Archives for April, 2023

Job Seekers Update: Companies are Firing…not Hiring

Overall, hiring has dropped 75% in 2023. Companies are firing, not hiring. If you are looking for the RDAV (Reader’s Digest Abbreviated Version), there you have it. For those that like the details…here we go:

  • Job Growth – The headline shouts, “Payrolls Rise 311,000; Job Growth Stays Hot!” What? Open jobs actually declined by 400,000 from 11.2MM to 10.8MM in February. Those 311,000 are people forced back in from the sidelines by two years of historic inflation. Inflation was 6% in February. Is it better than 9%? Of course. But consider this, inflation was 1.6% two years ago and has exceeded 5% for 22 straight months. Put another way, if you get a 5% raise this year you are actually losing money. 
  • Silicon Valley Bank: The Two Big Lies – Does SVB stand for “Silicon Valley Bank” or “Seems Very Bad?” The headlines scream “No Bank Bailout!” and “Government Won’t Use Taxpayer Money!” Both of those are a lie. First, a “backstop” IS a bailout. The government buying up bad debt IS a bailout. Second, the government does not have any money. They are $31T in debt. All of their money, every dime, IS taxpayer money. “Everyone stay calm – there is no systemic risk.” That…is also a lie. This is far from over. 
  • The Budget Crisis – As I said months ago, this is your next calamity in the “perma crisis” (defined as moving from one crisis to the next). For the last two years the government has debt financed an absolutely historic spending spree. There are now 20 hard line conservatives in Congress that will insist on spending cuts tied to the budget. At some point you must spend less than you take in. But the U.S. Government has a better solution: Increase taxes on successful people that already pay 37% a year, and triple the capital gains tax. That is not going to fly in this Congress. Get ready to rumble! 
  • Recession 2023 vs. Depression 2.0 (2008) – There is a huge difference in the employment market this time around. Depression 2.0 in 2008 literally crushed the hiring market and millions lost their jobs. In August 2008 I had 20 open searches. Two weeks later I had zero searches and didn’t place a single executive for three months. This year, despite the downturn, layoffs, raising my rates and requiring Retainers, I have 25 active executive searches. New searches come in every day. 
  • The Layoffs – Companies have shifted from hiring to firing, and a number of major gaming companies are quietly laying off. How do I know? Because I get the resumes of those in the RIF. Ladies and gentlemen, we have not hit the bad part of the road yet. America has suffered through two years of historic inflation that has crushed the middle class and working poor. I see people in their 70s re-entering the workforce because they can’t get by on Social Security. We have not crossed the wide part of the Recession River yet. Get ready to pay for those government benefits you thought were free.
  • Quietly Quitting Turns into Quietly Firing – How quickly and dramatically things change! Last year candidates wanted to double their salary and work remote. This year employers are trimming the herd and forcing workers back to the office.

Job Seekers: Advice for the 2023 Recession

The best recruiting advice I ever received was back in 2004 when I first formed my executive recruiting business. It came from the Founder of a highly successful retained search firm, “Mark, unemployment is 4%. Everyone is working. No one cares about you or returns your phone call. People will dismiss you. People will treat you poorly. But one day, my friend, the pendulum with swing, and your cell phone will light up like a Christmas tree.”

That day was August 2008 when Depression 2.0 hit. And again this year as hiring fell an astounding 75% over the last three months. Unfortunately, we are nowhere near the bottom. Historic government debt, consumer debt and inflation have created the perfect storm. Fed will raise interest rates several more times this year. Here are five important tips for job seekers during a Recession.

Understand the Market Conditions: Companies are not hiring, they are laying off. If you are in the job market understand this: Things have changed dramatically in 2023. This is now a buyer’s market (hiring companies). If you got laid off and expect to receive three job offers in a week…you are going to be very disappointed. Expect the Recession to last another 12 to 18 months. In a down market you have to be flexible on compensation and relocation, which are the next two subjects.

Compensation: This is the number one issue I see with candidates: Unreasonable compensation demands. THE GOLD RUSH IS OVER and we are nowhere near the bottom. This is going to get very, very ugly. I get it: Anyone that tells you money doesn’t matter…doesn’t have any. That stated, be reasonable about compensation. If you are unemployed, be flexible. Executive Recruiters shy away from unemployed people asking for huge salary bumps.

