Tuesday, July 10, 2007

 

Opening Offers, Counteroffers, and a Tip for the Newbies

At my cc, some terms simply don't get used. Some are the predictable grad school-ish buzzwords: “counterhegemonic,” say, or “problematic (used as a noun).” But others are more pedestrian: “surplus,” “abundance,” “counteroffer,” “merit raise.”

We don't do counteroffers or merit raises. Salaries rise for the just and the unjust alike.

In some ways, it's a great system. I don't have the agonizing decisions about whom to alienate, and we're spared all manner of really dreary conversations. Raises are negotiated at union contract time, and that's that. From the union's perspective, it's good for solidarity, and it ensures that a pinhead manager can do only so much damage. (More cynically, it also protects the employees who carry the least weight.) From the college's perspective, it makes budgeting relatively straightforward, and it allows us to redirect energy from invidious distinctions – however merited – to efforts to improve the college as a whole.

But there's a nasty little catch.

If a new hire doesn't play relative hardball at the moment of first hire, that's it. Once you're tracked, you're tracked. If your starting salary is, say, 3k lower than it could have been, that difference will never – never – be made up as long as you're here. If anything, it will slowly compound. If you do a just-good-enough-not-to-get-fired job, you'll get your contractual raise; if you routinely walk on water, same raise.

I've seen other systems, and there's something to be said for them. Some do a pure merit system, wherein everything is up for grabs at any moment. I'll admit even I find that a little scary, since a single bonehead chair or dean could screw up a department for years in one fell swoop. Some divide the salaries into a “cost of living” increment that everybody gets, and a “merit” increment on top of that to be distributed by performance. That strikes me as much more reasonable, since nobody gets left completely in the cold, but there's still an incentive not to retire on the job. Some do across-the-board raises, but have a separate pool of money for counteroffers.

Counteroffers are offers you make to incumbent employees not to leave when someone else is trying to hire them. The market logic of them is clear, even if the morality (rewarding disloyalty) is a bit off. The idea is that somebody's market price can only be assessed by actual offers – once an actual offer has been made, you can either counteroffer or say goodbye. Those who aren't good enough (or aggressive enough, or disloyal enough) to solicit outside offers don't need extra enticements to stay.

I've read that once somebody accepts a counteroffer and stays, the median length of subsequent stay is 18 months. That makes sense to me intuitively. Generally, you don't look if you're satisfied; looking is a sign that something is wrong. Unless money is the only issue, which is seldom the case, then after the glow of the raise wears off, you're still dissatisfied. Honestly, one of my prouder moments as a manager occurred at Proprietary U, where I had a wonderful professor – and a friend – who was desperately unhappy there. He complained repeatedly about how unfairly he was treated, about how the institution was beneath his Ivy League Ph.D., and so on. I made him an offer: if he put a sock in it for a while and stayed on his good behavior, I'd give him every glowing reference he wanted. In return for not being a pain in my neck, I'd help him escape. He accepted, I held up my end of the deal, and he was gone for greener pastures within the year. I got a good, low-maintenance year out of him, and he got a job he actually wanted. It was better for everybody, even though part of me was sad to see him go.

I'd rather go with an internal merit system than a counteroffer system, given the choice. Better to reward loyalty and institutional service than really aggressive job-searching.

But I'd almost rather have either than a pure same-raises-for-all system. Given the dramatic mismatch between our starting salaries and the cost of housing in the area, I don't have any tools at my disposal with which I can say to a prospective hire, “yes, the opening salary is low, but we'll bring you up in a few years.” The salary will go up in modest increments and no more.

I can imagine an obvious retort -- “so raise the opening offers, dummy!” -- but neither the budget nor the union would allow it. To the union, 'salary compression' is unfair to incumbent employees, who are, after all, the union's constituency. And the degree to which we'd have to increase our opening offers to come within range of local house prices is simply prohibitive, even if we were to tough it out with the union.

It's frustrating. To my mind, hiring well is one of the best things we can do to position the college for the long term. But it's hard to hire well when the best you can offer is not just low, but fated to remain low for the foreseeable future. We can't go back and “correct” lowball hires, and we can't raise the floor now to go over the heads of the lower-paid incumbents. We can't even hold out the hope that outstanding performance will be recognized financially. We can highlight the various other benefits of the job, which are real and desirable, but which don't pay the rent or the mortgage.

My tip for the newbies: if the college doesn't do merit raises, go for broke on the opening offer. If you don't, you'll never stop paying for it.



Comments:
When I was hired, I countered the original offer by $5K, promising to give half of it back to the College foundation within 12 months. HR bit! I get $5K I would never recoup in the future (and raises based on that additional $5K), plus $2500 worth of tax write-off. Win-Win!!
 
If only I'd known...

