How to Apply Pricing Strategy to Job Ads

Friday, February 13, 2015

There's a common thread in my growing list of pricing teardowns. Companies love to talk about product features but they rarely explain how those features can benefit their customers. Should a consumer spend an extra 40% for modularized data entry screens? How about an extra $10,000 for multi-platform support? There may be very compelling reasons why he'd want to pay more for those features, but it's downright silly for firms to expect customers to connect the dots themselves. If a product can provide substantial benefit to a customer, the sales literature should make the benefit obvious.

What does this have to do with the job market? Job ads are too sanitized to be meaningful to those selling the products (labor). Employers are unwilling to describe internal failings and problems that they experience for fear of airing their dirty laundry (both internally and externally). As a result, they are forced to limit the content of their job advertisements to characteristics (features) of an ideal hire and not the benefits that they most desire.

Resumes are pointless
Image courtesy of Rkwriting

Back when I was a software engineer, I had one skill that no one could match. I could take failed software projects and turn them into successes. I could organize the code to make it readable, remove copious defects and speed up running time. Not only that, but I could perform these miracles under amazingly tight deadlines. The benefits that I brought to my employers were quite valuable, but do you think that any job ad would ever say "our software projects are a mess and we need someone to help fix them?" Of course not!

Instead, job ads are generic descriptions, including such phrases as "must have 5 years experience with Ruby on Rails." Such requirements cause problems for all parties involved:

The result is a job search that is more difficult, more expensive and less optimized for all parties. Fortunately, I have come up with a solution. All job ads should simply end with the following three questions (no more, no fewer):

If these questions are all that is asked, then companies will be incentivized to be honest about their needs and candidates will be able to describe their exact value with minimal guesswork required. No longer will candidates worry about issues of formatting and other frivolities. No longer will employers spend weeks tearing their own hair out.

The lessons of pricing can be applied to almost any field. If you'd like to read more about pricing in the field of software, take a look at my excellent book on the subject. If you'd like to talk more about value, then contact me for a consultation.