A client recently lamented, "My portfolio says I'm worth about a third of what I was last year. My former company said I'm not worth paying anymore, and by the way, pay us now for your health insurance if you want to keep it. My house, even with the new historically hospitable paint job in Chestertown Buff from last spring, would sell for about a third of what it would have sold for a year ago...if a buyer could even be found. And now, after an unplanned and protracted lay-off, I actually have a job offer but I'm finding it difficult to be really excited about it. I think there's something wrong with me."
Let's start at the beginning of this tale. This client, a successful executive, was the victim of the downturn a year before it hit Main Street. Even before the word recession was being hatched in the collective unconscious, companies were no doubt seeing a future that called for some retrenchment in order to survive what they saw as inevitable. With her comfortable severance package and a strong resumé, at first the lay-off seemed more like a much-needed break from the rat race. A time to renew. A time to consider options, soul-search, volunteer, and finally embark on a health kick that would ultimately result in a near 80-pound weight loss. "What, me worry," was more likely the refrain than "Why me!" What a difference a year makes.
So why the languorous lament? One of the obvious issues is that her current offer, while well-paying by most Main Street perspectives, offers a lower base salary than her previous position. And, while this is not a TARP-funded company, the bonus opportunities are equally as diminished in contrast to the incentives given in her last gig.
Welcome to the Brave New World.
While the new order may or may not present a huge paradigm shift in the way we are compensated, executives have very real concerns about their perceived value in the marketplace. "If I take this job at this salary," she worried, "I will have just taken a huge step backwards. And when we come out of this recession and I go to get my next job, they will base an offer on this lower salary level." I had only three comments: First, I reminded her that her worrying in advance is too easy -- because no one has a crystal ball. Second, I told her to be grateful that she had secured a respectable job offer at a solvent company. And finally, I suggested she also volunteer at a soup kitchen!
On a practical level, and as a former executive recruiter, I can say that no matter what happens with executive compensation going forward, 2009 will live in infamy. Just like previous economic downturns, a personal salary downturn will be easily explained in the future. I can't tell you how many resumés I've seen that have shown that year-long blip that was the tech bust of 2000-2001.
But there is a phenomenon going on for my client and others that runs even deeper. Many of us measure our self-worth by what others are willing to pay for our services. While motivators are as varied as occupations, there are few righteous among us who work solely for the good of our fellow man. We can also develop -- after years of dues-paying, self-sacrificing, ladder-climbing efforts -- an unhealthy sense of entitlement.
In 2009, a job itself is a coveted commodity. It's really not about your perceived value. As my client soon came to understand, right now it's about affordability and practicality. And regarding her worth, she's still the same person she was. She's back to thinking about building her new team, leading it as she always has -- with strength, strategic thinking, humor, and a high level of emotional intelligence. The compensation model has changed out of necessity, but her value in the marketplace has not.