I have had a number of people, both hiring managers and candidates wonder what influence (if any) this pandemic has had in regard to salary levels of both the people they want to hire and the employees they want to retain.
With the U.S. unemployment rate skyrocketing after the COVID shutdown of the economy in March and April, things looked pretty dead for a while and this shutdown had many people nervous about changing jobs in that environment. They wanted to stick where they were not only for safety and healthcare reasons, but they were also unsure about what coronavirus safety precautions were being taken by other companies and if they would be able to work from home or have to go into an office.
Fortunately or unfortunately, people laid off or furloughed were mainly lower-income or mid-management positions. Some companies had layoffs, but due to the PPP program and other fixes that the federal and state governments put in place, companies were incented to try to keep their people and avoid layoffs. They were also incented to keep salary levels unchanged. This has helped a lot of professionals keep their salaries and helped them feel somewhat secure through this crisis.
Here we are 8 months later, and things seem to be rebounding. Most companies have learned to live with COVID, and although the pandemic is not going away anytime soon, companies have learned to work around restrictions and keep their businesses going. Since most of the increase in unemployment rates have been lower-level employees, the unemployment rate for mid- and upper-level management positions remains low. In addition, there is still some concern on the part of these people to make a change to another company due to healthcare and other coronavirus reasons.
What is the impact of this on salaries? For those seeking to hire professionals and management-level people, they should expect to pay more to acquire the talent they need at this level. For people to give up the safety of a position with a company they know, the offer must be enticing enough to get them to move. We as recruiters are finding it difficult to find candidates for positions, and many of them will move only if the position looks like a good step up for them career-wise. Hiring managers should expect to pay a little more to hire professionals in this environment.
If you would like to discuss salaries and compensation with an expert in either the banking, food and beverage, IT, or automotive aftermarket industries, please give us a call and we would be happy to help!
–Mike Jamison; Co-President