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Compensation is a bit of a mess right now.
A couple weeks ago I talked about how job seekers are being (understandably) choosy in what they respond to. And demanding to know a lot of details up front.
My hypothesis:
Runaway salary inflation of 2021/2022 + Increased pay transparency = Everyone has a better understanding of their worth.
Now, a few people people took issue about the salary inflation piece. How in their view, it’s a non factor. Because it didn’t actually keep up with real price inflation.
Here’s the rub: we’re both right. And that’s an even bigger problem.
In my (admittedly) recruiter centric world: “salary inflation” is a function of new salaries in job changes. With our own data, we saw 20-30% increases across a lot of common tech-centric skill sets. Which haven’t gone down (on a new hire basis).
By any measure, that greatly outpaced price inflation.
But this of course left out people who *didn’t* make a job change. And are stuck in the same salary bands.
The data there? A 4.6% increase compared to 6.4% inflation (source).
The old adage that you only make increases by making a move? Validated.
Anecdotally, I’ve talked to a few companies dealing with this right now. Orgs that typically hire junior and train up (giving increases along the way) are seeing new hires at that 5 year range WAY higher than what their current models allow.
The kicker: it’s not like companies are killing it right now and can boost their entire comp structure.
That’s the game for job seekers: finding out who actually has the cash to give them the increase their current employer can’t afford.
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Salary bands haven't kept up with inflation