A 'competitive' salary now includes benefits, perks
- A "competitive" salary is no longer just about pay; it also includes the benefits and perks needed to attract talent in a tight labor market, according to Randstad USA's 2019 Salary Guide.
- The report showed that salaries nationwide rose by 3% across key industries, but haven't kept pace with inflation. Still, this could be a major factor contributing to the increase in people quitting their jobs in search of higher-paying ones, Randstad said in a statement announcing the report. BLS figures show that 839,000 people voluntary quit their jobs in December 2018, up from 113,000 in December 2017.
- "Simply put, the data we're seeing around the tighter labor economy means the definition of a ‘competitive' salary has changed," Jim Link, chief HR officer of Randstad North America, said in the statement. "It's no longer enough for organizations to pay on par with other companies. Being competitive now means employers must offer salaries and benefits that differentiate themselves in a very tight labor market."
The tight labor market, with record-low unemployment and talent shortages, has not only changed organizations' recruiting strategies; it also has changed the definition of what it means to be competitive. To gain a competitive edge in the talent war, employers must offer benefits and perks that job seekers value such as flexible work, career development opportunities and paid family leave. Traditional ways of attracting talent — and managing it — no longer suffice.
Despite the report's findings, months of stagnating wages could complicate organizations' recruiting efforts. Money remains the top motivator for accepting a job offer, meaning employers must be ready to make pay negotiations central to the recruiting process.
Wage stagnation may be due in part to the rise of the contingent workforce. More talent managers approach hiring with a "total talent acquisition" mindset — a comprehensive approach to recruiting that often includes contingent workers. As the contingent workforce grows, more employers are addressing talent needs with 1099 workers that do not require benefits and tend to cost less than employees.