Our brains have been wired to think about our careers going up the corporate ladder over time. A manager, becomes a director, becomes a vice president, becomes a president, etc. But if you think about that structure, there are a lot fewer job positions the further you go up the ladder. An example typical company may have 125 managers, 25 directors, 5 vice presidents and 1 president. So, the odds of moving up the ladder aren’t really in your favor, with 80% 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 to consider that candidate as a hiring manager? Let’s find out.
Does the Candidate Have the Right Skills?
In this post, 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. So, it is highly likely and logical that a sales manager most likely has the knowledge and skillsets required to succeed as a salesperson again. But to be clear, the job of a sales manager is completely different from a salesperson. The salesperson maintains client relationships and closes sales all day, and a sales manager manages and mentors the salespersons all day, to make sure they are hitting their agreed upon targets. So, 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.
Does the Candidate Have the Willingness 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), for many, it is 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, and realized they don’t like managing people, and actually prefer the “thrill of the hunt” of being a salesperson. So, 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 at lower lowers, 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 older in their career (having built up a big savings account to live off of, and perhaps are self-aware of their need to reset their target role and compensation expectation to have a better chance of getting employed at their age).
Should I Be Worried If Candidate Willing to Accept a Pay Cut?
My off the cuff answer is yes, someone willing to take a pay cut could certainly trigger a concern. But it doesn’t necessarily mean it is a deal breaker. As discussed above, 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 again, buyer beware.
Does the Candidate Present a Flight Right Awaiting Another Position?
Based on my experience of hiring people over the years, 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. So, 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. But 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 judgement call. For example, someone approaching retirement looking for their last job before they retire, could be perfectly fine and worth the risk.
Will They Have the Right Energy for the 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, so whatever you think they may lack with energy, they should more than offset that risk with efficiencies they have honed with their prior years of experience.
Is it Possible for Candidates Coming Back Down the Ladder to Result in a Good Outcome?
As you have read above, 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 on the above topics? 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!
George Deeb is a Partner at Red Rocket Ventures and author of 101 Startup Lessons-An Entrepreneur’s Handbook.