John is really a really good salesperson. But he has created a real problem for himself. He spent the first seven years of his career with the firm that significantly underpaid him. So, three years ago when he decided to leave them, he made a commitment to “make up” for the fact that he had been, or felt he had been, underpaid.
In the kind of business he is in he hit the market at a great time and got three or four job offers….even rare then. He decides to go to work for the firm that offered him the most money. He was insistent on making up for his perception of his being underpaid. The company that offered him a job back then paid him $30,000 a year more than any other offer he got. Obviously, very significant! And, at the time, no one could really blame him for taking the job.
Often times, though, it never crosses a job seekers mind to ask, “what’s wrong with this picture?… Why would someone pay me $30,000 more than anyone else?” Most candidates always attribute that kind of offer to their dazzling brilliance, amazing potential and phenomenal personality. They rarely think objectively and wonder “something’s wrong here.”
The people that hired John did, indeed, need him to manage one very significant, major account for them. He did a great job…. until, nine months into the gig this “loyal, major account” decided to stop using the services of both John and his employer. John was hired to manage one, special account and the company didn’t have any other job for him, so when the company lost the account, they laid John off.
John knew that he was being a little overpaid for the job he was doing, but, after all he did do an excellent job for his company until the client change their mind. Now, John wanted to find another job making the same kind of money are more than he had been making. This approach automatically eliminated 90% of the opportunities that John might have in his line of sales because most of the people in his profession were willing to pay him the kind of base salary and commission he had been making.
So, John found a company that needed him really badly to establish a brand-new division in their company. They were willing to pay him a higher salary and commission than most anybody else because they needed help in establishing the new division. So, the question of “why would a company page on that kind of money?” was answered, “because they needed him to establish this new division and they were willing to pay more than the job was really worth to get him.”
One year into the new division, John’s new company decided they didn’t want to be in the business that John was doing. So, they laid him off. Now, John has had two jobs in two years.
Last year, John was on the market again, got three decent job offers. He decides to go to work for an organization in the business that he was in who was building a brand-new office in Dallas. They not only paid him an extremely high salary, but they also gave him a very high nonrecoverable draw. John did an excellent job for them. He was making a lot of money.
Unfortunately, the company hired a branch manager and a couple of others salespeople in the same manner they hired John. They wanted to establish an office quickly, so they overpaid every body to build the office. This is not an uncommon thing for companies to do. However, Covid came along. The company John worked for lost one of its largest national accounts that, incidentally, didn’t have anything to do with the Dallas office, but the Dallas office wasn’t making a lot of money… they were overpaying every body to get jumpstarted and since the office had only been open for a year, it couldn’t be expected to make a lot of money, so they closed the Dallas office, laying everyone in the office off.
So, now John needs a job and he is asking for the same amount of money and draw that he got one year ago to help open an office. He’s had three jobs in three years and asking for the same amount of money he was getting pre-Covid. Even though all of these three companies “left” him, it still doesn’t look good. He can’t really share that the reason he went to these places was because they were the “highest bidder.” People really like the guy but the whole thing is hard to sell.
The best of the firms he is speaking with aren’t going to pay as high as he was making. They don’t have to in this market. Now they are concerned if they hire him at what the market value is, like 20% less than what he was making, he’ll stay with them for a short while and then if a higher bidder comes along, he’ll leave. The truth is he couldn’t afford to do that. John has to be at this next gig at least four or five years. So, unless somebody “leaves him” he isn’t going anywhere. But it is really hard to convince prospective employer of that.
So, it’s really obvious why it isn’t always a good idea to go to work for the highest bidder. Two of these people paid John more than what the market dictated because there was a risk in the job. No company ever tells anybody that, “we’d like to try this for a year but if it doesn’t work were going to close the office.” I will admit that these are very difficult and precarious times and the probability of this kind of thing happening again isn’t very great. It’s all real unfortunate.
Whenever the job seeker gets an offer that’s substantially more than the rest of the market, most of the time it goes to their head and they think it’s because they are so damn good. But every job seeker in a situation like this, even though they need the money and want the money needs to take a deep breath and ask themselves, “what’s the risk this situation? These guys are paying me more money than the market really would bear…why?”
This kind of situation might be worth the risk. But taking a job because of it has the highest economic payoff doesn’t necessarily make it a good job. Beware of the highest bidder!