A salary difference of $5,000 can seem like a lot of money to a job candidate, but it’s really not going to make their paycheck that much bigger. After taxes, a single person earning $105,000 can expect to see about a $120 jump per paycheck if they get a raise to $110,000 — not life-changing money at that level.
So why would someone ask for $110,000, get an offer at $105,000, and walk away, without even attempting to negotiate?
Justis Pederson, President and CEO of the Pederson Group, a recruitment firm, explained why one of his candidates walked away from a job offer. He wrote:
To keep reading, click here: This Candidate Declined a Job Offer Over $5,000. The Reason Is Instructive for Any Employer
I don’t understand why companies do this. On the Company books it’s a rounding error, but to the employee it shows that you want them.
I can definitely appreciate the mindset of that employee who received that offer of a lower salary than wasn’t even accompanied by an alternative benefits to compensate for the salary decrease. Labor costs have become the one area where the company wants to spend the least and yet demands more efficient performance without realizing that to maintain that efficiency level demands using a bare minimum of bodies employed has a cost that cannot be cut just because the cost eliminates/lowers the bottom line profits for the shareholders who contribute nothing but demand for the business models. I now understand why the cost of the H1-visas needs to rise because businesses need to understand that they are employing people not slaves and by only paying cheap wages they are only hastening the demise of the company. If they really want to save labor costs—stop overpaying their top executives.
In addition to all of the other things, if a company is going to lowball me when I’m starting and have the most leverage to walk away (my current paycheck isn’t coming from them / I can keep looking without risking job hopper status), why on earth would I trust the company to provide fair COLA / merit raises? It’s not just the 5K annually, it’s all the annual raises that aren’t going to happen, which will then peg my next job at a lower amount (yes ideally new job is paying fair market wage, but it’s a lot easier to say my current salary is X, to move I need X + 10-15% than my current salary is Y, to move I need Y + 20-30%).
Respect in the job market is measured in units of USD. The gap wasn’t just one of $$ but also respect. If the candidate had any idea that the actual salary range for the position was above what they were offered, they would have felt hugely disrespected. Lowballing an offer to “prove he actually WANTS to work for us” isn’t what respect looks like, and even if this candidate did accept, the risk of them learning that they were lowballed vs the actual salary range would be a cancer waiting to go metastatic. People do learn such things. It happened to me many years ago when I was fresh out of school. My company had a generic salary offered to people coming straight from school with my set of credentials. Everyone got the same number. Except me. I had accidentally been offered $1500 less than everyone else, and I really believe it was an accident. I did figure it out, though, and I almost quit over it. It wasn’t the money, it was the disrespect of paying me less than all of my peers.