Four in ten employers expecting wage increases for new hires cite need to entice skilled labor… A failure to negotiate a job offer means many workers are leaving money on the table. A new CareerBuilder survey finds that even though 45 percent of employers are willing – and expect – to negotiate salaries for initial job offers, almost half (49 percent) of workers accept the first offer given to them.
The nationwide survey—conducted online by Harris Interactive© on behalf of CareerBuilder from May 14 to June 5, 2013, among a representative sample of nearly 3,000 full-time, private sector U.S. workers and more than 2,000 hiring managers and human resource professionals—explored how both sides of the table approach salary negotiations and looked at compensation trends for the upcoming year.
Who is most likely to negotiate?
Age: The survey found that a new hire’s willingness to negotiate the first job offer usually comes with more experience. Fifty-five percent of workers 35 or older typically negotiate the first offer, which is significantly higher than workers age 18-34 (45 percent).
Gender: Men (54 percent) are more likely than women (49 percent) to negotiate first offers.
Industry: Professional & business services workers (56 percent) are the most likely to negotiate salary, followed by, information technology (55 percent), leisure and hospitality (55 percent) and sales workers (54 percent).
“Many employers expect a salary negotiation and build that into their initial offer. So when job seekers take the first number given to them they are oftentimes undervaluing their market worth,” said Rosemary Haefner, vice president of human resources at CareerBuilder. “Not every hiring manager will be able to raise the offer, but it’s never a bad idea to negotiate—especially if you have experience and possess in-demand, technical skills.”
What do employers offer if unable to meet salary demands?
If unable to meet the job candidate’s salary requirements, a majority of employers are willing to provide alternative benefits. Employers said they would offer the following:
- Flexible schedule: 33 percent
- More vacation time: 19 percent
- Telecommute at least once per week: 15 percent
- Pay for mobile device: 14 percent
Thirty-eight percent said they would not be able to provide anything.
When do employers talk about salary?
While 11 percent of employers include wage or salary information in their job listings, nearly one-in-four (24 percent) said they don’t reveal what the position pays until they extend the job offer. Nearly half (48 percent) will discuss salary during initial conversations or during the first job interview.
How are employers basing pay?
About one third of employers keep track of what competitors pay comparable employees via job postings (33 percent) or market average reports (34 percent), but many (35 percent) don’t factor in external compensation at all. Haefner notes that this can hurt employers competing for skilled labor.
“Forty-nine percent of hiring managers surveyed said job candidates have refused offers due to salary,” said Haefner. “It’s critical that recruiters and hiring managers are armed with up-to-date compensation data. If you offer premium talent below market rates, it can be very difficult to fill vacant positions.”
Salary Trends for 2013-2014
For current employees, 51 percent of employers expect salary increases of less than 5 percent in the next year while 16 percent expect increases of 5 percent or more. The survey also asked employers about expected average compensation increases for current workers and new hires.
Twenty-three percent of all employers expect no changes; nine percent are unsure.
Of those employers expecting an increase in salary, a majority (55 percent) said the increase is a standard cost of living adjustment. Other reasons include:
- Rewarding employee tenure – 28 percent
- Combatting voluntary employee turnover – 21 percent
- Smaller staffs are handling heavier workloads – 19 percent
- Competitors are offering more money – 18 percent
- Customer demand has increased – 16 percent
More than half (54 percent) of hiring managers and HR professionals reported that they are willing to negotiate salaries on initial job offers in the next year. For offers given to new hires, 34 percent of employers say the average change in compensation is expected to grow less than 5 percent in the next year, and 16 percent expect increases of 5 percent or more. Thirty-four percent anticipate no change, three percent expect decreases, and 14 percent are unsure.
Thirty-nine percent of employers expecting increases for new hires say the hikes are to entice skilled applicants to apply, and 25 percent say increases are coming because job offers were turned down due to low compensation.
For both new hires and current employees, information technology hiring managers were nearly twice as likely as the national average to provide salary increases of 5 percent or more. Sales hiring managers were also significantly more likely than other professions to see increases of 5 percent or more.
This survey was conducted online within the U.S. by Harris Interactive© on behalf of CareerBuilder among 2,076 hiring managers and human resource professionals and 2,999 U.S. workers (employed full-time, not self-employed, non-government) between May 14 and June 5, 2013 (percentages for some questions are based on a subset, based on their responses to certain questions). With pure probability samples of 2,076 and 2,999, one could say with a 95 percent probability that the overall results have a sampling error of +/- 2.15 and +/- 1.79 percentage points, respectively. Sampling error for data from sub-samples is higher and varies.