrate their salaries, including yours.

  • 3
    This is a good point, even if they offered the asker individually more, budgets unrealistic for the asker's locality are indeed likely to cause other ongoing problems in trying to actually work for them. – Chris Stratton Dec 21 '19 at 20:39
  • This. You have nothing to lose anyway since you're already ok with walking, and if the hiring manager is reasonable, he won't see this as some kind of affront to his judgement. – user2647513 Dec 23 '19 at 18:12
14

Should I tell them that they pay way too low or not pay attention and politely decline ?

If you feel that the pay is too low for you you have two options, decline the offer or ask for more money.

Forget about market rate, your argument needs to be centered around what YOU are worth to them based on your skills and experience. If they cannot meet your rate then politely decline. If they ask why you are declining, you can mention that the pay was not satisfactory for yourself but you really don't need to give an explanation.

  • 1
    "Forget about market rate": On the contrary! The only measure of "worth" is this context is in terms of money, and the only measure of the value of money is in what people are prepared to pay for something, i.e. the market rate. That goes for apples, cars, labour, actually everything for which money is paid. So all you have to go on is the market rate. – Reversed Engineer Dec 23 '19 at 14:33
10

The company is not going to negotiate a salary which is 200% of their proposal, that's not reasonable. So you're going to pass on this position.

Personally speaking, whenever I pass on a position (or anything in life really) I like to give the offering party a reason as to why I am passing. If being passed over in job offers is a pattern for that company (and it seems like in this case it is), it is a show of good will to explain to the company what might be wrong with their offer that is causing them to not get good talent. So I would tell them:

Thank you very much for your offer. Unfortunately, the salary you have proposed is somewhat out of line with the market rate in [my locale]. According to research I have done (include any other details you have here, e.g. previous jobs, other offers, friends you have who work in a similar industry/position), the expected salary for someone in this position should be around $X, whereas you have only offered me $Y. Because I know $X is probably not a reasonable amount of money to ask you to pay me, I'm not going to bother negotiating, but in addition to passing on this offer I'm just letting you know: If you want to hire good talent in this area, you're probably going to need to offer them a salary much closer to $X next time.

Thank you for your time.

  • 23
    Umm, no: the salary increase would be 100%. A 200% salary increase from $10,000 would be $30,000. – TonyK Dec 21 '19 at 2:02
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    @nick012000 200% of their offer is a 100% increase – user92235 Dec 21 '19 at 9:44
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    Would you describe the salary they're offering as a "100% increase" of the salary they're offering? Or half of that salary as a "50% increase"? – BenM Dec 21 '19 at 10:42
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    @nick012000 A 1% increase is never less than the original amount. There are no other ways to define a 200% increase. – pipe Dec 21 '19 at 12:52
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    "x200% is just as valid as +200%"? No. It is not. To say that is to make the whole idea of "percent increase" meaningless, because you'd always have to have to express the change some other way in order to clarify which of the two incompatible meanings you had in mind. – David K Dec 21 '19 at 23:22
4

It's not likely that they don't know what the market rate is, but you don't need to address that with them directly.

If you're interested in the position simply reply to them "I'm interested in this position. My expected salary range is X".

If they don't work to get you something close to your salary range or if they outright refuse to entertain it, then move on.

4

However they are 40-50% bellow the market rate.

There's nothing wrong with stating general facts of the market, especially when the other party is so out of touch with reality that the conversation is going to end quickly.

Perhaps citing that won't result in a change in their offer, but it doesn't sound like you are actually trying to negotiate this to something that will work for you as it seems like you recognize they have not been willing to offer what it will require to secure the talent they seek. And because it doesn't seem like you are trying to negotiate, you're not going to be a continuing participant in any attempt they might make to argue against the reality of those facts - they'll only find themselves arguing with your spam filter, because if they persist in an unreasonable position after you have given your reasons for declining, you click the button to block them.

And even if you were trying to negotiate, facts of your location are not at all irrelevant. By all means concentrate a negotiation on what number you need to change from your present employment, but supporting that with local salary / rate data is not going to be counterproductive.

Do whatever you feel best doing, you won't gain anything by "educating" them about the reality of your location, but it's not going to hurt you to do so either.


Many others have given you a different take that would be more applicable in the situation of a potential ongoing search to find a role for you which might be made by a recruiter who unlike the one in question did regularly work your local market. In that case, keeping the emphasis on your needs would be good to help them determine what would and would not be a fit for you. But also in that case, you probably wouldn't be asking this question - because a recruiter regularly working with positions that would be a match is going to have a reasonable sense of what the going rate is, with mistakes confined to misreading your level of experience or "fake" requirements that are specifically intended not to be able to be filled.

