Salaries are on the rise across the country, and the workforce knows it. Indeed, the U.S. Department of Labor recently recorded a Q3 2018 wage increase of 3.3 percent. In response, employers must develop hiring strategies in order to address higher pay and attract top talent when budgets are capped.
According to the 2018 Randstad Employer Brand Research, compensation and benefits are the primary reasons employees choose to stay with their employers. What's more, Randstad’s research found that money remains the top motivator for accepting or remaining in a job across industries and talent pools. With wage stagnation finally easing, employees can and will keep the topic of pay on the table, so companies must take note and be prepared.
For example, online retail giant Amazon recently announced an unprecedented, across-the-board minimum wage increase to $15 per hour. As one of the nation’s largest private employers, Amazon not only made headlines but upped the ante for attracting talent. In another high-profile example, Walt Disney Co. will be issuing larger paychecks to some 10,000 theme park employees after union negotiations resulted in a minimum wage bump, also to $15 per hour.
These and other examples demonstrate that wage pressure is real — and that meeting and exceeding salary expectations is a necessity for any company seeking to attract top candidates.
While salary is cited as the top reason for taking or staying in a job, employees can be persuaded in other ways, too. For example, many millennials are saddled with significant student debt, which is why some creative companies are recognizing the importance of financial security by offering financial assistance to help alleviate student debt.
That kind of support will pay dividends when it comes to talent attraction and retention strategies. After all, according to the Pew Research Center, millennials now make up the largest percentage of the U.S. workforce — a percentage that will only increase as older generations begin to retire.
While it’s true that compensation must be addressed to solve challenges related to employee acquisition, inevitably there are limits to what companies can do. This means that HR teams and hiring managers must get creative to fill open positions within budget constraints in order to compete in today’s tight labor market.
Rather than ending a potential hire over a salary standoff, successful companies are seeking to uncover other factors that will entice candidates to come on board. Knowing common motivators for different generations of employees is a great starting place, and these topics can easily be brought into the negotiating room.
For example, more seasoned workers might be persuaded to accept a new role if they can work less than full time for the same pay, or if they can begin their role without having to wait to accrue vacation time. Meanwhile, mid-career professionals with growing families may respond well to more flexible start/stop times or work-at-home options. And incoming workers with lower starting salaries might respond to commuter assistance, immediate healthcare benefits, tuition reimbursement or other financial levers that make a bottom-line impact.
When open positions are remaining vacant for too long, managers must shift their expectations — and hire for potential, rather than perfect fit.
It’s not uncommon for hiring managers to draft job descriptions with long lists of skills and experience requirements that reflect the “perfect” person for the job. In most cases, however, not every skill or level of experience is essential for the role, so it’s useful to distinguish between must-have and nice-to-have criteria.
After all, screening applicants against the entirety of prerequisites usually eliminates candidates who fit many, but not all, of the requirements. These candidates can often turn out to be the best hires, provided they are given the training and support they need to succeed.
In a tight labor market, managers can effectively bolster their teams by hiring for soft skills and training for hard skills. And ongoing training is going to be ever-more important going forward, as workers today increasingly expect to continuously learn on the job.
If your organization is considering a wage increase to remain competitive, Randstad's talent experts can help determine how the decision will impact your short- and long-term productivity, operational efficiency and financial health. With our deep-seated industry expertise, we can help you benchmark and strategically increase pay in order to see maximum benefits.
We’re here to help. Check out our 2019 predictions white paper to learn more about the trends impacting the workforce in 2019 — and beyond.
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