In December 2017 Congress passed legislation known as the Tax Cuts and Jobs Act. Much has been reported in the media about the impact of this event on people up and down the income scale. Notably, there were specific changes included in the new tax law on the treatment of executive compensation. With tax season upon us, you may wonder: Is the Tax Act good news or bad news for high-earning professionals?
The answer depends on several things, including where you live, whether you’re married, what industry you work in and what your income is. Americans at most income levels will benefit from a lower tax rate, but some medium-high earners will find themselves bumped up to a higher tax bracket. (Some earners who were in the third tax tier paying 33% in 2017, for example, will now be in the second to top tier paying 35%.)
In general, a majority of Americans in the middle-to-higher tax brackets would see a sizable tax cut.
But those who live in high cost-of-living areas, like the East and West Coasts, and from cities where residents have previously been able to deduct state and local taxes from their federal taxes, may still find themselves paying more going forward. Meanwhile, the disappearing incentives to homeownership will present challenges to people in high-cost housing markets and those considering a home purchase.
Ben Dunbar, an investment advisor representative from Gerber Kawasaki Wealth & Investment Management based in Santa Monica, says that the tax law will certainly affect his clients, whose annual incomes range from $200,000-$750,000. “Most of them have mortgages north of $750,000 and already pay high state taxes. Now they’re going to lose the state tax deduction, and the deduction on their mortgages is going down.”
$ 1 Million Deductible Cap Gone
For earners who count themselves among the C-Suite, the Tax Act has several other significant changes regarding executive compensation. The most notable is the change to Section 162(m) of the Tax Code.
Previously, Section 162(m) imposed a $1 million limit on the tax deduction that a public company could take on compensation paid to its CEO and three other highest paid executive officers (other than the CFO) – also known as “covered executives.”
An important exception, however, allowed companies to fully deduct compensation above this cap if it was considered to be performance-based. It’s no surprise, of course, that companies have typically capped the base salaries of their highest-paid executives at $1 million and offered them compensation beyond that figure in the form of stock options, stock grants, performance-based bonuses and deferred compensation.
The new law does several things. First, it eliminates the performance-based compensation exception, which means that companies will no longer be able to deduct compensation above $1 million from their taxes. Second, it expands the group of executives that are subject to the deduction limit to include the CFO. In addition, for executives that have ever been a covered executive, the new rule applies forever – even if they leave the company.
Market-Based Compensation Will Prevail
With high executive pay packages becoming costlier to companies, one might expect to see overall compensation decline – or at least to see compensation packages restructured. That’s unlikely, however, according to several experts.
“Companies are going to pay executives what the market demands. I don’t think corporate boards are going to say, ‘We can’t pay this guy because we can’t deduct it,’” said Clare Wherley, CEO and Co-Founder of Lassus Wherley, a wealth management firm serving the New York City and Florida markets.
The provisions in the Tax Act regarding executive compensation are just the latest effort by Congress to rein in executive pay packages which have soared over the last two decades. But few experts believe it will have the intended effect.
“The loss of tax deductions is not material to most companies. In general, deductions are a cost of doing business,” said Jim Barrall, senior fellow in residence at the UCLA School of Law and former chairman of the executive compensation practice at Latham & Watkins.
As a point of comparison, Dennis Minich, managing director of Andersen Tax in Chicago, points out that when the Affordable Care Act was enacted, it lowered the limit of executive salaries that corporations in the healthcare industry could deduct from their federal taxes to $500,000. “I don’t think the Aetnas of the world have changed policies much,” he said.
One sector that could be most affected by the Tax Act is the non-profit world. A new provision in the Tax Act imposes a 21% excise tax on tax-exempt organizations for compensation paid to any of the top five executives in excess of $1 million. That rate is equal to the new corporate tax rate. This could impact universities where some deans and coaches make in excess of $1 million. But how big of an impact it will be remains to be seen. In the non-profit world, as in the business world, where talent is important, the market will dictate compensation regardless of the tax impact.
A New Wave of American Migration?