In two weeks, after four-and-a-half years of (staff) service and a sterling track record, I'm taking the first step to Getting Out of Higher Education. I'm done. It's been a slow but steady erosion of the spirit (and the will, and it's been a heck of a challenge to the principles supporting my work ethic seeing the dead weight get the same raises as I). I just received notice that I'm getting a(n unusually high) five percent increase next year but it still won't be enough to ever get me out of the hole that I originally stepped in. They can take it. I'm going to leave it.
 
I think one of the dirty little secrets of the academy is how very low the professor's salaries are. No one tells the eager undergrad that you're looking at a 40k - 50k starting salary after 12 years (in my discipline) of preparatory work. And when we deal with minority students, trying to encourage them to get Ph.Ds, I don’t think anyone is honest about how geographically flexible you have to be to be employable. Most of the students in my area would never move to the Midwest or South for jobs because all of their family is on the West Coast. I think people are so desperate when they get jobs they forget that colleges are increasingly desperate to find people who are willing to do the work for such low pay. Fifty percent of the searches at my school fail (as in, no candidate accepts our offer). But the incumbent faculty are still of the mindset that people are luck to get a job at all. Until we wake up and see how special it is that someone would choose to work with us (given the low pay and difficulty conditions) I think we will continue to waste time on searches that ultimately yield nothing. How low does the success rate have to go before this happens? 30%? 25%? It’s all very frustrating.
 
It's not just academia that works that way.

My first engineering job paid decent rates for the area. After a year they closed that plant and transferred everyone to a different one. My salary was lower than a new hire's (because CoL was higher in the second location), and even with extra merit bonus my pay raise was less than the standard increment for a new hire (because giving me the same wage would break company rules for percentage raises).

Needless to say I was unhappy. Most of us from the old plant ended up leaving -- and at least one engineer quit and was rehired for the same position, getting 20% more!
 
Ivory,

While I generally agree that education’s pay is low compared to other industries, I question your assertion of difficult conditions. In the scheme of things, our jobs are relatively recession proof, clean, and generally safe (my apologies to the victims at VPI).
Yes, we are facing a dramatic change in demographics and attitudes of entering students. But every industry has its challenges. All in all, I’d rather have my job in academia rather than in the dog-eat-dog / what-have-you-done-for-me-lately world of the for profit industry (BTW, if you think colleges aren’t trying to make money in order to gain a competitive advantage, you are grossly misinformed). I’ve seen too many friends go to work in the morning and be jobless in the afternoon; Too many with stress-related illness; Too many working 70-80 hours at XXXXX to earn a bonus they can’t take time to enjoy. At least our overtime can be scheduled at home ;-)
 
Here's the craziest thing I've ever heard of. The 3% COLA raise is given every year. BUT the funds are at the department head's discretion. Dept. head wants to make salaries more equal, so s/he decides to give ALL the raise money to the lowest paid few members of the department. The rest of the department get NOTHING. Zilch. Zippo. Nada. In some cases, for six years. How's that for morale?

True story, though not at my institution.
 
One engineering school in Quebec has this completely bizarre pay system: professors' pay depends completely on professorial rank and the year in which they earned their undergraduate degree.

At least the salaries are reasonable for this area, although other schools do pay more.
 
Anon,

What I mean by difficult conditions is this. Most people who qualify for work at my institution in my department would also qualify as dark horse candidates at an R1 institution so it's useful to compare what they would be offered at an R1 v. what they would get at the institution where I work. At my uni, new profs have a 3/3 load but will increase to a 4 / 4 load by year 4 and will be expected to produce publishable research results as part of the tenure process. At an R1 in my field, you might teach 1 or 2 classes per year but most of the time your grants buy you out of teaching or you team teach portions of courses. New profs setting up a research lab at my college will be offered start up funds that are in the 30k range (as opposed to the 100k-200k they would get at an R1.) Low start-up money significantly impacts their ability to get work done as they can't afford to buy new equipment and must rely on donations from outside sources for a lot of their materials and disposable supplies. Let's not even start talking about our aging physical plant and the frequent shut downs of critical equipment like fume hoods, water - the R1s in my state are building like it's going out of style - new faculty are moved in to brand spanking new labs.

The grant writing requirements are less at my school and you don't have to publish as much. But my co-workers routinely put in 70 hour weeks, mostly in the lab - certainly not at home. If they worked at any of the hundreds of local biotech companies, they could easily make 20-30k more than our typical starting salary and they'd likely put in fewer hours. Add to that that the median home in this area costs in the 750k range and you can see why people shy away from taking jobs at my school. Our salaries are low enough that the after tax income of a first year prof in my department isn't enough to cover daycare for two kids in the on-campus daycare center. If you think that doesn't stop people with kids from taking jobs with us, think again.

I think you have to have a calling to choose this life. New faculty have a very tough row to hoe. When they negotiate salary, they should take as much as they can get.
 
