What’s a competitive wage?

what's a competitive wage

With so many factors influencing hiring these days, it can be hard to tell if the pay you’re offering is helping or hurting your attraction and retention efforts. Did that candidate ghost you after the interview because they were exceptional and found higher pay somewhere else? Or do the skills you’re hiring for truly require a better wage?  

CareerBuilder recently partnered with the Harris Poll to survey thousands of workers and hiring managers, and we found out quite a bit when it comes to compensation: Among candidates who have ghosted a new employer, two thirds say it is because they found a job with higher pay or better benefits.  

Pay is such a strong factor, more than one third of current workers expect more than a 5% salary increase each year, and twice as many look for this when switching jobs. (And a LOT of workers are switching jobs.)  

With candidates hard to come by, employers seem to be responding to some demands: among hiring managers who have minimum-wage workers, 56% plan to pay them $15 or more per hour, with two thirds of employers with companies larger than 5,000 reporting this. Just because $15 is starting to become the minimum-wage norm doesn’t mean it will be enough to get workers in the door. Here’s how to know you’re pricing right. 

Be upfront with candidates. 

We see it all the time in job postings: “competitive wages.” But what, exactly, does that mean? Job seekers have no way of knowing if you mean $15 an hour or $25. We strongly encourage including specific pay ranges on all job postings — 74% of job seekers say it positively affects their decision to apply. Being upfront about compensation also gets your posting in more search results, ultimately reducing time to fill.  

Consider cost of living. 

Our survey found that 39% of workers have to rely on gig work (side jobs) to make ends meet: 50% of those workers are in traditionally “blue collar” jobs, while the other half are not — indicating that employees across industries work side jobs to pay the bills. And if workers are relying on overtime hours, that can affect how they perform on the job at your company. If your employees are packing their time with side hustles, they’ll have less time to recharge and could face burnout – upping the risk of error or turnover in your workplace. 

Consider the cost of living in the areas where you’re hiring. If you’re trying to attract remote workers who may live in pricier markets, we like this city comparison calculator. This nifty living wage calculator allows you to search by county and then compares wages needed for different family structures (one adult and two kids, for example). With so much uncertainty remaining around school schedules, many parents are stretched thin and have had to opt out of the workforce entirely, leaving paycheck responsibility to another parent or family member. Also consider what workers can and can’t afford with today’s wages. This is all to say, these larger-than-the-workplace societal issues affect a large portion of the workforce, and employers need to accommodate in order to stay competitive.  

Let the market guide you. 

Labor market data can give you a snapshot of the position you're hiring for and just how strong of an upper hand candidates have. The CareerBuilder Supply and Demand portal, for example, uses 150-million data points from thousands of clients to show in real time how easy or hard it will be to attract workers. If you’re in a particularly hard-to-hire industry or location, the tool can show you how much you need to increase pay to edge out competition. We’ve talked to several employers who were offering generous sign-on bonuses and $15-an-hour minimum wage, but it still wasn’t enough to attract applicants — until they looked at the numbers and adjusted compensation. 

Remember also that these days, with workers flexing their transferable skills and switching industries, you’re not just competing with other employers in your industry or area, but with nearly everyone. A fail-proof compensation strategy includes utilizing data to take out the guessing, advertising wages in your posting – and above all else being flexible in a changing market. 

For more insights, read the full report. 

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