"Standard Salary Increase" when hiring Thai staff

[SirMuttley]

Wasn't sure where to post this so hope I guessed right.

This to me smells like a scam for a recruitment agent to increase their commission; however, I thought I'd ask here.

We're trying to make an offer to a Thai software developer to join our team. The agent is insisting that there is a Thai "Standard Salary Increase" of at least 15% to 20%. Meaning that whatever we offer the guy should be at least 15% higher than his current salary.

To me this makes no sense, I pay people on their skills not on their previous salary. Where is the motivation to improve yourself if you only need to get a new job every time you want a salary increase? Frankly his current salary is already pretty good and we what we want to offer is only about 7% more.

I've asked some Thai friends and they all seem to think it's nonsense too. So just wanted to ask if anyone hear had heard of such a thing before I tell the agent where to stick it.

Cheers.

[Don Mega]

7% is not a lot of incentive to have a person quit their job to come and work for you.

[sustento]

Where is the motivation to up sticks and move to a new employer if he's only going to give you slightly more than you're getting now?

[SirMuttley]

7% is not a lot of incentive to have a person quit their job to come and work for you.

Sure, if we were only offering that. But we feel a big incentive is the skills increase they would get. Thai developers lag behind western standards from what I've seen. We're prepared to pay him based on his current skills, but he would be exposed to a lot of things that would greatly benefit him.

But that's not my concern. If he wants to move for money over opportunity that's up to him. What concerns me is that the agent is lying to me, I'm just trying to establish if they are.

[mrtoad]

It's the Employers right to dictate the terms of the salary, not the recruitment agency.

People switch jobs for end number of reasons, not always due to salary.

[SirMuttley]

Where is the motivation to up sticks and move to a new employer if he's only going to give you slightly more than you're getting now?

As I said above there are more benefits to moving than just money.

But that's really not what I'm trying to get at. Is my agent lying to me?

[SirMuttley]

It's the Employers right to dictate the terms of the salary, not the recruitment agency.

People switch jobs for end number of reasons, not always due to salary.

I agree, my concern is that the agent has is telling the candidate that he should be expecting this sort of increase.

They wanted to handle the salary negotiations as they "understand thai culture", but it seems like a massive conflict of interest given they receive a nice commission on whatever the final salary turns out to be.

I just wanted establish if such a salary increase standard really exists and I don't "understand thai culture" or if they're just trying to increase their commission.

[mrtoad]

Of course for the recruitment agency, the higher the salary - the higher their commission.

Having used several recruitment agencies in Thailand, they are generally the last people I'd want to take advice from.

[Soutpeel]

Its the agency trying to gouge you

[Pib]

7% is not a lot of incentive to have a person quit their job to come and work for you.

Sure, if we were only offering that. But we feel a big incentive is the skills increase they would get. Thai developers lag behind western standards from what I've seen. We're prepared to pay him based on his current skills, but he would be exposed to a lot of things that would greatly benefit him.

But that's not my concern. If he wants to move for money over opportunity that's up to him. What concerns me is that the agent is lying to me, I'm just trying to establish if they are.

You are assuming the potential employee sees possible skills increase as an incentive; he/she may not. Easy for a potential employer to say such things.

The potential employee may primarily be looking for a significantly increased salary/benefits before jumping from a job that's paying the bills/he may be OK with. And just maybe the guy may have told the agent he don't want to change jobs "unless he gets a certain X-amount/percentage increase in salary/benefits."

[sustento]

7% is not a lot of incentive to have a person quit their job to come and work for you.

Sure, if we were only offering that. But we feel a big incentive is the skills increase they would get.

That's a two edged sword. If you offer them a job with a big skills increase but a small salary increase you're offering them free training to move onto a better paid job later at your expense.

[CMCMANGOMAN]

Of course the agency is lying. They are Thai. For example, I asked my Thai wife what is number 1 sin in Buddhist Thailand by Thai people. She thought about it for about a split second and said LYING! She quickly added that everything bad in Thailand starts with a lie and gossip. She said even when Thai people want to do something good it probably involves a lie of some sort.

I began to consider this while remembering past dealings with Thai business people and others and rightly concluded that her statement was fairly true. In my experience.

Furthermore, I observed that one of the most often used words in Thailand is the word "WHAT?" And that word spelled phonetically looks like this: a-lie.

Coincidence or bitter irony? Draw from your own experience. TiT.

[oneday]

Your instincts are right. There is no such thing as a standard salary increase when moving from one job to another. This is obvious for the very reason you stated. Quit your job every few months and in no time you'd be making a fortune.

[AlQaholic]

Why is there an agency involved???

[Crash999]

Is this your first time to use a recruitment agency? Normally they will do the various negotiations on your behalf because that's part of the service included in their fee. Sure there is some incentive to boost the salary but ultimately they get zero if it's not a good fit so their biggest goal is to find a workable match between you and the candidates.