I'm at a cc, and I managed to negotiate a higher salary than I was offered initially. I had to do some legwork, though. I found out as much as I could about the formula used to calculate initial rank and placement on the salary scale (which is based solely on education and experience), and then I sat down and made a chart for my hiring dean delineating every bit of teaching-related experience I had to that point, and I also listed every course I'd completed beyond my degree. I then plugged this info into the school's formula and estimated my expected salary. In the end, this memo netted me nearly $3,000 more per year than I was first offered.

After I was hired, I found out that my school does have one of those unfairly front-loaded pay scales to help attract new faculty. I learned that a senior faculty member (with considerably more education and more experience) was making quite a bit less than me. I realize that within a few short years, I'll be in my colleague's shoes, watching less-qualified individuals step into salaries higher than my own.

It's dispiriting to say the least, and don't get me started on the so-called "merit pay" system!
 
No one's mentioned today's Doonesbury. (Zonker works at a restaurant that pays according to merit. He makes $6.10/hour, about which he complains, so his boss is willing to consider a change to $5.80.)

Dean Dad raises the question of what faculty are worth, then basically labels retention offers as morally lacking. They cause administrative angst and faculty morale problems over equity and parity, and may not even work to retain. So he advises negotiating a good initial deal to get as high up the ladder as possible from the get go.

His advice and maybe even moral code are sound enough in a system of no counteroffers. In the rest of the academic world, which is big, I'm less sure. This may be little comfort to CC or unionized faculty but there are few more problematic morale issues at R1 universities like mine these days than salary compression/inversion. Market salaries are rising so quickly in many fields that it is no longer unusual for active senior scholars to make 50% below market. Like it or not, there is no consistent merit-based adjustment mechanism to address gaps of this size other than outside offers.

(The real problem here is in fields with relatively inactive markets: There aren't enough offers to establish value. In competitive markets, with lots of openings each year at each level, why should academia be different than accounting, law, or restaurants?)

My friendly addendum to Dean Dad's newbie advice is to always keep an eye on one's market value, whether actively on the market or not. Certainly negotiate as well as you can for that first (and subsequent) job, but to hope these medieval, bureaucratic salary adjustment systems reliably work in favor of valuable faculty, or even just work better than the labor market, is questionable. And there certainly is no shame or disloyalty in "looking."

I can see why some unions might oppose counteroffers on principle but I'm not sure why anyone half confident of their value, or their faculty's value, would feel the same.
 
I am a huge proponent of good negotiation when you have an offer. I encourage all of my friends to negotiate as hard as they can, with an attitude of respect, of course. This is especially important for women. Most of my women friends shy away from negotiation, feeling like it is rude.

I hate the whole counteroffer requirement, but there is nothing to be done about it in this climate. It sucks to be on a hiring committee with someone who may not really be all that interested.

We have a merit system, created by the faculty, that is pretty transparent. The good news is that people do work to fulfill the requirements, so as to earn merit. The bad news is that some folks won't go above and beyond; they won't do anything that does not meet the merit requirements. But I like it best.
 
At my cc, not only are pay increases incremental and determined by formula, there IS NO ABILITY TO NEGOTIATE with HR upon hire. They have a matrix, they tell you the offer, and there is no wiggle room. In terms of trying to hire for positions, especially administrative positions where the offers are grossly inadequate, it is no wonder why we have so many empty positions. Housing costs in our area are ridiculous as well. Actually, in that sense, for people who have been there a while and bought houses 10 and 20 years ago, the connection between salary & housing prices works ok. For newcomers, it is unmanageable.
 
One way to fight salary differentials is to give a part of a raise as equal dollar amounts. Those at the bottom get a larger percentage than otherwise, yet everyone gets a raise.

Excellent advice as always, DD, but (as noted in the comment above mine) it might not apply at a CC. I was given similar advice when I took a research job some years ago and it paid off very well.

Salary compression is a major problem in any competitive field. If there is an option to negotiate, fight for every bit you can. Your next actual raise might not come until you get tenure and promotion, and I saw cases where even that got deferred due to budget crises. The effect of compound interest (in percent raises) on an extra $1000 becomes huge over time. It also determines your summer salary.

Our CC has a fixed compensation policy with no negotiation, so your advice does not apply here. Sadly, it does seem to hurt our recruiting in some areas, although could also be the difficulty of getting people to look at us as well as a Uni.
 
I just accepted an offer from a CC, and I negotiated well without realizing I was doing so. I had already decided that I would only take the position if I could earn what I earn now from full-time work and adjunct work combined. Heck, I'm a single parent, I'm not taking a salary decrease for gosh sakes.

I told them what I wanted, and they said yes, without hesitation. I found out later it was at the very top of the pay scale for an instructor. And as soon as I successfully defend the diss and move to assistant prof, my salary goes up again.
 
Great post! Thanks!
 
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