“It’s fairly well known in accounting circles that there are a lot of errors in the provisions of the Act. There is a lot of behind the scenes scrambling on the part of the IRS, Congress, and people in the executive compensation field trying to figure things out,” said Wherley.
One unintended effect, however, may be a growing migration of Americans. In November 2017, Chris Edwards, director of tax policy studies at the Cato Institute, told FOX Business that the elimination of the state and local income tax deduction would encourage high-earners to leave wealthy high-tax states, like New York, New Jersey and California, in favor of states with more favorable income tax rates.
In February, Richard Florida, an American urban studies theorist focusing on economic competitiveness and demographic trends, and head of the Martin Prosperity Institute at the University of Toronto, made a good case to that effect in an article published on CityLab.com (See Map).
He argues that a talent shift from large coastal cities, like New York and San Francisco, to smaller cities in the West and South, is already underway. Using maps from LinkedIn, the popular professional networking website, he was able to demonstrate the population gain of cities like Denver, Austin and Charlotte and the population loss of cities like New York, Los Angeles and Seattle, by looking at how LinkedIn users changed their location on their profile in January. The data suggest that professionals are, indeed, leaving high-cost cities – and often for small cities in lower-cost regions. He speculates that this transition might well be accelerated by the Tax Act.
Of course, technology developing as it is, another possible outcome is that professionals may increasingly live in lower cost areas and work remotely for a company that continues to be based in a high-cost urban center. Whether this trend happens will depend on how company policies evolve – but the Tax Act may well be a deciding factor.
The job market is hot! Job openings are at a record high. If ever there was a time to consider changing jobs, now is it. But if you haven’t switched jobs in a few years, make sure you understand what is new, because job searching in the digital age is different from just a few years ago.
Talk About Competition!
For one thing, technology has led to an explosion of the pool of candidates available to employers. Not only is it easier for candidates to apply for jobs, it is also easier for businesses to find qualified candidates. No longer are you competing with just the local talent – you are potentially competing with job contenders from around the globe. Moreover, technology now enables workers to work remotely with increasing frequency. That means that geography is becoming less of a factor in recruitment when it comes to finding someone with the right skill set for a job.
Who Uses Paper Anymore?
Paper resumes are a relic of a bygone era. Virtually all job communications today, including sending resumes, happens electronically. And if you apply for jobs online, you will encounter ATS, or Applicant Tracking Systems. ATS software has become increasingly popular over the past several years because it enables hiring managers to quickly scan thousands of resumes for keywords that match the job description. If your resume doesn’t include the right keywords, it may never be seen by human eyes. This means that it is as important to craft an ATS-safe resume as it is to make it eye-catching to real people.
It is also important to tailor your resume for every job, structured according to what the company’s known needs are. The success of your application might hinge on one word. Dan Resendes, Chief Consulting Officer of the Barrett Group, recounts one client who was the highest-ranking tech person at his company. Although he reported directly to the COO, his title was “Director of Technology,” not “CIO,” and his resume reflected as much. His efforts to find a new position as a CIO continually came up short until he finally added that one word to his resume. Before long, he landed a position as a CIO.
“When an employer gets 10,000 applications and someone needs to find the five best ones, they’re trying to quickly whittle down the list,” said Resendes.
Success Starts with Social Networking
Networking has always been a great way to get a leg up on the competition when it comes to job hunting. In the digital age, it’s crucial. One reason why is that jobs are often posted on job boards as a matter of formality after someone has already been earmarked for that position.
“If you’re responding to job boards, you’re coming late to the party,” says Resendes.
Professional connections enable you to learn about potential opportunities before they even become available. And sometimes a connection is reason enough for a company to create an opportunity. If you offer a skill set that is attractive to a hiring manager, she will find a way to bring you onboard.
Employers often encourage their current employees to leverage their networks and refer their friends. According to a report by software company iCIMS, which designs ATS and recruiting software, 60% of employers believe that referrals bring in candidates that are a better fit for the company. They have good reason to think so. The report finds that 70% of referred employees surveyed have not changed positions since being hired, which means that employers can expect higher retention rates from referral hires.