There's no set incremement one must give when recruiting but as already mentioned if you don't give 15-20% (or something else in lieu) then it's unlikely a candidate will want to leave their current job, especially if they are doing well there. Joining you for them is a risk- as for various reasons they might be doing okay now but it doesn't work out with you and they don't pass probation.

If a candidate is already highly paid in their position (relative to the market) they generally know, or the agent can help to tell them. In such case they may understand why you can't offer more but there still needs to be tangible compelling reasons for them to leave their existing good situation and join you.

I once had to convince a person to join our team with a higher salary but lower job title. She was very concerned regarding how it would look on her resume in future so I had to put myself in her shoes. Finally was able to convince her to join our team by emphasizing that she would be managing a much bigger business at a company with a great name in the market and we just simply had a different expectation of responsibilities for certain titles. To do that I agreed with the recruiter to set up a call. What was also important was for her to feel comfortable with me being the head of her future office.

If there truly are compelling reasons beyond the 7% additional salary you're offering then it's up to you and the agent to convince the candidate.

I wouldn't say the agency is trying to boost their income. They likely know the personality of the candidate and his or her expectations, and offering more salary is the norm when recruiting candidates that are currently employed.

[Mikkihiiri]

Totally agree with you. I have been working 5 years in BKK for a German multinational and did dozens of job interviews. If you offer an interesting position with the possibility to grow and a good treaining plan the person should show much more interest into his career than the money.

He should than first shows his capabilities and skills and then he should get a good salary increase.

[Ulic]

Lots of reasons to change jobs besides money but also lots of reasons to decline a job change, especially

if only a 7% increase in pay. One thing is for sure I would not hire someone who really did not want the job,

and the only reason they were changing jobs was a 7% increase in pay.

[GarryP]

7% is not a lot of incentive to have a person quit their job to come and work for you.

Sure, if we were only offering that. But we feel a big incentive is the skills increase they would get. Thai developers lag behind western standards from what I've seen. We're prepared to pay him based on his current skills, but he would be exposed to a lot of things that would greatly benefit him.

But that's not my concern. If he wants to move for money over opportunity that's up to him. What concerns me is that the agent is lying to me, I'm just trying to establish if they are.

You are assuming the potential employee sees possible skills increase as an incentive; he/she may not. Easy for a potential employer to say such things.

The potential employee may primarily be looking for a significantly increased salary/benefits before jumping from a job that's paying the bills/he may be OK with. And just maybe the guy may have told the agent he don't want to change jobs "unless he gets a certain X-amount/percentage increase in salary/benefits."

I agree with this. All the things you mention are intangibles, when at the end of the day most people change their jobs to improve their bottom line. What you could do is offer an increase of say 7% and if he/she passes probation you will increase it by say 5%. You will certainly know after 3 months whether he/she is worth it.

[patricev]

Try another agency and compare. That one may not have access to the type of staff you need, so they need offer more to attract some candidates. They are all somewhat specialized in one area or another.

On the other hand, I would be suspicious of a candidate willing to take same money to change job, not a good sign. The candidates you want are the hardest ones to get because ... they are good!

[KamnanT]

No such thing as a "standard" increase to move to a new job. If the candidate is considering moving only for money, then they will move again the first time another employer offers them a 10% raise. You have to offer more than just money to retain staff long-term (and it appears that you do). If the candidate isn't interested in the other benefits, you should probably take a pass.

[mike324]

7% is not a lot of incentive to have a person quit their job to come and work for you.

Thing is how do you know he is not out of a job to begin with? my company does interviews almost everyday, most fresh college grads are still asking for 15,000 baht and up because "the government said so", given that out company is located outside of Bangkok the average rates are around 12,000 baht for normal office work.

I think people should pay what they are willing to pay and perhaps slightly above the average if the person is skilled in a field. Paying average won't get you any quality skilled workers as there is a shortage of workers and skilled workers are high in demand.

Most companies will have a grace period of 3 months or so before they extend the contract or give them a raise, that is the norm.

[scoutman360]

I don't agree that most people change jobs to improve their salary. In my experience, leaving starts with work environment dissatisfaction. I know far more people that love their job and stay because they love their job, despite their low salary. While salary is important, it usually is not the first reason why they are quitting. Once that decision to leave is made, however, then salary for the next job plays a more important role. You can offset that expectation by showing your company offers a better work environment, and better opportunities. If their current salary is already high, then they already know they are at the top.

[Don Mega]

7% is not a lot of incentive to have a person quit their job to come and work for you.

Thing is how do you know he is not out of a job to begin with?

Yeah if you read the OP where it is mentioned "they are trying to make an offer" and also the mention of the "salary increase" by the agent.

Both suggest that the person is currently employed.

