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Thursday, October 1, 2009

reopening salary negotiations after accepting an offer

A reader writes:

11 months ago, I accepted a job in the nuclear industry (Company X). At that time I was unemployed. The offer was contingent upon the issuance of a security clearance. Clearances take anywhere from 2-3 weeks to 2-3 years. In such situations, people either travel, volunteer, enjoy the free time, or find a job. Luckily for me, I found another job immediately, not really pertaining to my field, but it's higher pay, 20% more to be exact.

I was informed by the issuing agency that my clearance is about to be issued any day now from, and the next step would be that Company X will discuss my start date. I really want to start my new job, but I am having second thoughts since my current job pays much more.

I know that the #1 rule is never to discuss or negotiate job terms AFTER formally accepting an offer. However, this offer was made a year ago and a lot happens in a year! I also know that these clearances cost a lot of time and money for the company (8K-15K). I feel guilty to open up negotiations, but I also know that they need me more than I need them, since they invested in me and have been waiting.

Should I address salary negotiations given that it's been a year and that I am currently employed?

I wrote back to this reader and asked if he/she had signed a contract. The response:

Now that I think about it, I should have signed the contract (a condition mandated by government agencies to pursue security clearances, I technically have to be an employee-on-stand by).

However, instead I verbally accepted the offer. They were more concerned about my paperwork for the clearance, and I now think that they forgot to wait on my signed contract. I believe the HR lady has committed a blunder by processing my paperwork without my signature on the offer.

Okay. If you didn't sign a contract, then it sounds like legally you're free to back out.

Ethically is a different story.

You accepted this job at a particular salary, knowing that there would be a long wait while your security clearance was processed, and knowing that the company would spend $8-15,000 getting you that clearance. Now that your clearance has been obtained, the ethical thing to do is to set up a start date and not try to negotiate.

Frankly, if I were this employer, and you tried to negotiate at this point, I would be so disgusted that I would probably pull the offer, unless I were desperate. It shows a lack of integrity.

So I wouldn't count on being able to negotiate successfully anyway. You should see your choices as taking the job you committed to, at the salary you accepted, or not taking it at all. And if you don't take it at all, account for the fact that you will burning a bridge, and you may run into someone from that company in your professional future. Do you want to be seeking a job offer from a different company some day and discover that the person you burned is a decision-maker there?

So not only is honoring your commitment the ethical thing to do, but it's also probably the smart thing to do.

What do others think?


Anonymous said...

Agreed. Integrity and ethics are sorely void in today's workforce. If it weren't for the cost of the clearance, I might consider backing out/re-negotiating, but given the cost, the job's a lock in my opinion.


Anonymous said...

Honestly I would not back out, salary or not. The nuclear industry is not exactly a large one, and I'm sure that if this person walked away, at the next Conference on Nuclear Whatsies and Whoosits, their name would come up as 'that guy'. Don't be 'that guy'.

Anonymous said...

I have a somewhat related question, out of sheer curiousity... What should the individual in question do if he/she simply likes the posistion currently held better (for a reason other than pay)?

Would it be ethical to say, "I'm so sorry but I have been working for another organization, and I would like to stay put?"

Honestly, I am glad that I work in a field where they do regular ol' background checks and you can start within a few weeks.

Anonymous said...

The HR professionals here aren't going to state that one of their ilk screwed up. But, that's exactly what happened. The fault here lies with the company on several levels.

For one, it is unbelievable that a company would offer a candidate a job and then leave them unemployed and uncompensated for a YEAR or TWO after supposedly giving them that job. What exactly is the candidate supposed to do during that time? How is a person supposed to live? If the company really wanted this person after two YEARS, then they should have had them working in a lower-level capacity that didn't require a clearance. Then the candidate could at least eat and pay rent and not be tempted by other offers.

Further, not only is the company making the candidate wait one or two YEARS, but then they offer no benefit to actually waiting that long. Where's the signing bonus? Where's the extra pay for waiting TWO YEARS?

Finally, salaries can and do go up over time. A salary that was good two years ago may not be appropriate today due to inflation, changes in the job market, increased skills, etc. This candidate is not the same person they hired two years earlier. He has more skills today due to two years of on-the-job experience at another employer. He should expect to be able to walk in and negotiate an increased salary based on his additional experience gained over two additional years of work that were not previously on his resume.

Ask a Manager said...

Anonymous, that's how security clearances work. They're issued and required by the government, not the employer, and the employer legally cannot permit the employee to do the job without one. Here in D.C. where a lot of jobs require clearances, people are used to this and know the deal when they apply for jobs that require them.

Evil HR Lady said...

I agree. This would burn a huge bridge.Bummer, eh?

Anonymous said...

While I appreciate all the comments made supporting the employer, haven't we all heard stories of newly hired employees being laid off b/c the employer's economic situation has changed?

Why is it morally OK for an employer to lay off an employee at any time (to improve the bottom line), but it's not OK for this employee to make the same sort of decision for the same reasons?

If employers want people to begin acting with more integrity, they need to show some themselves.

I agree that not taking the offer will probably burn a bridge. But, companies have treated people like disposable, throwaway trinkets and they shouldn't be surprised by the decision not to accept the offer and start to work there.

Hazelthyme said...

Why is it morally OK for an employer to lay off an employee at any time (to improve the bottom line), but it's not OK for this employee to make the same sort of decision for the same reasons?

Not actually an analagous situation. Yes, in the absence of a contract, most states allow either the employee OR employer to terminate the relationship at will. Employers can lay employees off to improve the bottom line; employees can resign to pursue better opportunities (whether what's better is the salary, the working conditions, the commute, whatever).