While a business lunch is still a perfectly acceptable way to network, social media is the best way to build and maintain the informal relationships that are most useful in job hunting. If you’re a professional, the most important one is LinkedIn. The iCIMS report found that, when it comes to job research, 56% of workers use LinkedIn – more than any other social media.
Unlike other social network websites, LinkedIn is uniquely designed for professional networking. Members design a profile page that is structured like an online resume. You can summarize your career and education and highlight certain skills and expertise. You make connections by inviting people to join your network, which enables you to see their connections and even the connections of those connections. This visual web of professional connections enables you to develop new ones at the companies or industries that interest you.
Members in your network can also endorse you for skills, which increases your professional value in the eyes of other members of your network. According to Dan Resendes, your goal should be to get endorsements from 99+ people in your network. How? The easiest way is to endorse people in your network, yourself. People will often return the favor. What’s more, the activity might also lead to a phone call in which you verbally reconnect, catch up and possibly learn about upcoming opportunities – all from endorsing one person.
Did you know that savvy LinkedIn members can tweak their URL to boost hits on search engines? Say that you are a career auditor but want to transition into operations. You can add certain keywords to the URL of your profile to highlight skills that recruiters might be seeking.
Mistakes to Avoid
The number one mistake a job seeker can make is to prepare his cover letter and resume and immediately apply for a job, says Resendes. The first thing should ALWAYS be to ask yourself: Do I have social capital that connects me to that company? Would the person that can connect me to that company advocate on my behalf? Leveraging social connections should always be the first action.
The second big mistake is to customize just the cover letter of an application. It bears repeating that a resume should always be tailored to the position. And don’t worry about the length. Workers of a certain age remember well the one-page resume. But, nowadays, the length can be as long as necessary to show employers that you offer tremendous value. Still, your resume should not necessarily list ALL of your qualifications. Senior people sometimes list everything, thinking it will help them. But doing so can sometimes make you seem overqualified. The trick is to list only what is necessary to appear like the perfect fit.
You will be Googled! Most seasoned professionals did all their embarrassing, youthful antics before the digital age. But remember: whatever information might be on the Internet about you – both good and bad – is there forever. The best way to make sure your digital footprint best represents you is to post new information – articles, posts, etc. Search engines highlight new information over old.
Some hiring managers may ask you to interview by video. If so, be aware of good video etiquette. That means, be aware of your backdrop, confine your movements to the camera frame, avoid barking dogs and other background noise – and, above all, know how to use video technology!
Job seekers should keep in mind that an effective job search cuts both ways. Workers should always research a company before accepting a job offer. Thanks to technology, they have much better means at their disposal than ever before to do so.
According to iCIMS, nearly one in three full-time working Americans – and 47% of millennials – have declined a job offer primarily because the company had negative online employer reviews.
A quick internet search of a company or its leaders will yield a trove of useful information to get started. Job seekers can then find online reviews and salary information about companies at Glassdoor. Finally, they can glean a lot of information about company culture by simply following corporate executives on Twitter or other social media.
Technology has changed the landscape of the job search. Embracing these changes could mean new opportunities for you.
To the casual observer, the modern job search appears more convenient than ever. Three clicks of a mouse, a flurry of typing, and a potential applicant is whisked away into the magical world of online job postings. And it appears to be the land of plenty; there are bushels of job postings. They submit resumes and wait. And wait. And wait. And never hear back.
What did they do wrong? They were qualified for every position they applied for, their resume was immaculate, but the hiring companies never made contact. The answer, strangely enough, lies in the habits of the infamous sand rats known as seagulls. Consider a busy day at the beach: people are so tightly packed onto the narrow strip of sand that you can’t shake out a towel without earning a dirty look from someone. The internet is millions of times more crowded. Online job postings are inundated with potentially thousands of virtually identical resumes a day. Applicants applying to such listings are like seagulls flocking to a single hand spreading crumbs at the beach: you might get a taste –it might be enough to keep you hopeful—but you will not walk away satisfied from the experience.
