Low starting salaries = demotivated staff?
Are lower starting salaries leading to demotivated staff?
You may have heard that lower starting salaries are evident in the job market at the moment. On LinkedIn this week, I spotted a post that frustrated me to say the least. A recruiter was speaking about his candidate who had gone to an interview and was offered the job, but at 25% less than their current salary and what was being advertised for the role. Speaking to the client, the recruiter found out it was purely down to the fact the employer thought they could ‘get away with it’. Long story short, the candidate was offered a role with a different company at a higher salary. The other client came back to match it, but the candidate still took the other role, some might say for obvious reasons.
As in our job market report for July, starting pay is still reportedly falling markedly due to a rise of staff supply, budget cuts, and a still subdued demand for workers.
But it’s not just employers driving down the salaries. With candidates being made redundant, re-evaluating their lifestyles and the need to be flexible to get back into work, many are taking pay cuts to get back into a role as there is a fair amount of competition.
But how far is too far?
Going back to the story on LinkedIn, the candidate was in a position where they needed to consider that offer. But would it have worked for them long term? Would they have stayed in the role or even the company?
The company had the capacity to offer the candidate the higher salary as was shown by the subsequent counter offer, but they tried to ‘work the system’. It creates a negative start to the relationship. Firstly, offering a candidate a lower salary than what they are currently earning or have earnt in the past, devalues their experience. In the LinkedIn post situation, it also leaves the impression that the candidate it just ‘another number, another salary to pay’. It takes the personal out of it. Their motivation could be affected. Yes, it could motivate the candidate to prove themselves to get the pay rise, or it could have the opposite effect. They might not work as hard as they’re not being paid as much.
And think about the longevity. The candidate might be willing to take the drop, alter their lifestyle for the short term while the market is bad, but will they continue to take the hit? Things are already improving, albeit slowly, and opportunities are coming back. The candidate will likely still be keeping an eye on the market to get back to where they were.
It’s also about mutual respect. If you offer a lower salary, it implies you don’t respect their experience or value it at what you should. Why should they respect you and your company if you don’t respect them?
What if you need to offer less?
But what if you can’t afford to match their salary and you need to offer lower starting salaries? Or what if they’ve specifically told you they will take a pay cut for the role? Open and honest communication is key here. Don’t be afraid to ask in the interview, what salary they were previously on, and what they are expecting for this role. Then advise the candidate on where you stand. If you can’t hit the mark on the salary for the offer, discuss this with them at interview stage so when it comes to an offer, it’s not a shock. Are there any other benefits or career progression which can make the role more appealing?
Get them engaged in your company, make them feel like they’re not just a number. You want to build that trust and respect from the outset so you have a loyal and dedicated employee.
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