You don’t have to look very hard to find a story about someone who made personal sacrifices, started a business, worked hard, kept at it and now employs a bunch of people, and how this entrepreneur uses this to justify why he/she is getting a better deal than those employees. The employer takes vacations that the employees don’t get, receives a lot more pay, maybe gets better benefits, etc, and justifies it all because he/she put his/her wealth and reputation on the line, and this is payback.
I’m one of the people who did this. I started an Internet business one month before 9/11 and, when the towers fell, I had $50 to my name, working out of a room in my house after all of my contracts were cancelled because no one knew what was coming.
I took that and in seven years made a successful business, had employees and lived very well. I deserved it. For a year along the way I picked what days I was going to eat on so that the kids had food. I didn’t qualify for a single SBA loan and I’m here to tell you that those loans are so complicated, time-consuming and overall difficult that pursuing one is barely worth your time and not worth the risk if you actually NEED the money.
I’m one of the few people whom I know of who looked at all of the success, said ‘Not for me,” and went back to being an employee, selling the business off in pieces and marketing myself as a developer/contractor. I’m a LOT happier. It is exceptionally stressful to be a small business owner and when it got down to it, my kids were going to remember time with me more fondly than they were going to remember the time I spent building the business. However, having been in both worlds, I found myself in a position to see both the employer and the employee’s world, and I wanted to share insight from my experience:
No matter what you do, you’re in sales:
Every single working person in the world is in sales. You’re selling your time for the compensation of your income. If you’re a receptionist, a programmer, a laborer, a doctor or a fireman, you’ve got a product which is your time combined with your abilities, and you’re marketing it. Your pitch is”I will do this for you if you pay me,” and your price point is what wage you’ll accept to do that job.
If you sell something that anyone can get anywhere, then you’re going to have to take what you can get for it. It is NOT the employer’s fault that anyone off the street can wear a paper hat and say, “Would you like fries with that?” If that’s the extent of your skill, then that’s the extent of your value, and the government cannot make a program which will change that fact.
If you find yourself in that position and want to do better, you need to find something you’re passionate about and increase your expertise on it. You can do this over the Internet, by joining groups of people who are interested in the field or you starting one for free through blog and group sites.
You normally have to do this instead of watching TV, playing video games or going out partying. If that doesn’t appeal to you, then ask yourself if doing those things is worth remaining where you are, and if so then reconcile yourself to it.
The rest of the article is for the person who has taken that step and is now pursuing that passion.
What is Corporate Employee Capitalism?
Your boss is in business to make money. He/she is NOT in business to help you fulfill your dreams, cure your ills, solve your personal problems or to improve your life. Your boss has one goal: to keep his/her business alive and prosperous, and you’re either helping him/her or you’re in the way.
That sounds pretty heartless, doesn’t it? That’s because the corporate jungle IS a jungle, and if you go into the jungle and try to pet the lions, they will eat you, no matter your intentions. That’s what they are, that’s what they do. It might not sound fair or even ideal, but that won’t reconcile you when the lion’s teeth sink into your thigh.
What many people don’t understand is that it is the employee’s job to be a resource worth paying for. This means that if you’re mediocre in your field, then you’re going to be mediocre in your pay, and that’s it. Once again, government programs can do practically nothing to compensate for this. When they come out and talk ‘mandatory pay increases’ and ‘living wage,’all that ends up happening is that employers find new and more creative ways to get rid of dead weight, or they go out of business, and if you’re mediocre then neither of these will benefit you.
As the employee, it is your job to maximize your expertise in your position and, more importantly, it is absolutely your responsibility to get the maximum amount that you can for what you do.
Earning as much as you can for what you do helps everyone. The person who’settles for a lower amount’ drags everyone down, because he/she sets the values of the skills he/she provides artificially low, and then the employer gets a false indication of the value of the services that the employee provides.
So first, let’s look at what employers do to keep you from realizing your maximum pay, and then what you can do to get it.
Tricks Employers Use to Keep the Working Man Down:
Ok, I named this section this way to be provocative, and because I have a lot of liberal friends who like to think this way. There are other ways to phrase this, but they all boil down to the same thing:
Your employer wants to pay as little for your services as he/she can, in order to maximize profits.
Don’t let this bother you. Every time you’ve bought something on sale, clipped a coupon or bought from a large chain store instead of a local vendor, you’ve done the same thing and it probably didn’t bother you. If the person who wears the paper hat and says, “Would you like fries with that” made as much as the person who wrote the software that runs the cash register he/she uses to ring up your order, your hamburger would cost you $50 and you couldn’t afford it.
Here are the most common means that an employer might use, to keep you working for lower pay:
The business which is ‘like a family’.
