Dive Brief:
- Talent may be in high demand, but those graduating college in the next few weeks won't see much of a bump in wages over last year's graduates, a study from Korn Ferry shows. The report shows wages will increase, on average, to a little over $50,000, up only 2.9% from 2017.
- The company analyzed entry-level wages from around 1,000 businesses in the U.S., including more than 300,000 jobs. In some industries, like STEM, wages will be higher, the report suggests.
- The findings reflect what's happening in the broader market: Total compensation climbed 2.7% over a 12-month period which, according to Bloomberg, represents the largest increase in ten years.
Dive Insight:
Despite a demand for talent, wages haven't jumped significantly — a phenomenon that has some economists confused. Some say employers aren't confident enough in the economy to boost wages a meaningful amount, instead relying on one-time bonuses, flexible work arrangements and other less expensive benefits to attract talent.
Another recent report also shows that employers tend to low-ball candidates for entry-level positions. CareerBuilder found that employers often offer about $5,000 less than they'd be willing to pay these workers, expecting them to negotiate. The majority of workers (56%) surveyed, however, said they don't negotiate.
There's a pay transparency movement afoot, however, which some hope will give workers the leverage to push for better pay. A Robert Half report shows companies are starting the salary discussion earlier in the hiring process, potentially in response to state and local salary history question bans, and in an effort to speed time to hire. And major players in the recruiting industry, like LinkedIn, are promising to display salary estimates next to job postings. The movement also hopes to close wage gaps based on race and gender, a problem from which even new grads aren't immune.
In response, experts say employers may need to discuss salary during phone screens, rely more on market data and develop more structured compensation strategies.