When it comes to employee compensation and pay practices, a new survey finds that potential candidates aren’t negotiating salaries, and this is leaving a lot of money left on the table for future earnings. According to online employment marketplace ZipRecruiter®, the majority of jobseekers are not negotiating for more salary when starting a new job.
The survey, which features responses from 50,000 jobseekers, also finds that 64% of respondents said when they were last hired, they accepted the first salary offer they received. Furthermore, younger workers were particularly reluctant to make a counteroffer with 84% of 18- to 34-year-olds accepting the first salary offered.
A recent study of newly-hired employees in various industries found that those who chose to negotiate salaries increased their starting pay by an average of $5,000. Assuming a 5% pay increase each year over a 45-year career, negotiating a starting salary of $45,000 rather than $40,000 will translate into additional lifetime earnings of over $750K.
National data show that workers are increasingly quitting their jobs, which is supported by the high number of ZipRecruiter survey respondents who reported being dissatisfied with their compensation and benefits packages. Employers seem to be under-appreciating the impact of raising wages as a retention device.
The ZipRecruiter survey finds:
- When asked directly about which form of compensation matters most to them, survey participants most frequently said topline pay.
- 50% of survey participants who are actively trying to switch jobs said they would stay in their current jobs for higher pay.
When broken down by gender, the data reveals that only 31% of women negotiated for higher pay the last time they were hired, compared with 40% of men. And only 39% of women turned down job offers in the past, compared with 47% of men.
ZipRecruiter’s survey also finds racial pay disparities still exist. With 45% of African American respondents claiming they were the least likely to have received a pay increase at their current or most recent job. While only 41% of Asian Americans and 40% of Hispanic Americans claim that they have not received a pay increase, compared to just 38% of Caucasians.
Let’s face it, we can’t please everyone, but that doesn’t mean you will lose out on top talent if you can’t provide candidates with the salary they seek. According to Paula Santonocito, you must be prepared for a salary negotiation, regardless.
Santonocito says to “know the salary range for the position—not only the ‘official’ range, but the absolute top end the company will pay for an ideal candidate. After you make an offer, ideally less than that number, review the entire compensation package.”
When reviewing overall compensation, make sure you include:
- Paid time off, including vacation days, personal days, and paid holidays
- Matching contributions to 401(k) or other retirement plans
- Tuition reimbursement or paid training programs
- Student loan assistance
- Annual bonuses and/or sign-on bonuses, when applicable
- Stock options, when applicable
- Health insurance and dental insurance
- Life insurance and disability insurance
- Paid parking or commuter assistance
In addition, don’t forget to mention other benefits that have a less obvious dollar value, but may still make an impact, such as:
- Telecommuting opportunity, even if part-time
- Half days on Fridays during the summer
- Free snacks
By highlighting what your overall compensation package entails, you may be able to win the candidate over with more tangible benefits, rather than just a dollar amount.