You normally think of candidates moving up the corporate ladder. What happens when they start to … [+]
Our brains are wired to think about our careers moving up the corporate ladder over time. A manager, becomes a director, becomes vice president, becomes president, etc. But if you think about that structure, there are a lot fewer jobs the higher up the ladder you go. An example of a typical company might have 125 managers, 25 directors, 5 vice presidents, and 1 president. So the odds of moving up are not really in your favor, with 80% fewer positions on each subsequent level. But people have to earn their living. What happens if an employee has to go back up the ladder to find more vacancies? Is that a good idea for you to consider that candidate a hiring manager? Let’s find out.
Does the candidate have the right skills?
In this post, let’s talk about the sales department as an example. Most “higher ladder” sales managers have been “lower ladder” salespeople at some point in their previous careers. So it’s very likely and logical that a sales manager most likely has the knowledge and skills needed to be successful again as a salesperson. But just to be clear, the job of a sales manager is completely different from that of a salesperson. The salesperson maintains customer relationships and closes sales throughout the day, and a sales manager manages and guides the salespeople throughout the day to ensure they meet their agreed-upon goals. So making that shift up the ladder really means taking on a completely different job. You just have to be sure that the candidate really wants that change.
Is the candidate willing to do the required work?
To continue this example, once a sales manager gets used to the duties of a sales manager (more in the office, less travel, less repetitive tasks, the prestige that comes with the role), it is really hard for many to come back in a quota that affects the role of sales producer. But that’s a more general guideline. There are exceptions to that rule. Perhaps a sales manager was promoted and realized that he doesn’t like directing people, preferring the “thrill of the chase” of a salesperson. So it is very important that you ask the right questions during the application process to ensure that the candidate will be truly happy with the work required in that “lower ladder” position. Understanding that many will say what it takes to get the job so beware of the buyer.
Does the candidate have the right reward expectations?
In addition to switching roles at lower tiers, the fee is typically lower at lower tiers. Let’s say the vice president made $150,000 and now they’re looking at a director-level job that makes $80,000. Once an employee is used to living on a higher salary, it is really difficult for him to make ends meet with a much smaller compensation. The only time they succeed is when the role is combined with material other incentives (such as an aggressive commission plan or equity to make up for the difference), or when they are older in their careers (after building a large savings account to from, and may be self-conscious of their need to realign their target role and reward expectancy in order to have a better chance of entering work at their age).
Should I be concerned if a candidate is willing to accept a pay cut?
My immediate answer is yes, someone willing to take a pay cut can certainly be a cause for concern. But that doesn’t necessarily mean it’s a deal breaker. As discussed above, if there are other incentives, or if there is a logical “story” with this candidate, you might be fine. Remember, what you gain with a “higher ladder” candidate is all those extra years of experience that come with it. So if you can get comfortable with the situation, it’s like getting a Porsche for the price of a Toyota. But again, buyer beware.
Does the candidate present a right of flight pending another position?
Based on my experience hiring people over the years, once someone gets used to being paid at a certain level, they will try to maintain or exceed those levels in future jobs. So if they take a job with you for half the fee, without a good “story” or incentives to match, that opens the door for those candidates who keep looking for new jobs even after they’ve accepted yours. But again, that’s a general rule of thumb. That may not be the case in all scenarios, so do your due diligence and make a judgment. For example, someone nearing retirement and looking for their last job before retiring may be just fine and worth the risk.
Will they have the right energy for the job?
In general, a person’s energy decreases with age. But that is not always the case. I have worked with many people in their 60s whose energy levels exceed that of people in their 20s. Another way to think about this: older “top ladder” workers tend to be more efficient at how they work, so whatever you think they’re missing out on in energy, they should more than make up for that risk with efficiencies they’ve improved with their previous years of experience.
Is it possible that candidates coming back from the ladder will result in a good result?
As you read above, many things have to go right before someone goes down the ladder again in order to achieve a good result for your company. But that doesn’t mean you should close the door to that scenario in all cases. You have to judge each candidate on their own merits. What is their “story”? How do they answer your questions about the above topics? Do you believe they can live on a smaller fee and have the energy and appetite to be successful in that “lower ladder” job? This situation is fraught with potential pitfalls, but it certainly can turn out for the best. Do your homework!
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George Deeb is a partner at Red Rocket Ventures and author of 101 Startup Lessons – An Entrepreneur’s Handbook.