Probably the most common ploy and the biggest crock in the corporate world is the idea that “we’re family” and”we’re all in this together.”
Really? So if the company makes 50% more next year, will you get a 50% raise, because we’re all in this success together? No, no more than you’re going to happily take a pay cut if your boss goes down a wrong road in his business and takes a bath on an investment. ‘The business is a family’is meant to invoke a paradigm of the employer as your mother/father, whom you’re supposed to listen to, obey and not question, because mom and dad have your best interests at heart.
Mom and dad will probably not fire you if the family isn’t delivering a good return on its investments, however your boss will, so you’re not in a family with your business. It isn’t worth your effort to buck this belief at work (in other words, tell your boss to stop doing it), but don’t buy into it, either. Remind yourself that this is not a family, it is a business transaction.
We pay what everyone else pays:
It is up to you to know what your position pays in your area. You can do this online as simply as by choosing your favorite search engine (like Google) and typing in your city and state, your job name and the words ‘average pay.’
Check all of the sources and average as many of them as you can find. Then replace ‘average pay’ with ‘unemployment rate,’ because if that’s high then maybe it’s not a good time to be looking. If it’s not, then decide where your pay is in regard to the average, and THEN decide if what you’re making is worth what you’re doing, compared to what everyone else is paying.
We’ll discuss how to GET that top dollar in the next section.
You’ll make less pay for a learning opportunity
This is another very common scam, especially among technicians and programmers. You’ll get to work with and learn from people who work for the company, who are top in the field, but of course we’ll be paying you less, because quite frankly you’re not one of those top people.
First of all, if you didn’t have something to offer, then you wouldn’t be someone they’re considering. Secondly, those people didn’t get to be top in their field by providing services to you for free, like teaching you. If in fact you’ll be doing some sort of support for someone whom you’re sure you can learn from, then in your mind reconcile yourself to the idea that this isn’t a permanent position or a permanent rate of pay, because ideally the student will become the master, and the master gets paid more.
We Wear Many Hats at a Small Company
You were hired to program, but you end up performing network maintenance, software installs, IT support and troubleshooting of new software that the owner would like to buy, rather than paying you to write it.
You were hired to manage the office, but you also answer the phones and clean the bathrooms once/week, or do sales.
You do the company’s accounting, but in fact you’re an executive secretary who used to work for an accountant.
Not only are you distracted from your regular job, you’re doing something where you have peripheral expertise so that the employer doesn’t have to pay for someone who knows what they’re doing. If you screw it up you’re every bit as liable, and if you fall behind in your regular job because it takes a LOT longer to do something you really don’t know how to do, you’re considered not to be a top person in your field. This is a very common method as well to build a bad evaluation into your good performance by grading you on variables outside of your control.
I highly advise that, when you take a job, you get a written job description, and every change made to that job description be amended in writing, alongside a written explanation of your expertise in the field and an understanding that it not be a determiner toward future performance evaluations.
We Pay What we Pay – I have no Control Over it
This is more common with larger companies. Your slot is allotted one pay’to be fair,’ be it a union job or a generic description like ‘System Analyst II’. Your boss can’t give you a raise, because there’s a pay structure and he/she will just be told, “No.”
Again, this is crap. There is always a means to keep better people, and if you’re not making a market average in a field which isn’t seeing large unemployment, you can move, and your employer knows this. If they can’t replace you, they’ll find a way to keep you.
We Pay Excellent Benefits
Simply the most common scam there is. Don’t buy into it, especially not in the coming world.
Before you believe that the’benefits’ are ‘excellent,’ see what they cost if you pay for them on your own, especially if you’re a single male. Then take a look at what your paid portion is. There are a lot of places that sign you up for ‘excellent benefits,’ but don’t pay any part of them.
You receive a salary and then performance bonuses
There are places which pay bonuses based on job performance in addition to a flat salary. They often require the employee to actually ask for the bonus when he/she feels its earned, rather than lay down a specific set of conditions and making the payment of the bonus automatic when those conditions are met.
First of all, this is a passive-aggressive control technique to get the employee to put the employer in a power position (you have to come looking for the bonus). Secondly, it opens the door to add more conditions to payment of the bonus. What can happen is that you’ve paved the way for the employer to set up a series of hurdles and then knock them down at the last minute or re-create them with more requirements.
While bonuses sound great, a bonus based on performance system rarely works out to the benefit of the employee. At its best, the employee gets a lump payment and loses nearly 40% of it to taxes, meaning that most people will benefit more from an annual salary increased by the level of the bonus.
I list all of these in order to identify them as a small portion of a wide range of tactics that the employer uses to get an employee to perform work for less than what it’s worth.