[8OA8]

Sounds just like Estate Agents, will do their best to convince a seller not to accept a lower offer because of the commission.

[mattsilver]

"Standard" salary increase? Sounds more like the agent is a "fishin' for commission". I'm an independent contractor and occasionally work through a trusted headhunter (US term; maybe other countries, too?), aka, an "agent". I state my salary requirements, and they put me in touch with prospective clients. Of course they tack on their additional fee. I am bound by confidentiality clauses not to discuss my rate directly with clients set up by my headhunter, and my clients are similarly unaware of how much of what they pay goes in my pocket. However, the standard profit margin for headhunters in the US (in my field--medical analyst/writer) is a 30% surcharge. So...if my going rate is $90/hr, the client is paying $120/hr for my services (agent takes $30/billable hour). Cool by me--I can and do make more loot if I want to spend the time looking for new clients--used to but not so interested these days.

So it sounds to me like a similar arrangement; however, it also seems like the "agent" is the one doing the bidding here, not the potential new employee. Quite likely that your new hire will be making the same as before (I'm sure the agent is similarly professing the new skills that your employee would make on the new job as a selling point), but the agent is padding his/her pockets. As long as everybody's on the same page, this can be a good arrangement; however, if the dealings are not transparent, then you can bet that the agent is semi-scamming both your and the potential hire. What do you know about any confidentiality clauses that are in effect between the agent and the potential hire? What does the potential new hire know about wage arrangements? I'd be skeptical. I'm not even supposed to know what my headhunter charges on top of my base rate, but do because we've worked together for several years with good mutual benefit.

If it seems sketchy, it probably is. Personally, unless the potential new hire is absolutely golden, I'd tell him/her to contact you directly without the benefit of the "agent". Not knowing standard business arrangements in Thailand (visited a plenty; never "officially" worked there, or wiith Thais directly), you might change the job description/title to avert any potential contractual violations that have been signed between the possible hire and the agent...

Just my 2 cents worth...

[jamiesilver]

I think its time employers stop being manipulated by government statements, Agencies and especially Thai employees. I cannot count the number of over paid under performing staff we see everyday. A Degree here means nothing.
If we are not careful before long Just like Bangkoks real Estate bubble - where i see condos selling for 25 million baht down on sukumvit, and for what? to live in a third world squallor of corruption where the quality of the building isnt worth 1/10th of that.
Be careful! stick to your guns - Pay what is the value of the transaction and not because of a false trend!

[mike324]

7% is not a lot of incentive to have a person quit their job to come and work for you.

Thing is how do you know he is not out of a job to begin with?

Yeah if you read the OP where it is mentioned "they are trying to make an offer" and also the mention of the "salary increase" by the agent.

Both suggest that the person is currently employed.

Anyone can find a job through a recruitment company and say I am still employed and I demand x amount of salary. Its true some may be employed, some may not be. Its a mind game people play to see how badly you need and willing to pay. You may be too gullible if you believe everything the agents say. You simply go by what you are willing to pay for this persons skills after an interview. Everyone wants a salary increase, but if the increase is not worth their skill level, you simply move on. Most of the interviewees that pass by my company, even when they are not employed have asked for higher salary than their previous ones as well, just human nature.

[ThailandLOS]

There is no such thing as a "standard increase". Never heard of, and if this would be the decisive incitement for the individual to change job I would back out immediately.

Money alone is never a good motivator for people to make a good job, career opportunities, corporate culture and good management is. If someone doesn't see you as an attractive enough employer without some made up 15-20% increase, then walk away.

If the responsibility increases substantially with the new job, then it's a different discussion. Of what value is it to you to pay 20% more if it's exactly the same work?

Either your recruitment agent has got it totally backwards or he/she is in fact lying to you. In either way it doesn't sound trustworthy. Test him/her by sitting in on the negotiation or handle it yourself is my advice.

[kingstonkid]

Sir Muttley

I assume that you have interviewed the person. I am sure that if he is going to leave his present employer you are going to guarantee more skills development and a better work environment everyone does.

I would think that a 7% increase just to move depending on the hours of work would be a good start.

However, I agree that there has to be more than just that.

Skills development can be done with any employer by taking courses.

I would offer him the position the 7% up front and a further 3-5% in a few months depending on how he grasps the other abilities you require him to pick up while working for you.

Spell it out in writing also guarantee employment as long as he meets certain written standards for at least one year.

[Time Traveller]

Reading through what has been posted, my guess is that the developer was happy in his job. The recruiter has no suitable candidates so approached someone who was not looking for a new job, then the only way to get them interested was for the recruiter to promise something more than you were willing to offer.

If I'm wrong, stick to the salary package you've already offered. If I'm right, fire the recruiter. Or you could just pay up and above for him. The recruiter will win by deception, and the developer will probably try to play that game with you again next year for another 15% or will leave and go work somewhere else.