People say that buying a home and changing jobs are two of the most stressful events in your life. I agree, and I think it’s because both involve perceptions of value and price.
Here’s a quick story. After eating in, brown bagging, and drinking home brew instead of Starbucks for months, my wife and I somehow convinced a bank to give us a mortgage for our first house. Luck and the market helped us, and five years later, we were in a good position. At the time, the market where we lived was hot so we made an offer on a larger house, confident that we could get out of our first home with a good profit.
Appraisers, real estate agents, neighbors and parents offered opinions on setting the list price. I was inundated with data, comps, and listing histories. The experts kept telling me, “Your house is worth x dollars,” so we listed at that price.
On Day One, we received a slightly lower offer. “Look how brilliant we are,” we all thought. But we also thought the house was “worth” more, so we countered, thinking we could get them closer to the home’s value. Or at least our perception of the value.
We never heard from that buyer again. Ever.
And for a few long months, we had two houses, two front doors, two mailboxes and two mortgages. A few double payments later, when a guy finally offered me a contract for the same price we rejected on Day One, I could have kissed him. Hard.
And I learned a very valuable lesson. Whatever you are talking about, it’s not worth anything until someone will write you a check for it. House, car, blog or career—what you think it’s worth matters less than what the market thinks.
This hits home when you meet the candidate who has a distorted view of his compensation, typically because he is overpaid in his current role. Just like when I sold my house, he has a perception of his career worth, and it will drive what he needs to make a career move.
Keep in mind, however, that not all overpaid candidates are the same. In my experience, there are typically three types:
The Realist–knows she is overpaid, feels lucky and manages her life in such a way that she can take a step back in compensation for a great opportunity.
The Handcuffed–knows she is overpaid but feels stuck and struggles with stepping back in total compensation.
The Clueless—is convinced she is worth every penny she is being paid and cannot understand why no one else in the market agrees with her.
As a Talent Acquisition professional, you can work with the Realist, because she’s easy to manage, if your opportunity has more to offer than just cash money. I have wasted a bunch of time on the Handcuffed—many say they’ll leave for less money, but end up trying to prove they really are worth their current comp package. Finally, just run away from Clueless as fast as you can.
With salary freezes over the last few years, lots of people coming on the market will think they are underpaid, but what they think unfortunately does not matter. When someone cuts them a check, then they know what the market says they are worth. Houses and careers–the market’s in charge, not you.