Coronavirus (COVID-19), Recruiting

Are You Ready to Negotiate Salary During the Pandemic?

Trying to predict when things will return to normal is nearly impossible given the uncertainty caused by the coronavirus pandemic, yet employers in a new ManpowerGroup Employment Outlook Survey are throwing caution to the wind and revealing when they believe they’ll be back to pre-pandemic hiring levels. 

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Employers in the United States report improved hiring plans for the fourth quarter of 2020 following the 10-year low reported in the third quarter, but now plans are changing for when pre-pandemic hiring will resume. According to the Outlook, businesses now anticipate slower hiring levels than initially expected.

In April, 60% of businesses expected hiring levels to return by January 2021, but now that is down to just 25%. For 11% of businesses, they expect hiring to return by July 2021, 5% expect longer, and 21% remain uncertain.

The Pandemic Will Continue to Transform Where We Work

The Outlook also reports that the impact of the pandemic is transforming the way U.S. employers plan to get work done for the long term.

ManpowerGroup reports that 34% plan to offer remote work and flexible hours in the post-pandemic workplace, with 8% planning to offer 100% remote work to employees. Additionally, 20% of businesses plan to offer more opportunities for employees to develop new skills as the crisis accelerates demand for increasingly specific skills.

“Though we still have a long way to go to recover from what started as a health crisis and has evolved to a social and economic crisis, it is encouraging to see optimistic outlooks in some of the industries most heavily impacted including leisure, retail and manufacturing,” says Becky Frankiewicz, President of ManpowerGroup North America, in a press release. “We also see employers recognize this recovery will take longer than they initially thought and many are adapting work models for the long term.”

“This is accelerating a shift closer to what we know workers have wanted for some time; autonomy to choose how and where they get their work done, more learning on demand, and a focus on achieving a better blend of work and home,” Frankiewicz adds. “Now is the time for employers to offer targeted skills development and more flexible future-focused work options for those working remote and in the workplace.”

Outlooks by Industry and Region

The most positive outlooks for the 3 months ahead are reported in leisure and hospitality (+22%), transportation and utilities (+19%), and wholesale and retail trade (+18%) as lockdowns lift, consumer spending is buoyed by employment benefits, and people across the country leave their homes to begin to socialize and shop. Employers in manufacturing report an outlook of +7%, a 7-percentage-point improvement, as supply chain bottlenecks ease and workplaces open up, though it’s still 10 percentage points below pre-pandemic levels.

Hiring prospects strengthen considerably in all four U.S. regions when compared with the previous quarter, with outlooks increasing by 11 percentage points in the Midwest, the Northeast, the South, and the West.

When the four regions are compared, the strongest hiring pace is anticipated in the Midwest, where the outlook is +16%. Northeast employers expect steady workforce gains, reporting an outlook of +15%, and positive hiring activity is anticipated in the South and the West, with outlooks standing at +14% and +13%, respectively.

Compensation Trends During the Pandemic

Similar to ManpowerGroup’s latest employment outlook, new research from Robert Half also shows employer sentiment toward hiring right now, and the outlook is not good. A large majority of senior managers surveyed (88%) said they are worried about their company’s ability to retain valued staff, with 47% being very worried. Of those who said they are worried, 39% attribute their concern to salary reductions or planned salary freezes for the near future.

Among the 28 U.S. cities in the survey, Minneapolis (52%), Tampa (50%), and Portland (49%) have the highest percentages of senior managers who said they are concerned about retention because salaries have been slashed or raises are off the table for the time being.

“Employees have been stretched to the limit during the pandemic, putting in longer hours and taking on additional responsibilities,” says Paul McDonald, senior executive director of Robert Half. “While many companies have supported staff by providing more nonmonetary benefits, like flexible scheduling and enhanced wellness resources, they may have had to impose pay freezes or cuts in order to preserve jobs.”

New Hire Pay on Par with Pre-Pandemic Levels

Even in a time of high unemployment, Robert Half’s research shows a majority of companies are offering new recruits pay that meets or exceeds pre-pandemic numbers. More than 4 in 10 senior managers surveyed (44%) said starting salaries for new hires have held steady since the spread of COVID-19 began, and nearly 3 in 10 respondents (28%) noted an increase in base compensation.

“Companies struggle to find the talent they need to support new business priorities sparked by the pandemic. Professionals with in-demand skills know they still have options, and employers realize they need to offer competitive salaries to attract and secure top candidates,” McDonald says.

Some Employers Inclined to Negotiate But Not in 2019

More than 8 in 10 senior managers (86%) noted they are as likely to negotiate salary with new hires today as a year ago. Of those, 36% said they are more open to discussing starting pay with candidates now compared with 12 months ago.

Austin (51%), Raleigh (48%), and Charlotte (45%) have the highest percentages of employers that are more willing to discuss pay with potential hires than they were a year ago. In addition, managers at midsize companies (500 to 999 employees) are more likely to negotiate salary today versus 12 months ago (44%), while those at small firms (20 to 99 employees) are the least likely to engage in a back-and-forth about compensation (28%).

“Professionals are savvier about salary trends than ever before, and many candidates are comfortable talking about pay early in the interview process,” McDonald adds. “Employers should research compensation trends regularly and be prepared to move quickly and negotiate as soon as they come across promising talent.”