Posted by Paul McDonald on Friday, February 6, 2015 - 07:47 | Follow me
The January jobs report from the Bureau of Labor Statistics (BLS) shows that the hiring environment remains strong. For employers, that means the competition for skilled professionals continues to be tight. Here’s why you need to examine your compensation levels to land top talent.
The just-released January jobs report from the BLS was very strong and easily beat analysts’ expectations. Employers added 257,000 jobs in the first month of 2015. This marks the 11th straight month that the economy has generated more than 200,000 jobs and the 52nd consecutive month of employment gains.
The overall unemployment rate is now 5.7 percent (up slightly from 5.6 percent last month because more people have joined the labor force). The unemployment rate for college-educated workers 25 and older is much lower at just 2.8 percent (down from 2.9 percent in December).
In addition, the excellent November and December jobs reports were even better than initially thought. With significant upward revisions, job gains for the last two months of 2014 were 147,000 higher than previously reported.
There’s no question the hiring environment remains strong. But what about wages? The January jobs reports shows that wages rose 2.2 percent from a year ago, and, in December, they saw the biggest gains since September 2008. That’s good news given the concern that wage growth, in general, hasn’t kept pace with job gains.
I can assure you, though, that salaries have been on the rise for professionals with in-demand skills for a while. Our research shows that starting pay for professional-level positions will rise an average of 3.8 percent in 2015. Robert Half recruiters across the country are seeing even bigger gains — up to and, in some cases, exceeding 10 percent — for certain positions, especially those in hot specialties like IT, accounting and finance.
The bottom line is that if you expect to compete for the best candidates, you need to offer attractive pay. Here are tips to keep top of mind when hiring and negotiating salaries with job seekers:
Scrutinize your salaries
When a position opens up at your company, conduct research to make sure the pay range you’re prepared to offer is above (or at least in line with) market standards for that job in your industry and area of the country. Your opening will attract little interest — especially from the experienced workers you’re most interested in hiring — if candidates feel they could make significantly more working elsewhere.
Be prepared to talk money early on
It’s become more common for job seekers to ask compensation-related questions during the first or second interview. So before meeting with a potential hire, you need a clear idea of the salary range.
You also want to have a sense of how flexible you can be. If a strong candidate is looking for a higher salary than you had in mind, how much can you increase it without disrupting your existing pay structure?
Don’t hesitate to ask the candidate yourself: “What are your salary expectations?” Having this conversation early on will tell you if you and the job seeker are in the same ballpark or so far off that it’s pointless to continue with the recruitment process.
Expect to negotiate
The leverage has shifted. Unlike several years ago when most job seekers were happy to simply receive a job offer, candidates today know they are in the driver’s seat. Many are comfortable pushing for higher compensation.
Employers are starting to adjust to the changing dynamic. Forty-one percent of CFOs we polled said they are more open to negotiating starting pay than they were 12 months ago. Join their ranks and realize you may need to engage in some back-and-forth to land a strong hire.
If you’re working with tight budget constraints, think about what perks and benefits you could offer to help sweeten the deal.
Revisit your salaries on a regular basis. Consider that your hiring budget might have been approved in September or October of last year. Those figures could already be outdated just a few months later, particularly for the most in-demand positions. Make sure you always reference the most current compensation data available when starting the hiring process.
The January jobs report shows that hiring is still in full swing, and employers will continue to have a hard time finding the people they need to grow their business. If you’re having difficulty staffing a certain position, start with the salary range. Your troubles could very well be because of compensation.
- 5 Mistakes to Sidestep During a Salary Negotiation With a Candidate (Robert Half blog)
- Jobs With the Best Salary Potential (U.S. News & World Report)