Benefits August 30, 2006

Employers Willing to Pay More for Qualified Workers

August 30, 2006 (PLANSPONSOR.com) - Hiring managers are finding it more difficult to attract talented workers and workers are finding the job market more trying than it used to be, according to a recent survey.
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The survey by Robert Half International and CareerBuilder.com of more than a thousand hiring managers and 3,000 workers was designed to figure out which group held the most weight in the current job market.

Eighty-one percent of employers say that recruiting has become more difficult than it used to be and mostly blame the shortage of qualified workers. However, one in five hiring managers attributes the difficulty to not being able to offer competitive pay.

According to the Robert Half survey, managers are more willing to increase salaries to draw in talent, with 38% of employers saying they are ready to do this.

However, 85% of workers said the job market is equally or more challenging today than it was a year ago. Nearly one in five workers say they are less likely to ask for more money from a potential employer in the next 12 months and the number of those who were more likely to negotiate increased compensation dropped significantly compared to one year ago.

To attract new talent, two in five hiring managers said they will increase their starting salaries in the next year. The survey found that 36% of employers are willing increase compensation for staff level positions, but only 18% are willing to hike compensation for director, manager and team leader positions. Some13% say they will focus pay increases on the administrative and office support level.

Meanwhile, workers seem less inclined to negotiate more lucrative compensation packages. Twenty percent of professionals reported they were less willing to negotiate a more generous job offer today than 12 months ago. Thirty-two percent of workers said they are likely to negotiate more lucrative compensation 12 months from now, down from 47% in 2005.

Other findings of the survey include:

  • 26% of employees stated they are currently looking for a new job.
  • 21% of hiring managers reported their employee turnover rate is higher than it was 12 months ago.
  • 21% of managers expect turnover to be even higher 12 months from now.
  • 30% of hiring managers reported their firms have instituted new policies and programs to increase staff retention rates in the last 12 months, up from 23% this time last year.

The most common retention efforts by employers include pay raises, increased bonuses, better benefits and more flexible schedules. The survey found the job benefits workers value most are health insurance, flexible work schedules and 401(k) plans.

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