NEW YORK–Credit unions on the frontlines of the so-called “war for talent” may get some relief, along with other employers, as one new analysis suggests it’s costing less to hire and retain people.
As the Wall Street Journal noted, pay for new hires is “starting to shrivel after years of hefty salary bumps, requiring workers to reset what financial gains to expect from switching to a new job…As the job market cools and businesses become more cautious in their hiring, many companies are paying new recruits less than they did just months ago—in some cases, much less.”
The Journal noted that among the postings for more than 20,000 job titles on ZipRecruiter’s site this year, the average pay for a majority of roles has declined from last year.
After a frenzied couple of years of hiring, the Journal report featured several job candidates who have found responses to be far fewer and compensation packages that were lower.
Wage Growth Has Peaked
The Journal further cited a ZipRecruiter survey in July of about 2,000 employers that found nearly half said they had reduced pay for recent job openings.
“Overall wage growth continues and it surpassed inflation in June for the first time in two years as consumer price increases slowed,” the report continued. “Still, wage growth peaked last summer and has since declined to 5.7%, according to Labor Department figures.”
Julia Pollak, chief economist at ZipRecruiter, told the Journal that because new hires account for less than 4% of all employed workers each month it can take a while for adjustments in their pay to show up in the federal data. The mass layoffs many large companies have conducted lately, particularly in tech, have helped push salaries for new hires downward, Pollak told the Journal.
Lower Starting Pay
The Journal further cited data from Gusto, a payroll and benefits software company serving more than 300,000 small and midsize businesses, shows that pay rates for new hires are 5% lower than they were for new recruits for the same roles at this time last year.
“While professional-service roles have been most affected—pay rates for engineers and developers, for example, have dropped 18% in the past year—workers in other industries have also been hit,” the Journal reported.
One Note of Caution
While employers have more leverage now on pay, they should tread carefully, Marc Goldberg, CEO of Stages Collective, which specializes in recruiting for the ad tech industry, told the Wall Street Journal.
“I advise my clients not to go down too far, because you’ll have a temporary employee,” he told the publication, adding that to control costs without alienating applicants, companies are doing things like increasing performance incentives while reducing base salaries for certain roles, such as sales.
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