Why? Because it is natural to ‘feel bad’ or be embarrassed when you stand in front of your boss’ desk and say, “I want more of your money.” Many employers in fact rely on this.
So you want to be a Corporate Employee Capitalist, what do you actually do?
If you go to the service center at a car dealership and are greeted by a person with a clipboard who says “How can I help you?” and who has the words ‘Service Advisor’ on his/her polo shirt, you’re probably speaking to someone who makes a six-figure income.
Why? Because a Service Advisor has to balance a lot of cars among a lot of mechanics, the needs of both constantly changing, be a people-person AND a technician and diagnose your car correctly in about three minutes after meeting you in order to make sure that the right problems are repaired. The Service Advisor makes a commission on every car he/she sees and manages a team of mechanics who also work for commission. This is a position which very few people can do.
The Service Advisor is the classic example of Corporate Employee Capitalism: a person whose skills are rare, who has the ability to market them to a wide variety of recipients and whose abilities dictate how much money he/she can make for his/her employer. If the dealership under-pays the Service Advisor, the Service Advisor can go to another dealership which will be happy to have him/her if the skills are there, this is widely known and it behooves the dealership to pay top dollar to good people and retain them.
Meanwhile, car sales people are a dime a dozen and don’t receive exceptional pay. You see the sales floor on the dealership change almost constantly, especially in the new car department. Cars are a commodity, people want the facts from whoever can provide them, and if you can’t cut it you’re gone.
There is nothing wrong with this scenario. The car dealership makes more of its money from repairs than from sales. The investment in the Service Advisor makes more sense than the investment in a sales person.
In that exact same vein, it is your job to sell your services for the most you can get for them, in an arena where the return on the investment which is you is recognized by the employer. You don’t want to be the guy selling apples in an apple orchard, no matter how good you are at selling apples.
An example of a justifiable pay increase:
There is a ramp-up period to employing you which your employer has no choice but to pay you for, unless you work entirely on commission. This is the leverage which you employ without knowing it, which means that it behooves your employer to keep you doing what you’re doing rather than frequently trying to trade you out for more qualified people (if there are any).
This also means that if you’re not already overpaid, you’ve got a leg up toward increasing your pay in that your employer can lose significant revenue replacing you, even if he/she can do so at the same rate of pay.
If you make ten dollars per hour and it takes a month to get you up to speed, then the cost of replacing you at the same rate of pay is $10 x 40 hrs/wk x 4 weeks = $1,600. This means that it behooves your boss to increase your hourly pay $1,600 divided by 52 wks/yr divided by 40 hrs/wk or 77 cents/hr, once you’re trained, even if you can be replaced at $10/hr.
This is a model for a rule of thumb, based on how long it takes to train your replacement, as to what you should be receiving for your first raise. You’re going to find that lower paying jobs have a shorter training time and then a lower cost of replacing you, while the higher paying jobs have more responsibilities and require more time to ramp up. What this means is that you can’t necessarily go in to your boss’s office, cubicle or what-have-you and say, “I demand 8% more tomorrow and I know you have to pay it.”
Pay Increases Over Time:
Rest assured that these are the sorts of calculations that your employer is making when it comes to year-end reviews and built in pay increases, and if he/she is coming back with that 8% pay increase, it’s because in fact he/she can afford to go 10 or more.
When calculating your pay increase, your employer weighs in factors such as:
· Reliability · Performance · Future needs of the company in regard to you
Some of these you can control, some of these you can’t. If you want more money (or, in fact, the most you can get for what you do) then there is no substitute for always being on time, always working a full day, and always doing your job well or, in fact, better than most people.
Your boss wants you to do these things so that he/she can make the greatest return on the investment in you, which is your pay. You want to do these things in order to have leverage to increase that investment. You both have the same goals, you both in fact want the same things. It is most likely easiest for you to keep doing what you’re doing in the same place, meaning that you want to be seen as the so-called ‘asset to the company,’ and it behooves you for the company to succeed. You actually do have a self-serving reason for this, if there is a possibility to increase that investment in you.
How to Know What You’re Worth:
We discussed how to look up on the Internet what you value for the local area is.
This information is notoriously dated – the best way to know how close you are to regional average is to go through a human resources/ head hunter firm. There is one for almost every industry, they have websites that you can search for free, and you can get a better idea of what people are offering.
Most of the head hunters put out fake job advertisements regularly in order to collect resumes, especially when no one is hiring. That way, when a client DOES contact the head hunter, there is a shorter period to return with a name. Don’t let a dozen groups looking for exactly what you do and paying top dollar encourage you to give notice tomorrow.