Relocation: Most of the remote and hybrid opportunities are gone. It was awesome while it lasted, right? If you insist on working remotely you may be on the beach (unemployed) for a long time. To find the best long-term career opportunity, there is a pretty good chance you will have to relocate. If you can’t relocate, work with an Executive Recruiter LOCAL to your city – they will have the local jobs.

Cost of Living: COL matters! Had a candidate making $175,000 in Los Angeles apply for a $175,000 role in Las Vegas. That $175,000 LA compensation is $125,000 LV dollars. California has a 13.2% state income tax; Nevada is zero. You will not be getting your Los Angeles salary to live in Las Vegas. Cost of living matters.

Spamming Your Resume: Be careful about casting a wide net. Submitting your resume to five Executive Recruiters does not get you five times the career opportunities. In my case, I won’t work with executives that are spamming their resume to a thundering herd of recruiters and applying to online jobs. Approximately 85% of career opportunities come from your peers and 10% from Executive Recruiters, so applying online is akin to playing the lottery.

The Godfather on Compensation: Anyone that Tells You Money Doesn’t Matter…Doesn’t Have Any

My name is Mark Wayman, and for the last 20 years I have owned an executive recruiting company focused on gaming and high tech. Occasionally I author career articles on LinkedIn. Today’s topic is compensation. What is the market rate for your job? What is the best strategy for negotiating salary at a new job? Recently dealt with several wonderful people that totally screwed the pooch. They were so obsessed with money that they lost out on fantastic career opportunities. So I’m offering you $25,000 of career counsel…pro bono. But first, three disclaimers and the three golden rules of executive recruiting. 

Disclaimer #1: Only Represent Candidates I Know Personally or by Referral – My clients expect me to personally vouch for each and every candidate, and I can’t do that with people I don’t know and have never met. No disrespect intended! 

Disclaimer #2: I’m Not Here to Judge, That’s God’s Job – My only purpose is to provide career guidance based on my many years of experience. Hopefully it helps a few people. 

Disclaimer #3: Why I Love America – We can agree to disagree and still be friends! I welcome all opinions and viewpoints provided they are professional and respectful. Trolls will be deleted and blocked. This is not Twitter. 

Executive Recruiting Rule #1: Executive Recruiters get people for jobs…NOT jobs for people. As the Owner of an executive recruiting firm, I don’t get a salary or vacation or PTO or paid health insurance. If I don’t get people placed…I don’t eat. I’m not a career coach or resume writer, and I can’t represent executives I don’t know, have never met. No disrespect intended.  

Executive Recruiting Rule #2: The wrong time to meet an Executive Recruiter is when you are unemployed. The best time to find a new job is when you are gainfully employed. If you don’t have one or two solid relationships with a top Recruiter, ping your professional network for referrals…while you are gainfully employed. 

Executive Recruiting Rule #3: Executive Recruiters work with people they know personally. The best Executive Recruiters work exclusively with executives they know personally, or that were referred through their professional network. 

The $66,000 Question: Why? – If you are considering a career change, this is THE question. What is your WHY? Money? Title? Career advancement? Need to relocate for family reasons? If your “why” is money, I hear you. Anyone that tells you money doesn’t matter…doesn’t have any! That stated, the best strategy is to lay out a five to ten year career plan. Always start with the end in mind. Each job change should move you closer to your end goal. Slow and steady wins the race. 

Determining Your Market Value – Candidates constantly ask me if they are being compensated fairly. The market rate is determined by your education and experience, along with supply and demand. The Pandemic was not only unprecedented, it created a huge demand in the job market as people retired, quit, or decided to live off the government dole. Salaries escalated 10% to 25% as desperate companies offered well above market value to fill positions. As an example, the “market rate” for a Director (F&B, Technology, Finance) is $125,000. Now a Director goes for $125,000 on the low end and up to $200,000 on the high end. For me, I don’t believe in salary surveys. I believe what the market tells me, and with 20 to 50 searches at any one time I know the going market rate. There are two ways to get this information, your professional network or an Executive Recruiter. If you are a CFO, ping your CFO friends and ask their opinion on compensation rates. Hopefully you know one or two solid Executive Recruiters. They will be happy to share that information with you. 