Relying on the published job market is narrow-minded and bird-brained. Why compete with thousands when you can narrow down the field to less than one hundred with little effort? Instead of searching for job availabilities, search for specific industries, company sizes, and desired location. Once you’ve created a list of attractive companies, search for the executive that might be in charge of hiring the position that you would be seeking. Mail them your resume directly. There might not be a job opening, but if there is then you’ve managed to cut out the applicants that would only apply if the job availability was posted online. Think back to seagulls: instead of being one of the flock, be the lone maverick patrolling the beach and hunting for the whole sandwich it can snatch out of an unsuspecting individual’s hands.
It’s a higher risk approach, yes. I am not suggesting that you completely eschew the published market. However, by supplementing your search with so-called “unpublished introductions,” you can broaden your search and possibly reap greater rewards in a shorter time span.
There are various laws in the workplace both nationally and globally that come into play from a patchwork of jurisdictions, as well as company policies and rules of ethics that may or may not come into play as you enter the hiring process. Unless you’re conducting a search in concert with your attorney with the expressed goal of building a discrimination lawsuit (yes, this is a popular shakedown racket), none of that will actually help you get hired, so let’s remember the mission and identify the tactics needed to win the war, not fight the battle.
The US Equal Employment Opportunity Commission names ten types of discrimination that it protects against and it’s extremely likely that you could find yourself on the receiving end of one or more of these baseball bats during the course of your career, so let’s look at how you can effectively deal with the realities:
If you’re pursuing an opportunity and it becomes evident that the hiring team is looking for a token employee to fill the job with a young, old, “less ethnic” (oh, c’mon!), tall, or cheap, etc., you’re not playing your strong suit, because you should focus on the market that considers your particular persuasion to be the preferable one. In all cases, you would rather be discriminated for than against, right?
For example, if you are applying for positions in the food wholesale business but you’ve never worked in that industry, people may look at your background and correctly determine that you’re “not a food guy (or gal, oops..)”. You may argue that your experience in wholesale distribution is completely transferrable, but now you’re arguing and you may just be barking up the wrong tree.
So common sense: Go where you’re wanted and appreciated, where you and/or your qualifications/profile will be welcomed, and where people like you are regularly sought out, not screened out.
Sometimes, though, that just isn’t possible.
When The Barrett Group Client Selection team is reviewing candidates for our service, we always look at the client’s potential pitfalls in the marketplace, yet sometimes they are so formidable that they become the main focus of the search.
The Barrett Group record for an age discrimination issue stands at age 84 where a CFO reentered the job market after being retired for some years. Having the established ability to provide a quick financial turnaround to troubled hospital systems, he was hired for short consulting assignments, three in succession, which turned out so well he was able to retire again within a year.
The hiring committees truly didn’t care if he was 5 or 500: they were losing millions of dollars a month and just needed him to live long enough to save their hospitals. He was able to totally sidestep the age issue.
Every job search has elements of poker and chess during some stages of the campaign, and race/ethnicity can work for you or against you depending on how you play it. After all, diversity in large corporations is an ongoing, highly public issue that extends beyond the laws that inspired it.
Sometimes, you can use your race as a positive in the hiring process because you will be seen by HR and Diversity folks as a clear path to hitting their demographic quotas, while the Marketing/PR teams are looking forward to seeing your smiling face on the website and news releases showing pictures of the annual picnic. Cynicism aside, I suppose, and I can certainly understand how one might resent being the beneficiary of what results in reverse discrimination, but we live in a complicated world, and our program at The Barrett Group program is designed to help you advance in the real employment market of today.
As you might imagine, we have ongoing discussions with our clients in order to help them navigate what can sometimes be highly charged issues. I invite you to take a good look at who you are professionally, and how you are perceived by those who do not know you. Having a very clear picture of both is a crucial first step for entering into a job search or career change. Choose your battles, but win the war!