But that's really not what we're talking about here. In this case, it's a question of the employee's acting in bad faith. S/he accepted the job knowing what the salary would be, and knowing s/he'd have an extended wait for a security clearance before officially being able to begin. Backing out now, after the employer's invested considerable time and money selecting him/her *and* obtaining the security clearance, is no different from accepting an offer, then reneging a day or a week later because a better offer came through after all. I'd say the same thing if it were the employer backing out of the deal in bad faith (i.e., the new hire quits her current job, sells her house, moves to a new city ... only to have the employer decide a week or 2 later, "Oops, we really didn't want to fill that position after all.")

Obviously, sometimes circumstances change dramatically without warning. If either party *has* to back out, because something drastic and unexpected happened (the company was bought out overnight, and no one saw it coming; the employee's spouse or child suddenly took ill and s/he needs a job closer to home), I don't think anyone would hold that against them ... but that's not what's going on here.

Anonymous said...

This is a pretty common situation in government contracting--but if you're an employee of the contractor and not the government, you can bring this up at your annual review and ask for a raise that would put you back in line with the salary you're at now.

Deirdre said...

What's the harm in asking? If I had a candidate who had waited that much time and had been working, I woudn't mind at least having the conversation.

Are there additional knowledge, skills and/or abilities that this most recent position has added?

If a candidate approached me with this - I have been working in this current position at a higher rate and wondered if there is anything additional that could be considered in the salary? I would at least review it.

Chances are the answer will be no but it is most definitely no if she/he doesn't ask.

Hank Hill said...

AAM- yes, it is common that the government will require a clearance and that the process can take time. However, making them wait 2 years like that is not common.

Most companies of this sort will have work available that does not require a clearance that one can perform while waiting for the clearance to come through. I know because a friend of mine just went through it for 18 months.

Melissa said...

I agree that it would be unethical since the person knew that it would be a wait going into the situation. Not good to burn this bridge.

After starting with the company, I would surmise that there would be a probationary period and a review at the end of said period. If the review is stellar, possibly the person could see if the company would be willing to entertain a performance-based raise (with no mention of the previous job/salary, of course).

Sphaeron said...

You sound at least a little enthusiastic about the Company X job itself. More importantly, as we can all see, this type of clearance is not easily obtained. For the long term perspective, keep in mind that taking the job with the clearance is a huge resume-booster. You will now have a clearance that will open doors for immediate hiring that aren't open to most people. As long as you're young enough to feel that this isn't the company or position you'll be retiring in, working the job with the clearance is a very wise career move.

Furthermore, keep in mind that longevity in any job can't be counted on. A few years back, I took a open-ended contract IT job with Boeing. I was literally introduced to one co-worked by my new manager as the new 'forever' contractor. After a budget cut to the Comanche program I was unemployed only six weeks into the job. Either of your two current opportunities could be lost in the future, but you'll be able to list the fact that you once held such an impressive clearance for as long as you live.

All that being said...

I agree that speaking up about your current salary would be prudent. As one commenter said, when you say nothing you guarantee yourself nothing. I would just make sure it's very clear that you are NOT presenting a new contingency; be sure they know you plan to honor your agreement either way. By doing so, at the very least mentioning the salary cut you're taking will show your new employer how reliable you are. (Not for nothing everybody, but I'd bet many people out there wouldn't even be bothering to solicit an opinion on this situation. They'd have already simply taken their money and walked. 20% isn't a small difference at any pay scale.)

You're factually able to show that you're capable of collecting a better paycheck than they will be offering you. If they can afford to do so and care about the satisfaction of a new employee they've put time and money into hiring, I could see them giving you something. Just don't expect anything--or at least anything too significant--and focus on being happy with your new job, your distinguished security clearance and the doors it will be opening for you.

Best of luck.

Dan Erwin said...

Intriguing question and post. So much so that I checked it out with a couple HR execs. Their comments, not for the record, are that HR blew it, that the employee has a perfect right to reopen salary negotiations, and that, if they wanted him, they'd probably give him the raise.

This happens all the time at exec level.

There is a significant distinction between interpersonal ethics and ethics between person and organization. Although they often overlap, I'm unconvinced that they necessarily are identical.

Although conventional wisdom applies interpersonal ethics to nearly all situations, historical ethics regularly distinguishes between the two. Beware, however. Most popular writers in mags and newspapers take an interpersonal stance.

If however, you were to check out the writing and decision making of Arthur Kaplan, the bioethicist at Penn, you'd find him making the distinction I just made.

Anonymous said...

I don't see the ethical dilemma here.

If for some reason the company ran into budgeting issues, do you think they'd pay severance if they retracted the job offer before the potential employee starts?

If the answer is yes, I'd honor the original commitment.

If it isn't, I think it is foolish not to renegotiate. It's not personal. It's just business.

There is no loyalty from a corporation to individuals, so I see no reason for loyalty to a corporation. (I do believe in loyalty to individuals at the corporation, but if you haven't been there long enough for them to earn your trust, I don't believe that exists yet.)

Ask a Manager said...

Anonymous, lots of places do pay severance if they have to retract a job offer for financial reasons.

Keetron said...

If we assume that the job is a really rare and CV-boosting one, you should just take the job. After going to their offices to take care of all the paperwork, you could mention that you will be accepting a paycut by going to work with them.
Long-term karma is better then a few dollars and you can feel free to re-open negotiations after a year or two.

Mike said...

I'm pretty late to the party here, but it seems to me that if the candidate decides that keeping his/her existing job is favorable to taking the nuclear job as offered, then both parties have nothing to lose by giving the employer a chance to improve the offer instead of making the decision for them.