If you think you’re underpaid, you’re probably right.
If the amount on your paycheck hasn’t budged in years, this should come as no surprise: Companies have been able to hold down wages for the past several years because the economy was crummy and people were happy to have a job, any job.
It’s taken a long time, but that’s starting to change. Although it’s possible your company doesn’t realize it yet, they're going to figure it out when their talent starts heading for the door. New research shows that American workers are increasingly willing to leave employers that don’t pay enough — and that means the most tight-fisted companies stand to lose their best workers.
In consulting company ManpowerGroup’s most recent Talent Shortage Survey, roughly one in 10 U.S. employers said they were raising starting salaries in response to not being able to find the right workers for their open positions. That’s good news, but a recent CareerBuilder.com survey shows we still have a long way to go. In a recent study, it finds that 35% of employers feel they can pay employees less because there are still more workers than jobs.
But companies unwilling to pay up for good workers are finding that going for the bottom dollar on labor can carry hidden costs. “If you’re paying below what the market dictates for skilled labor, there are implications for employee performance and retention,” says CareerBuilder CEO Matt Ferguson.
“The job market, while competitive, is improving,” Ferguson says. Workers are feeling better about their job prospects.” As a result, he says, “There’s a disconnect happening between what job seekers may expect and what employers are willing or able to provide.”
New research from jobs and salary site Glassdoor.com finds in a new survey that roughly two in five American workers think their pay is unfair. “That’s a big number if you’re trying to attract, retain and motivate employees,” says Glassdoor’s career and workplace expert, Rusty Rueff.
“We still have the hangover from the Great Recession that says, 'I’m doing the work of two,'” Rueff says. Productivity has risen, and now workers want that what they earn to reflect that a little better.Plus, regular workers are watching CEOs collect huge salary and bonus packages and feeling like they’re entitled to a bigger share of the pie.
And if they don’t get it, they’ll walk — which can be expensive for employers. Glassdoor finds that 62% of survey respondents would consider looking for a new job if they didn't get a raise in their first year on the job.
CareerBuilder’s survey finds that it costs a company, on average, more than $14,000 for every job position that goes unfilled for three months or more. When the good workers leave, the ones that stay are less skilled and less motivated. Companies surveyed by CareerBuilder that can’t fill positions say they’re experiencing work delays, declines in customer service, lower work quality, higher turnover and lost revenue.
One recent New York Federal Reserve survey finds that New York-area employers rank basics like punctuality and reliability as some of the toughest qualities to find in a worker.
“I think that's the typical employer complaint when they're unwilling to pay decent wages,” says Eileen Appelbaum, senior economist at the Center for Economic and Policy Research. "If you want to get better qualified, trained workers... who have a good work history, you have to pay for that.”