If may be too early to write the obituary, but the future of The Elevator Speech, at least as we refer to it in the Career Management industry, is in grave doubt. The phrase has been around since the modern résumé came into popular use after World War II , and during the Dot Com boom the Elevator Pitch gained ground. The resultant expulsion of Hot Air into the atmosphere was likely a main contributor to Global Warming and provided considerable lift to the bubble, but it burst nonetheless.
So here we are in Job Search in the Brave New World. After trimming words and phrases to a white heat of 30 second brilliance, we used to coach our clients to rehearse in the mirror with a stop watch (I did say “used to”) so they would be prepared to gush their magnificence on command to those hiring managers who would hang out in elevators just waiting to happen on true executive talent.
The business community has morphed beyond recognition, and communication styles, methods and technologies have a synergistic influence on changing culture and expected behavior at the executive level. The one way communication method suggested by speeches and pitches has been supplanted in most cases by an active and rapid interchange, a spontaneous sharing and exchanging of information and viewpoints.
Sometimes, even today, an interviewer might ask The Question: “Why don’t you tell me a little bit about yourself?” In the age of LinkedIn profiles, electronic résumés send by email, and internet based background checks, the interviewer is generally being rhetorical. What they’re looking for is a quick and easy path to determining why they are speaking with you, and what they can expect from listening.
To demonstrate your embracement of efficiency, the only information you should share is how hiring you will eliminate the problem that has caused you to be considered for this career opportunity in the first place. Jobs aren’t created by politicians or good intentions, opportunities arise through pain, because there is a lack that can’t be fulfilled without hiring someone. This kind of information cannot be imparted through a standardized presentation, and people simply don’t have time to listen to a speech, even thirty seconds.
Interviewees often kill the opportunity by (1) volunteering information about their background that is irrelevant for the projected position, bringing into question whether he/she is the right person, or (2) neglecting to clearly delineate the unique qualifiers the audience desires.
So, when it comes to speaking in today’s interviews, choose your words wisely and quickly. Don’t rehearse a speech: practice fencing.
Executive Recruiters, headhunters and placement agencies work on the other side of the fence from career management specialists like The Barrett Group. The difference lies in how they are each paid for their services, which dictates where the loyalty and effort lies in the servicing of their respective clients’ needs.
Recruiters are paid by their corporate client companies, either by retainer or contingency; the service they provide is filling open job orders. Accordingly, a great deal of their effort is expended on obtaining these job orders and winning favor with the HR department and hiring executives so the stream of job orders continues. They do not get paid to get people jobs; indeed, a private individual can’t “hire” a recruiter, as they only work for companies, not job seekers.
Executive recruiting is a highly sophisticated profession populated typically by professionals with a depth of experience in a certain industry or discipline, usually based in a given local geography.
They know very specifically what and who their client company is looking for and how to find them. They maintain ongoing relationships with executives they have placed so they can place them again and again throughout their career. They rarely have to look outside their circle for a candidate to present.
Career management is also a highly sophisticated profession, but requiring a completely different set of skills. Here at The Barrett Group, our clients are the individuals focused on bettering their career situation over a period of time, and we accept private retainers to help them accomplish their goals.
We live in the job search process and work personally and closely, utilizing the wisdom and techniques amassed from the experiences of our consultants with many types of searches and employment/career challenges. Because we are only beholden to our individual private clients, we are not limited by sector, profession or geography. The combined skills of the consulting team adapt our techniques for each individual clients’ unique needs.
Some of our clients enjoy a great flurry of activity from the recruiting community because they are seen as highly placeable within that industry sector, so our job becomes one of brinksmanship, helping our client to interpret and steer the recruiters’ actions to be advantageous for our client. This direct assistance often makes a huge difference in our clients’ final offers of employment.
If you aren’t receiving regular calls and emails from the recruiting community, there can only be two reasons why: (1) they aren’t aware of you, which signals a basic failure in your professional networking, reputation building and strategic participation in social networking, or (2) they don’t see you as someone they can place with their client companies.
In either case, hiring a professional career management team, like those available at The Barrett Group, is your best bet to correcting the problem and advancing your career.
