The Risks of Candidates Climbing Back Down the Corporate Ladder Should you hire people into more junior roles than their last role? You can, but here are the potential pitfalls to consider.
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Our brains have been wired to think about our careers going up the corporate ladder over time. A manager becomes a director, a director becomes a vice president, a vice president becomes a president, etc.
Obviously, there are a lot fewer job positions the further you go up the ladder. A typical company may have 125 managers, 25 directors, five vice presidents and one president. The odds of moving up the ladder aren't really in your favor, with 80 percent fewer positions at each next level.
But, people need to make a living. What happens when an employee needs to go back down the ladder to find more open positions? Is that a good idea for you as a hiring manager to consider that candidate?
Let's find out.
Does the candidate have the right skills?
Let's talk about the sales department as an example. Most "upper ladder" sales managers have been "lower ladder" salespeople at some point in their past careers. It is highly likely and logical that a sales manager has the knowledge and skills required to succeed as a salesperson again but the job of a sales manager is completely different from a salesperson. The salesperson mantains client relationships and closes sales all day. A sales manager manages and mentors the salespersons all day to make sure they are hitting their agreed upon targets. Making that shift back down the ladder really means taking on a completely different job again. You just have to be sure that candidate truly has the appetite for that change.
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Is the candidate willing to do the job required?
Continuing this example, once a sales manager gets used to the tasks of being a sales manager (more in the office, less travel, less repetitive tasks, the prestige that comes with the role) it is, for many, really hard to get back into a quota-hitting sales producer role. But, that is a more of a general guidance. There are exceptions to that rule. Maybe a sales manager got promoted, then realized they don't like managing people -- they actually prefer the "thrill of the hunt." It is really important you ask the right questions during the interview process to ensure that candidate will actually be happy doing the work required in that "lower ladder" position. Understanding that many will say whatever is required to get the job, so buyer beware.
Does the candidate have the right compensation expectations?
In addition to the role changing, the compensation is typically lower at lower levels. So, let's say that vice president was making $150,000 and now they are looking at a director level job that makes $80,000. Once a worker gets used to living off a higher salary, it is really hard for them to make ends meet on a much smaller compensation. The only times that works out is if the role is combined with material other incentives (like an aggressive commission plan or equity upside to make up the difference), or if they are further along in their career and, perhaps, are aware of their need to reset their target role and compensation expectation to have a better chance of getting employed.
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Should you be worried if someone is willing to take a pay cut?
My off-the-cuff answer is yes -- someone willing to take a pay cut should certainly trigger a concern but it isn't necessarily a deal breaker. If other incentives are in place, or there is a logical "story" with this candidate, you may be perfectly fine. Remember, what you gain with an "upper ladder" candidate is all that extra years of experience that comes with that. So, if you can get comfortable with the situation, it is like getting a Porsche for the price of a Toyota. But, buyer beware.
Is the candidate a flight risk just waiting for a better position?
Once somebody gets used to getting paid at a certain level, they are going to try to maintain or exceed those levels in future jobs. If they are taking a job with you at half the compensation, without a matching good "story" or incentives, that opens the door to those candidates continuing to look for new jobs, even after they have accepted yours.
Again, that is a general rule of thumb. That may not be the case in all scenarios, so do your due diligence and make a judgment call. For example, someone looking for their last job before they retire could be perfectly fine and worth the risk.
Do they have the energy for job?
Generally, a person's energy declines with their age. But, that is not always the case. I have worked with many people in their 60's whose energy levels exceed that of people in their 20's. Another way to think about this: older "upper ladder" employees are typically more efficient in how they work. They may lack with energy but offset that with efficiencies they have honed with their prior years of experience.
Can a candidate going down the ladder ever be a good hire?
My colleague Todd Zaugg, CEO at Matrix Achievement, told me "Our company has trained over 40,000 salespeople over the years. I have seen many situations where moving down the corporate ladder has resulted in success and many other situations where it has not. In our experience there is no direct correlation between the previous upper ladder experience and sales success moving back down into lower ladder positions. It all comes down to the individual and do they or don't have have the right skill sets, desire and incentives to be successful in that lower ladder role".
A lot of things have to go right for someone going back down the ladder to result in a good outcome for your business. But, that does not mean you should close the door on that scenario in all cases. You need to assess each candidate on their own merits. What is their "story"? How do they answer your questions? Do you believe they can live on a smaller compensation and have the energy and appetite to be successful in that "lower ladder" job?
This situation is laden with potential pitfalls, but it most certainly can work out for the best. Do your homework!