After years of significant salary increases, the compensation for new employees has begun to shrink, prompting workers to reconsider the financial benefits of switching to a new job.
In recent years, as companies competed to recruit workers to fill the labor shortages caused by the COVID-19 pandemic, salaries, especially for those who changed jobs, saw notable increases. However, as the job market cools, companies have become more cautious in hiring, resulting in lower compensation for many new employees than a few months ago.
According to ZipRecruiter, the average salary for most of the 20,000+ job positions listed has declined compared to last year. The sectors with the largest decreases are technology, transportation, and others, which all experienced a recruitment frenzy in 2021 and early 2022. This reduction signals a significant shift, indicating a considerable improvement in the job market tension post-COVID-19 pandemic.
Moreover, a July survey by ZipRecruiter of about 2,000 employers revealed that nearly half of the employers said they offered lower wages in their recent job vacancies. Chanteal Brayboy, who has been searching for work in user experience design since last summer, mentioned that the salary posted for positions she was interested in was about $10,000 less than a year ago.
As consumer price increases slow down, June's wage growth outpaced the inflation rate for the first time in two years. However, data from the Labor Department shows that wage growth peaked last summer.
Julia Pollak, the chief economist at ZipRecruiter, stated that since new hires account for less than 4% of all employed persons each month, it might take some time for their salary adjustments to be reflected in federal data. In addition, the recent massive layoffs by many large companies, especially in the tech sector, have suppressed wages for new employees to some extent.
During the pandemic, a pizza restaurant in Unionville, Tennessee, raised its hourly wage to $13 to attract new employees. However, an employee, Valerie Breshears, discovered her hourly wage had been reduced to $11.
Recently, Appliance Factory hired administrative staff at $18 per hour. The company's CEO, Chuck Ewing, said that last year the hourly wage was $20, but now, as more job seekers emerge, many businesses are lowering their salary offerings.
Data from Gusto, serving over 300,000 small and medium-sized businesses, shows that this year's salaries for new employees are 5% lower than for new hires in the same roles last year. While professional services positions were hit hardest, with salaries for engineers and developers declining by 18% over the past year, other industries were also impacted. However, the data indicates that wages in the tourism and construction sectors continued to rise.
Laurie Chamberlin, head of LHH North America, noted that the worker supply chain was "severely disrupted" during the pandemic, with many businesses willing to incur higher costs to snatch talent in order to meet the demand for goods or services as pandemic restrictions eased. However, as demand for goods or services returns to normal and economic outlook uncertainties rise, both the number of hires and salary offerings have cooled.
At the end of 2021, Jennifer O'Halloran was seeking jobs with a salary offering of $95,000 per year, plus a $5,000 signing bonus. Now, similar positions to her current job offer salaries ranging from $85,000 to $90,000, with no signing bonus.
Meg Reilly, president of National Mortgage Staffing, mentioned that with the slowdown in the real estate industry, many positions saw a decrease in salary. Salary reductions for mortgage settlement agents and underwriters are as high as 30%. Although many job seekers are prepared for reduced salaries, the extent of salary cuts in some industries may exceed their expectations.