As Chief Operating Officer of The Barrett Group, my business day starts each morning with the onerous task of reviewing each and every resume submitted to our website, www.careerchange.com. The number is a reasonably consistent range of 40-60 submissions daily. I do this personally for two reasons:
I believe that every professional who has taken the time to review our service as outlined on our website and decides to send us a resume deserves my immediate and personal review; and
I believe I am the most appropriate person on our team to decide which of our Client Intake Specialists will work with a particular career changer.
So how many resumes have I read? I’ve been working with all the clients since 1993, so it’s been quite a few. How long does it take me to reach a decision about who and how best to deal with a particular job seeker? Rarely longer than a minute.
My criteria for reviewing submissions is not so different from HR professionals, executive recruiters or hiring managers. My first question is always: what professional level are we looking at, here? If this can’t be answered in a five second glance of company names, titles held and quantified responsibilities/accomplishments (dollars and percentages that align and instantly give me a picture of this person’s influence and reach across the organization), we’re looking at a defective resume. Unless the person is presenting him/herself as a resume expert, I would not be dissuaded from looking further.
Conversely, a beautifully formatted document presented with aplomb and dripping with hip buzzwords tells me this person had the wherewithal to have their documentation redone by a professional. Beyond this one fact, we have learned nothing about the person. For all we know, a job hopper who has managed to get fired from five positions in five years is now being marketed as an ambitious industry ladder climber. This is probably a good career strategy for this individual, but craftily engineered documentation does not necessarily indicate ambition, or even competence.
A college degree suggests the person can finish something. Honors could mean they test well, which can be a good thing.
A military background, at a minimum, prompts me to believe the person can take orders and follow a program. If a person has been in charge of large organizations, with multiple locations, one can assume a level of organization and leadership. However, people rarely describe their professional failures in detail on their resumes, and rightfully so. This is why, after I have reviewed the documentation as sent and determined there are compelling reasons to consider their candidacy as a new client, the selected Client Intake Specialist will contact them directly to arrange a series of personal interviews. These meetings tend to bring out the full story of why our potential client is having problems with the search process, and how we can best be of assistance.
Spelling errors, hilarious mistakes, ill-advised photos, and curious omissions? Rampant, I see them every morning, occasionally spilling the second cup of coffee when taken, yet again, by complete surprise. What I can’t see are the exaggerations and bold-faced lies rampant on these data streams of human consciousness: the statistics and publicized anecdotes tell us they’re there, but I haven’t found a filter for them yet.
My advice for you? Take a 30 second look at your current resume and ask yourself, after you’ve turned it over: do I know what this person does, what they’ve accomplished to date in their professional career, what they’re qualified to do moving forward, and what they want to do from here? My offer to you? Send it to me. I’ll let you know what I see, and what I think; you can take it from there.
So we continue to have over 14 million ready-to-work Americans walking the streets, a number equal to the entire populations of Guatemala or Mali. With the prospect of economic doldrums continuing until further notice, maybe they should just get together and start their own country. Actually, it’s starting to look like they are moving in that direction, and who can blame them?
In the meantime, the lives of Quiet Desperation are clocking away the hours in the HR departments across the country, as the Winged Monkeys in the back room electronically file resumes of unqualified applicants all day long while they are unable to fill millions of open positions.
What are today’s hiring managers looking for at the executive level? Is there a secret formula to follow that results in one highly qualified executive getting hired today, while someone with a greater pedigree and a more impressive history of accomplishments languishes for another year before finding a new job?
It’s become a well-worn cliché that people hire those they know, like and trust, but we at The Barrett Group www.careerchange.com regularly see another trend that bucks the conventional wisdom, and Dorothy bore witness to the list of most desired attributes requirement during her famous journey).
When looking outside their network, savvy hiring managers still look for the same basic skills held in value so many years ago: a heart, a brain and courage.