Or to put it another way a recruiter who has market rate positions to fill isn't going to waste their time pursuing people for unfillable ones. Say whatever within reasonable politeness you like, and don't let someone who has no idea of what is fillable in your area you waste more of your time either.

3

I think something else is going on at this company, based on my experience of both sides of this one (recruiting manager and applicant) TLDR - don’t waste your time with feedback, it’s politics and not your fight. Only communicate if you are asking a genuine question.

Longer: in an “important international group” it may be wrong to think that there is a common viewpoint within the company of hiring and salaries. Such companies are often very fragmented and consist of empires within empires. My experience was of a very large European aerospace company (the obvious one).

The hiring manager may have a picture of what they would like to achieve within the company, but they may not have any real buy-in from their own management of the job-levels (and salary) of what it would take to achieve that. So, they may be fairly untruthful with their own management in getting the “allocated headcount” and even more so with the applicants, telling them whatever they want to hear.

In my case as an applicant, I was recruited at 25% below market rate to “head up and start a new department”. I accepted because the technical area was so interesting. The actual job when I turned up wasn’t what I was sold by the hiring manager. It matched the salary, not the job description. There was no strategy at all in place, the starting team of “two or three” turned out to be a single summer student plus somebody seconded to another project in another country, it was just a desk with a phone and laptop. It later turned out that my boss literally didn’t even have a budget for that desk and phone - I had to find ways to sort that out for him from other project managers budgets. The wonderful job title was pure grade inflation.

“Human Resources” in a company like that is just doing the paperwork. They have no connection to the decision or outcome of hiring; any feedback you give just sits in a contractors inbox. There isn’t any mechanism for feedback to get to a decision maker.

Oddly enough, because I am the most stubborn person imaginable, I stayed for five years, and built up a new department of ten people from nothing, through sheer graft and hustle, with zero support from my boss.

Along the way, I did what I had to do, and I’m ashamed to say I told similar half-truths to internal project managers and external applicants as I built up the business. Because it was the only way to make stuff happen. The company culture was deeply toxic. Fortunately, the department I built was successful in my hustle, and those half-truth chickens never came home to damage anyone.

It was hell, and honestly I mostly just did it because I couldn’t admit to my wife and friends that I had made a mistake taking the job. Was it rewarding? I’m kind of glad I did it, just to prove that I could. Would I do it again? Hell no.

Notice how nothing I’ve said is anything to do with salary. On the one hand, the satisfactions or pains of a job often matter much more than the salary. On the other hand, the salary is the one thing they can’t fudge* as to whether the role matches up to what they are telling you.

Back to “what can/should you do”? If you’ve decided that you are no longer negotiating for this role (because this will kill it, but might set you up for something else), you can say something like this: “I’m looking for a salary at least £X, based on the skills I demonstrate in my current role and the value that I can bring in future roles. I think I’m ready for a step up in responsibility [Cough Big Companies Love Flattery, Cough], are you looking to fill any more senior roles?” Reason why I suggest this - they might be about to advertise an adjacent role in what you would normally not consider a match, or even “too managementy” if that’s your inclination. But, they’ve basically told you that the job description they advertised isn’t what they are prepared to pay for anyway.....so you might find that “the next step up or two” (in their minds not yours) corresponds to the type of job you want and think you applied for. And that one will also be unfilled for exactly the same salary reason. And secondly, this will not be responded to by the hiring manager for the first role, but by a contractor HR person who has no skin in the game. As far as they care, if the recruiter wants to know which vacancies are open, they will tell them and send the job spec. Which might well be unfilled for the same salary reason, because the job description is.....optimistic....and the right people aren’t applying. Then, maybe you get an interview for the other role and see.

  • +1, particularly for the last paragraph. In my experience (as an interviewer on the hiring side), sometimes a company/manager doesn't know what the going rate is for what they want, and IS willing to pay 2x as much as they've offered. Such as when they only have a couple developers on staff. – Matthew Elvey Dec 23 '19 at 8:06
1

Your question was should you tell the recruiter.

A recruiter (agency or in-house) is trying to find you a position acceptable to both yourself and a company. You should tell the recruiter your price bracket. Your minimum and your ideal maximum.

If the recruiter comes to your with a position below your price bracket, then you must repeat to them what your minimum is. Don't give a reason. - If they ask for a reason, then you can say based on the market rate and the level of experience you bring, you feel no less than $x amount would be fair.

  • You've written this from the perspective of dealing with a recruiter trying to match a candidate to a variety of positions, where giving them a personal need to compare against would help that search. But the question is actually about someone contacting a variety of candidates to fill a particular position - and apparently someone who does not frequently "shop in the market" of that locality for talent and is thus out of touch with its reality. What you are saying isn't wrong for the context where it would apply, it's just not all that relevant to the question. – Chris Stratton Dec 20 '19 at 17:38

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