The Down Side to Being Overpaid – One of the challenges with executive recruiting is candidates that are vastly overpaid. And in most cases these folks believe they are undercompensated. Wynn Resorts and Venetian are prime examples. A VP role at these properties may pay $250,000+ when the going market rate is $200,000. Wynn and Venetian pay REALLY well, and God bless them for that. But when you leave, your compensation is going backward. So I get VPs making $250,000 and asking for $350,000. Again, market rate is $200,000, so you see my issue? That is not going to be a good use of my time. Here is another down side to being overpaid – when the bottom falls out of the economy you have a big target on your back. All those hires that were overpaid due to the Pandemic will be the first executives laid off. 

Ask for the Salary Compendium (Salary Range) UP FRONT – I knew a CIO making $200,000 that spent two months interviewing for a new role. He flew across the country twice, and then the company offered him $150,000. Lesson learned: ALWAYS ask for the salary compendium up front. And if the company won’t tell you the target base salary, don’t interview. We can get more of everything…except time. Don’t waste your valuable time interviewing for a job that does not meet your compensation requirements. I always have the money straight before investing the time of a candidate and client (hiring company). 

Your Bonus and Stock Options Are NOT Relevant (Don’t Do This!) – This is a Pandemic thing as well. Had several candidates totally blow up their chances at great jobs because they are disconnected from the economic realities of 2022. First they told me about their 2021 bonus. But this is not 2021, and the US is heading into a brutal recession. Bonuses this year don’t look like last year. And in 2023 you will get no bonus at all. Then they bring up their stock options. Most of the gaming stock are down 60%. You can paper your laundry room with your stock options. Pigs get fat; hogs get slaughtered. 

Never Change the Goal Line (Don’t Do This!) – If you are first and goal from the five, you can’t change the goal line. Translation: If you agreed to a $100,000 base salary prior to interviewing, asking for $150,000 at offer time is a terrible strategy. Yes I have seen it work two or three times over the last 20 years, but I have seen it fail 50 times. Why? Because it goes to integrity. You agreed up front that the compensation was acceptable, so changing the number at offer time goes to character. Most companies will dump you like a hot rock. In several instances I have seen candidate do this, not get the job, then be terminated shortly thereafter and spend six to twelve months in the unemployment line. Karma is a ruthless gangster. 

Never Fight Over Nickels  – You interviewed well; you love them, they love you. Time to close the deal. Ask yourself this important question, “Do I really want this job?” If the answer is yes, don’t fight over nickels. When the Pandemic his in 2020 I have two big job offers out: CIO and VP, Sales. Both candidates started negotiating the compensation plan, line by line. Two weeks later the Pandemic hit and both job offers were rescinded. The longer this takes…only bad things will happen. A tremendous amount of time and effort was expended by you, the Executive Recruiter and the hiring company. Don’t get greedy. 

Dealing with the Lowball Offer (Negotiating) – Unfortunately, not all companies play fair. Let’s say I represent you for a CFO job at $300,000. You do great, but the hiring company offers your $250,000. What the hell? This happens, and more than I would like to see or admit. In most cases the offer is low because, after the interviews, the company does not feel your market value is $300,000. That is their right. So here is the best way to handle it. I will call the candidate with the verbal offer and give them three options: Accept, Decline, Counter. The first two options are pretty obvious, but let’s discuss “counter.” You can decline the original job offer and come back with a compromise. For example, $300,000 period. If they don’t come up, you are done. Or go back with $275,000 and a few enhanced perks in the overall compensation package. Usually additional stock options. Once placed a General Counsel years ago. They lowballed her, but I doubled her stock options. When the company was acquired two years later she made millions. But keep in mind, the counter is your line in the sand. Once you counter, if the company accepts, you are committed to the job. 

The Answer is YES! – If you accept the offer verbally, the hiring company will send you a written offer and start the onboarding process. There are several mistakes you can make at this point in the process. First, using the offer letter to solicit a counter-offer from their current employer. The biggest career error of all time. See the paragraph below. Second, using the offer to leverage an offer from a second company, playing one off against another. If you have multiple irons in the fire (multiple interviews concurrently), good for you, but be honest and tell the Executive Recruiter and/or hiring company. Pick the job that is right for you, however if you hold off for “something better” you are telling the employer they are not your first choice. If they were, you would have already accepted their offer. Third, if you say anything other than “YES”, you have declined the offer and it is no longer valid. Just like buying a house. Big tip – say YES. Praise Jesus! 

