The economy is down, the unemployment lines are long, and experienced professionals are getting desperate for work. Great news for the business that is hiring, right? As a business owner, you may be able to score some great candidates for less money than they are worth by lowballing applicants.

Picture this scenario: Your company needs an experienced editor for your online content, and the current market value for the position is $75,000 according to the market research you performed. Sally, one of the applicants, recently got caught up in a merger and lost her job in a company-wide layoff. You think she may be willing to take the job for $65,000 even though she made $80,000 in her most recent position. Her credentials are astounding, and she is the one you can envision taking your business’s content to the next level. She is the perfect match.

Saving money and getting your favorite candidate on the cheap sounds like a no-brainer, right?

Wrong.

You may want to rethink your strategy. There are several cons to lowballing applicants during the hiring process. While you think you may be strategically saving money and making Sally happy by giving her a paycheck, you may end up costing yourself a lot more.

The Dark Side of Low-Balling Qualified Applicants

Sally probably will accept the job. She is out of work, and her bills need to be paid. So shouldn’t she be happy? Well, she probably will be happy that her weekly paycheck will be back. But Sally is smart. She will know that she got taken advantage of. Her happiness won’t last.

Over time, Sally will start to resent her job. She knows she is under paid. She knows she deserves and is worth more. Her efforts and energy will start to decline, and she may begin to spread a toxic morale to the rest of the company. Below is a likely scenario for you and Sally.

  • Sally will continue her job hunt while she is working for you. She will likely use company time and resources to perform her job search.
  • Sally’s performance will suffer. She may go through the motions, but she won’t perform anywhere near what her credentials suggest she should. Her mentality will be that a lowball pay is worth a lowball performance.
  • Sally will become a disgruntled employee. She will be critical of company policies, benefits, and management. She will not respect you.
  • Sally will ultimately leave your company for a job that pays her what she is worth.
  • Sally will spread negative reviews everywhere she can about you and your company.
  • You will have to spend the time, energy, and money to fill the position again.

The Potential Cost of Lowballing Applicants

You spent money recruiting and hiring Sally. You probably invested in some level of training for her too. Sure, you saved $10,000 by lowballing her when she hired on, but how much money have you cost yourself?

  • The cost of a disgruntled employee is high. Her productivity is low, and the quality of her work is at a minimum.
  • You are paying her to search for a new job while she is on the clock.
  • There is a cost associated with the toxicity that her low morale will inevitably spread to other employees. They may wonder why they should put in 100% if she doesn’t. You may even lose other employees because of it.
  • You will have to pay a second time to recruit and hire a replacement for Sally after she quits. You will likely have to pay more for a new candidate as well. You will still have to train the replacement and hope that he or she sticks around and produces quality work.

Alternative Scenarios to Lowballing Applicants

The scenario outlined so far isn’t the only potential outcome of lowballing applicants in the hiring process. Several other outcomes could have developed instead. There are many potential consequences to undervaluing potential employees.

  • Sally may have realized that it was better to continue her job hunt rather than accept your low offer. She turns you down.
  • Your only other potential candidate was Joe, who was nowhere close to the same level of professionalism or quality as Sally. But you hire Joe because he accepts the desired salary level.
  • Joe is a consistent low performer, and one of his mistakes costs you a large client.
  • You have to fire Joe.

Think it Through

There is an age-old saying that holds true time and time again. You get what you pay for. If you value your business and want your employees to work hard and produce results, you should compensate them for what they are worth. Asking potential applicants to take a significant pay cut will only cause issues down the road. By trying to cheat a qualified applicant, you are only cheating yourself and your business’s bottom line. Would you rather pay a little more money for top talent or cost yourself double or triple while making a critical hiring mistake?

 

writer Melissa Ricker

 

Melissa Ricker is a nuclear engineer and a professional freelance writer specializing in career growth, technical writing and online entrepreneurship. She writes a blog, Engineered Motherhood, for working mothers who need help balancing career growth and time management. 

 

 

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3 thoughts on “The Cons of Lowballing Applicants in the Hiring Process

  1. I agree. I used to be overcautious about every dollar spend on my business, but learned the hard way that it actually helps more to be generous than stingy.

  2. This is all too true. Unfortunately, I found myself at the employee’s end of the lowball stick, so I know how it feels. And it’s not pretty. At all. How was it for me? Let’s just say I was underpaid by a whopping $20,000, so much that my dreams of finally moving out in my late 20s was instantly crushed. That’s how bad it was. Needing a job, I just took it even though I should have walked and saved the hassle and the 5 months of torture that I had to endure before I ultimately got fired. Lesson learned.

    1. Sorry to hear that, Christopher. And unfortunately, it’s a horrible experience that I’m sure a lot of workers can relate to.

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