Admittedly, they rarely use those words in job descriptions, but, when you think about it (you’ll need, of course, that brain thing), if you needed to hire someone to be at the epicenter of corporate activity after you’ve left the room (or country, nowadays), you would need to be confident that they will do when push comes to shove, as it regularly does. Will they:
make a smart decision;
consider all the ramifications (financial, legal, internal/external reputation, reflecting the company’s mission);
be honest and transparent while balancing discretion and politics;
have what it takes to go ahead and make it happen should you not be available for hand holding and devil’s advocate role playing?
If you’re looking for a new or better job, you might consider whether you are fully transmitting your ability to be that perfect person to those agonizing over finding that Wizard who can solve all those problems on that laptop over there.
C-level executives in the New World Order of Business are really long range temps. When Return on Investment trumps company loyalty every time, when large corporations can be evaporated, absorbed or taken over on any given day, you need to travel light and hedge your bets along with your funds.
Even when all goes as planned, if you don’t deliver miracles, you can find yourself seen as yesterday’s news. If you do deliver miracles, you have made the company an excellent target for merger, takeover or purchase. Either way, you could find yourself reading the fine print on that Separation Agreement.
Okay, so you’re in transition, possibly again. Having lifted some heavy weight in several different and challenging corporate scenarios over the past few years, you’ve learned quite a lot and enjoy sharing your knowledge and methods with those who have found themselves in the deep end of the pool. So you market yourself as a Turnaround Consultant, a hired gun who can save the company from ruin, or a rainmaker who can bring in needed revenue.
There are two pitfalls we have seen in trying to do this in the middle of the current economic extended hiccup:
(1) The management team believes you are really just looking for another job and either won’t take a consulting engagement seriously or will drop them mid-stream when you get an offer, or (2) they see you as an inside guy, because of your stellar corporate background, when they were really looking for a professional consultant. Because you, technically, have no record of achievement as a consultant, you’re an unknown quantity.
Then the other shoe drops (actually, both shoes): (1) companies in deep trouble know they need help, and quickly, but cash flow becomes a serious problem, so they want you to work “on spec”, and/or (2) they can’t afford not to hire you and yet they can’t afford to pay you, so they don’t do either and you both lose out (probably typifying the business logic that got them in trouble in the first place).
So, what to do?? Here’s the latest thinking from Barrett Central:
Never fight a losing battle, and always stack the deck in your favor: Lay out the (extremely) negative consequences of not hiring you, in which the company continues to lose money, never breaks into the new market, and/or ultimately fails. Out of pity and good sportsmanship, restructure your consulting proposal to pay you only what you need now (you get paid), a big balloon based entirely on success events (you get paid well), then put a large contingency amount at the back end, payable entirely in equity (you get a piece of the action). Low risk on all sides, big payout on all sides.
People only get hired (or engaged) under very specific circumstances: a. If they know you, like you and can trust you. If you’re reading this, you probably don’t know enough people. Social networking (no secret here) is today’s key, and offering to help (and meaning it) is the way in. If you need help with this, call me. b. If they need you. They only need to know of you if you have a reputation for consistently doing the impossible and delivering the goods. c. If they need anybody. When the FDIC had to close down more banks in the past two years than they did in the past twenty, they needed Any Warm Body, an army. Quite a few people with little or no experience or qualifications were hired, trained and paid, while adding to the pedigree on the resume and meeting influential folks across the company.
The Hostile Takeover Gambit: Hopefully you set aside some loose change from your severance. If they won’t hire you, buy the company out from under them. As you first official act after installing yourself as CEO, fire them.
The Devil You Know or the Devil You Just Speed Dated: If they think they might do better with somebody else, remind them that they already concede you can do the job and they already have a working relationship with you. Because you’ve already done your analysis, the job is half done, all you have to do is execute. Why would they want to go through the whole painful process all over again when all they have to do is negotiate in good faith? (This one may also be the quickest highway to World Peace, but let’s take one challenge at a time).
So by all means take this opportunity to explore the glamorous and rewarding world of consulting. Just make sure you bring your boots, and don’t ever forget your parachute!
Are you in a midlife career change? Are you changing careers at 30, 40 or 50 years of age? Do you need a new career? If you are currently experiencing difficulty in your job search, we’re here to help. Please send a message with your information or call.