NEVER Accept a Counter Offer (Don’t Do This!) – As George Thorogood once said, “If you heard this story before, settle in, because you are going to hear it again.” As a candidate, COUNTER OFFERS ARE A TERRIBLE STRATEGY. My completely unscientific survey shows nearly 100% of those that accept a counter offer are terminated within twelve months. Why? First, because now your employer knows you are unhappy. They will keep you around just long enough to replace you. Second, do you really think your Boss likes you twisting his arm to get a few more nickels? Third, if you were happy, you would not be interviewing with another company. A small raise won’t change that. From a career standpoint, wasting everyone’s time so you can get a few more shekels goes to character. As Walt Disney so eloquently stated, “It’s a small, small world.” Especially in gaming/casinos. It will come back to haunt you – Karma is real.

5 Career Lessons for the Recession

Historic inflation, rising interest rates, a Pandemic and a War. The results is a disintegrating stock market (housing market will follow) and downward spiraling economy. From many respects, I have seen this movie before (2008). In the job market, the pendulum has swung and layoffs have commenced. Here are five important lessons we can learn from a Recession.

  1. The 25% to 50% Salary Increases are Over – Everybody out of the pool, the party is over! For the past two years people have been asking for massive raises and getting multiple offers. That is awesome…until it’s not. People that were overpaid now have a huge target on their back. They will be the first to be laid off as companies trim payroll by 10% to 20%. Overcompensated people go first.
  2. Counter-Offers – Such a terrible career strategy, yet one thousands utilized during the Pandemic. Candidates would interview, get a job offer, and then run back to their current employer, “If you can match this, I’ll stay.” Let me explain why that is a bad strategy. First, almost 100% of those taking counter-offers are terminated within 12 months. Do you think you employer really wants to be leveraged into give you a raise? They will keep you around just long enough to replace you. Second, now that the economy is spiraling down, who do you think get laid off first? Those viewed as disloyal. Third, you wasted the time of the hiring company and the Executive Recruiter. Burning bridges is a terrible idea, especially in the gaming industry where everyone knows everyone. Karma is a ruthless gangster.
  3. Your Network is Your Lifeline – It’s amazing how many people believe, “It won’t be me!” News flash: No one is indispensable. Today you are family; tomorrow you are terminated and they are enforcing your non-compete. Stay in touch with your peers. Did you know that 85% of job opportunities come through your professional network? Develop a strong relationship with one or two Executive Recruiters. They have 10% of the career opportunities, and typically the best 10%. These are your lifelines during a Recession. Relationships trump transactions.
  4. Don’t Stockpile Debt – With rapidly rising interest rates, those with variable rate mortgages and credit card debt are going get clobbered. Consumer and credit card debt are at record levels. Keep your overhead low so if you lose your job, you don’t lose your house. As my Dad used to say, “If you can’t pay cash…you can’t have one.”
  5. Always Have a Rainy Day Fund – Have a six to twelve month rainy day fund for when the storm hits. I was fired exactly one time in my life. Back in the 1990s when I tangled with my Boss. The most embarrassing part was that I carpooled, so I had to sit on the curb for an hour waiting for my ride. As I sat on that curb I made two commitments. First, I would always have a rainy day fund of 12 months free cash flow. Second, I would never work another day in my life at a job that made me unhappy.

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The Good Samaritan: Carefully Consider Your Legacy

Most of us are familiar with this parable from the Bible. A Jewish traveler is robbed, beaten, and left half dead alongside the road. A priest and a Levite come by. Both avoid the man and keep walking.

Finally, a Samaritan happens upon the traveler. Although Samaritans and Jews despised each other, the Samaritan helps the injured man. Jesus tells the parable in response to the question, “And who is my neighbor?” The conclusion: The neighbor is the one that shows mercy to his injured fellow man.

There are three types of people. The first is the robber who beat the man. Criminals that have no regard for life. We are experiencing a historic crime wave in America. There is no shortage of criminals.

The second are the self-focused and self-serving. Their question is, “If I stop and help this man…what will happen to ME? How will it affect ME?” The world is full of people that horde their money, cars and houses, while completely ignoring the hungry and downtrodden around them. They only think about themselves and never consider what is best for the community or society.

Finally, there is the third type: The Good Samaritan. They ask a different question, “If I don’t stop and help this man, what will happen to HIM?” Carefully consider your legacy and which of the three you want to be.