Places like ‘Craigslist’ are becoming more popular with serious employers and head hunters because more people are searching there first, and it’s free. You’ll see a lot of ‘Depends on Experience’pay rates which you need to be wary of. Obviously they don’t want to say, “$50/hr” if they can get away with $45.
A lot of them, however, won’t discuss pay at all until they check your resume and references, and these should be avoided. No matter how good your references, they don’t want to be called three times/week as you go from job to job, get through the interview process and find out that the pay rate is unrealistic. Anyone advertising any position who won’t give you a range of pay is just wasting your time.
Now that you have your acceptable pay in your pocket, and you’ve decided that it’s not what you’re getting, you have to decide whether you want your employer to match or beat that level, or if you need to hunt greener pastures.
Do I Stay or do I Go Now?
If you’re more than 20% under the market average in your pay, it is highly unlikely that you’ll receive that amount in one fell swoop.
Many employers will ‘put you in a position to ramp up to that level,’ which means they’ll establish a series of goals for you to achieve and, as each goal is achieved, you’ll receive a pay increase.
You want to avoid this if at all possible. The employer has set up a series of hurdles for you to climb, knowing that with each one you’re more committed to the company and then less likely to leave. Meanwhile he/she has bought plenty of time to replace you if in fact he/she believes that there are other people who will do your job for the same amount. The ‘ramp up’ argument is a dodge, but if you believe that your employer can be trusted and really love where you are, then by all means make sure you get that offer in writing, with specific goals, specific rewards and a written understanding that if more work is put before you which keeps you from achieving the goals set forward, then that work replaces the goal and you still get the pay increase. It isn’t uncommon for the employer to say,”If I’m going to increase your pay, you have to get this certification,” and then keep you from getting it by sending more work your way.
If you’re looking for another 10% or so, then you’ve got a realistic chance at getting it. You want to cite your findings in writing and present them as a CAR or Cost Assessment Report to your employer, not sit down and discuss it. You want to demonstrate that:
· You know what someone should make in your industry · You’re aware of where you can go to make that much · Your contribution to the company justifies the reward you’re seeking · That this is a business transaction, nothing more
Sitting down and discussing this with the employer makes the situation an argument, and you run the risk of losing. Presenting clear facts in writing shows your professionalism and seriousness, and takes emotion out of the mix. Make no mistake: emotion is your worst enemy when negotiating for better pay. You want to be cold, honest and professional, demonstrating your worth, not your feelings.
Once you’ve presented your findings to your employer, you want to make it clear that you’re not looking, but you’re not satisfied with the rate of pay.
If you are told no, your employer is going to naturally assume that you’re going to go find another job. This means that you’re probably not going to get any more raises and you’re probably not up for any more favors, if you’ve received any. Therefore consider your financial situation before you go this route.
How Many Trips to the Well:
How often should you be asking for more pay?
Your boss will tell you, “Every year.” I’ll tell you, “Every six months.”
Your boss will tell you that this is too often. That’s only true if you’re consistently making market average or better. At the very least, you should be checking your pay level against the average every half year or so. You should DEFINITELY do so before any career review.
Using Recruiters to Increase Your Pay:
It is a reasonably common practice by employees to go to a recruiter, get an offer for a better job, and then go to your employer and say, “Beat that offer or I’m out of here.”
This sort of strong-arm technique is counter-productive in two ways:
1. Your employer is going to take this as extortion and, if he/she capitulates, it may just be long enough to replace you. 2. The recruiter who put a lot of time and effort into you is going to be royally pissed off if you don’t take that job, know exactly what you did and never recommend you again. Recruiters tend to hop around between agencies and your name can become mud in several different databases faster than you realize.
If you go to a recruiter and say,”Get me out of here”, reconcile in your mind that you’re ready to leave your job. Ensure that the recruiter understands that they may NOT contact your current employer, because new recruiters often don’t know better. Have three references ready, and make sure you’ve spoken with those references, and that they are comfortable referring you. Let the prospective reference know that it is ok with you if they don’t want to be used, because you want three cheerleaders, not three, “Well, ya, he’s ok” references.
When you get that other job, be prepared for your boss to say, “What will it take to keep you?” Be prepared to say, “Nothing – I’m gone,” and stick to it.
I cannot be more emphatic: do NOT stay at the job once you’ve decided to take another one. In your mind, you’ve left. In your employer’s mind, you’re a liability. The relationship is now doomed – you’re going to go somewhere else no matter what happens, but you’re ready for it now.
In closing, I hope this helps you to understand the Corporate Employee Capitalist. You’re another beast in the jungle, and you’re fighting to survive. You don’t want to be the one smiling as you’re eaten and, if you look at this situation as the transaction that it is, you won’t be.