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Why people work for less pay or below market rate

There is a recruitment belief that there is always someone better and cheaper out there. This pressures applicants to reduce their rate and have their perceptions of ‘worth’ shaped by a biased interviewer.

Ask Why

Asking why companies withhold salary ranges from recruitment adverts has quite rightly, resulted in a ripped can of worms.

Unfortunately it appears true that companies who require secrets do so because they have weak internal processes and often do not operate according to the values that they claim.

Recruiters argue that stating ‘market related salary‘ is adequate – however the market can use coercive power to undercut individual demands. When you research salary ranges you’ll find that the range is so vast that in the end, you can only reference an organisations direct competition and their own history.

Is ‘Market Related Salary’ corporate hustle?

Yes.

It’s unprofessional to withhold salary ranges prior to an applicant’s effort, particularly to new market entrants who often attend interviews at great personal cost. Withholding information means already vulnerable human beings are encouraged to waste money investing in an interview at a company that doesn’t value the applicant’s dignity or inspire trust.

The Recruitment Anthem: There’s someone cheaper and better out there

‘Market related’ refers to current trends. When we refer to market related salaries – it’s what employer’s offer for particular skills sets. Information is collected so that applicants and employers can see emerging patterns across industries for skills sets.

If there are plenty people with your skills – you’ll be pressured to reduce your rate in order to be ‘competitive’ in the job market. You want to have a scarce skill.

Vacant posts are not always a sign of opportunity. Sometimes a post is vacant because the organisation refused to offer a market competitive salary and they couldn’t find someone to accept the position.

When you research a particular position, be aware that the same title may refer to diverse roles across a range of industries. Be sure to narrow your comparison down to what different competitors are doing in the same sector.

The image below was published in the Keep Climbing post What does Truworths pay and is it market competitive?  When a company hides behind broad sweeping statements such as ‘we pay market related salaries’ it’s vital that you investigate what this means to them. Each company will define ‘market rate’ differently in order to find their ‘someone cheaper and better.’

 

Data from ‘Indeed.’

Willing to work below ‘Market Related Salaries’?

The image above illustrates that there’s a vast salary range between employees with the title ‘Sales Consultant.’  For many of you the reasons for this may already be obvious as sales consultants are in diverse industries – from banking and retail to hardware.

Let’s list reasons for accepting a job that doesn’t offer a competitive salary, in other words, below the ‘market rate.’ Please add to this list if you can.

Positive

People often prefer to be in a job or company they love even if it pays a low-ish salary.

  • Maybe a low paying job is closer to home. You walk to work, avoid traffic and possibly save R1000 p/mth on transport
  • you know someone who works there and they love it
  • you want a job where you can be yourself
  • perhaps there are other perks and benefits offered to employees that make it worth it (such as commission, free food)
  • you’re new to the job market and willing to start low and aim high. (nothing wrong with that!)
  • you like the company’s reputation and corporate culture
  • you don’t care what’s offered because it’s tough out there and it’s well known that the easiest way to land a better job is to be currently employed. This is part of your plan to be where you eventually want to be.
  • you can afford to select a job based on needs not directly related to income. Meaning you have achieved a level of financial stability which gives you the freedom to choose a job based on other factors, such as a need to be productive.

Negative

Sometimes people regret their decision to accept a job. Often this is because they fell victim to some or one of these:

  • perhaps they didn’t draw up a budget and explore how much they need for living and work expenses
  • didn’t research market related salaries, so no understanding of worth and accepted the position assuming fair treatment (no organisation requiring secrets can be trusted)
  • you were too shy and inexperienced to negotiate with a recruiter
  • you were vulnerable and probably left to believe there was no other option

Companies in the Low Salary Ranks

Low salary doesn’t always mean bad ‘exploitation.’

In the world of commerce, exploitation is an acceptable business term that, when used appropriately, indicates profitability and sustainability.

Applicants must ask – should this be at my expense?

  • It’s at this point that an applicant can define their negotiating strengths.
  • You need to leverage what you can do to save the organisation money while still earning a market competitive salary.
  • Understand exploitation and how to use it to your own advantage.

Some companies are small and can only offer limited salaries. When you attend their interviews, ask them about their growth vision – if there’s none then taking a job there could be very limiting.

  • But if they communicate a growth vision that could lead to better opportunities for you – take the chance.

Rushed Recruitment

Although labour legislation protects employees to a certain point, those who sign contracts before ensuring they are correctly informed are asking for trouble.

  • If a company says the interview and job training happens on the same day – step back and consider why they would want to rush you through a labour process.
  • And if you are rushed into accepting a contract, you are entitled to a cool off period.

Find MRS Information

Use these sites to research market related salary ranges for the positions you are applying for.

www.payscale.com

www.indeed.co.za/salaries/

www.careerjunction.co.za/

View useful documents

https://www.careerjunction.co.za/downloadindustrytrends

cj-marketing.s3.amazonaws.com/South-Africa-Salary-Trends.pdf


More on recruitment issues at these links

No Salary Advertised? Call first

Explains why withholding information is abusive. Please read and be informed!

How the public feels about non-disclosure of salaries in adverts

Comments from Face Book and LinkedIn friends.

Truworths Responds to Recruitment Criticism

What they said to me and what they’d say to you.

When companies defend secrecy – investigate

Truworths claimed to offer market related salaries. I explored their claims.

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