One of the clearest signs we are in a jobseekers’ labor market is the increase in wages companies are offering to entry-level employees. Exhibit A is a wave of increases in minimum wage set to take effect in 2024. Through a series of new laws, 22 states are raising their minimum wages on January 1. But that’s not the whole story.
With the increase in salaries comes an increased expectation on the part of young workers setting out on their first post-graduate job searches. The New York Federal Reserve reports that the lowest annual salary that Americans seeking a new job will accept is $78,645. This is up from $72,873 in 2022. And if you go back to July 2019 – just months before the pandemic – the lowest salary survey respondents would accept was $62,194. That means salary expectations have risen more than 26% in just four years.
What’s Behind the Spike?
Gen Z Wants What Their Parents Had
When many new jobseekers look back to their childhoods, a full-time job was seemingly all one needed to achieve their goals. “At Gen Z’s age, older people worked 40 hours a week, and made enough money to buy a house and have barbecues on the weekend,” said educator and researcher Corey Seemiller. “Gen Z works 50 hours a week at their jobs, and another 20 hours a week side hustling, yet still make barely enough to cover rent.”
From Fond Distant Memories to Recent Economic Concerns
While Gen Zers higher salary demands relate to their younger observations, they also are a result of memories of when they entered the job market just a few years ago. Between the fear of the COVID pandemic to an economy burdened by inflation, they were – and still are – concerned with making ends meet. “Such experiences have shaped their values, and that fear of not having enough runs deep,” said Seemiller.
Higher Income Indicates Higher Value
Finally, the desire for a higher salary also relates to the unfortunate association young workers have between income and self-worth. They want to know their employers value and appreciate the work they do, and despite self-care experts’ efforts, these jobseekers feel like the only valid recognition they can get is a big paycheck.
How Can You Respond?
If your business has no problem expanding salaries to meet candidate demands, congratulations. For many companies, however, increasing salaries across the board just isn’t a viable option. So what else can you do to add value to the positions you offer? Here are a few quick ideas.
- A signing bonus – You may be able to sweeten the compensation deal you offer employees by offering a special one-and-done signing bonus.
- Maxing out the flexibility – Offer something you can’t put a price tag on: the flexibility and work-life balance provided by alternate work arrangements.
- Promote growth opportunities – Make sure candidates know that their starting salary can grow with the many training and development opportunities you offer.
Call Mega Force for Staffing Help
Regardless of how you choose to deal with higher salary demands, Mega Force can help you acquire the talent your business needs to succeed. We work with employers throughout the Carolinas and Virginia to provide quality applicants. Contact us to request an employee.