Rising inflation in 2022 has touched every part of the world economy, including the recruitment industry. Its effects in recruitment are primarily felt in compensation packages.  Once companies could keep compensation packages lower and still retain high candidate interest. Now the current state of affairs has changed that.

What is the root cause of higher compensation packages? 

The current state of the world

The COVID-19 pandemic changed the course of supply chains around the world. Lockdowns in China and hits to the supply chain have led to a sharp increase in inflation prices. In addition, Russia’s ongoing war with Ukraine has doubly taken a stab at the global supply chains. Simply put, candidates need a wage that fits their cost of living if they’re going to live with inflated prices. However, it’s not only inflated prices that have increased expectations for higher compensation packages. The candidate’s attitude toward their merit has improved as well.

Workers value themselves more.

COVID-19 and work-from-home orders changed the course of how employees see their worth. A pre-pandemic candidate would want a 5% – 10% increase in compensation to agree to a new offer. Now they are looking for a 20% – 25% increase in salary. 

The Great Resignation is an ongoing movement that has seen over 4 million Americans quit their jobs in 2021. What are they looking for? Higher wages, better working conditions, and flexible work-from-home options. This movement has put power back into workers’ hands as half of all organizations have seen an increase in attrition rates in the middle of the pandemic. 

The key takeaway here is if you want to attract high-quality candidates, you need to consider a salary to keep up with inflation and the Great Resignation in 2022. Young and innovative candidates whose wages have not kept up with inflation have seen that switching jobs can give them a higher salary. Keeping your compensation packages low will not help you attract superior professionals and risk having competitors scoop up the talent you want.

What about benefits? 

Benefits like dental, pharma and real-estate perks are crucial in attracting valuable candidates, but they are expected as the norm. Our candidates at Matchfield report a higher salary is more attractive to them than a company offering many benefits. Adding benefits to your compensation packages won’t be enough in this era of inflation and worker autonomy. To get the big dogs, you need to pay for them. 

Nevertheless, there are strategies to implement in your compensation packages to make your open positions seem like the crème de la crème without breaking the bank.

Here are four key takeaways from Matchfield’s candidate pool of what attracts them to new opportunities. 

Keep compensation packages and salaries flexible. 

No candidate is surprised to learn that salaries are negotiated. They come with a price in mind of their worth and understand the company will have a different range. Knowing the average salary of the open role is essential. You are expected to keep it within a frame that can still give wiggle room for negotiation to happen. Here’s what to focus on with salary ranges: 

• Skill level within that position
• Years of experience
• Education level
• Specialized skills 

You can look at the U.S. Bureau of Statistics to find the average salary of most positions. A good rule of thumb when creating salary ranges is to take the midpoint of the average wage and apply a range of 30% on each side to it. 

Get ready to dive into the negotiation ring with them. Keep your mind open, and remember, if a candidate is worth it, they can help increase your company’s revenue far beyond their salary. 

Include work-from-home in your compensation packages

A company that offers work-from-home or flexible hybrid options is seen as much more desirable than a job that requires mandatory in-office time. The pandemic has proven to employees and employers that the world can still function from work-from-home. Although it may seem less productive, companies that use the work-from-home model full-time or part-time report a 47% increase in productivity. Companies that offer flexible work settings also see a 35% increase in retention. 

Our younger candidates ask more often if a company offers remote options. While not every job can be completely remote, flexibility in where one works is a massive asset to recruitment that can keep compensation packages lower. 

It’s not just remote work that younger people are seeking. Culture is a crucial aspect as well. 

Culture to highlight

While benefits are expected, culture is something that can boost your company to get more noticed with the Gen Z crowd entering the workforce. Ensuring you highlight authentic testimonials from your staff on your company’s website, social media, and job posts is integral to attracting prospects. 

It’s essential to keep the language of your culture to what your company does and not use cliché terms. People-oriented, team-oriented, and anything-oriented will create eye-rolls as candidates know these are just buzzwords. Instead, focus on what your company offers outside of work, such as: 

• We have a meditation room where you can decompress. 
• Staff outings that let you get to know your team members.
• A strong focus on professional growth and goal-setting. 
• Five mental health days are allotted per year to encourage positive mental health. 

An example of incorporating accountability and community into your workplace culture is getting a B Corp certificate. B Corp is a non-profit organization of businesses that follow standards to build a more sustainable and ethical global economy. Matchfield is a B Corp company under the Ian Martin group. Our culture ensures we are accountable for giving back to our local community and employees. 

Adding these steps could ensure your workplace culture is not only a buzzword to throw around during the first interview. Providing concrete facts about what your company does to provide excellent culture can see a sharp increase in job applications. 

Diversity and Inclusion in your Compensation Packages

Generation Z professionals are a growing population now entering the workforce and are changing what it means to be inclusive. A company needs to not only provide a generous salary to the employees but also make diversity and inclusion a commitment. 

83% of Gen Z candidates said how a company handles diversity and inclusion is extremely important when choosing a company to work for. Many make it a priority to ask about during the first interview. However, most are critical of companies who slap a rainbow sticker on their logo during Pride Month or say they support BIPOC diversity practices. They want to see hard evidence that a company is committing to diversity and inclusion. Here are concrete facts you can highlight:

• Create a specialized team that handles diversity initiatives and training. 
• Be aware of and acknowledge different cultural holidays. 
• Showcase people of color that work for you in campaigns. 
• Address current bias to hire similar people and work to hire people with diverse names and backgrounds.

Above all, it’s not enough to just say a company is diverse and inclusive. You have to provide concrete evidence on how you do this. Diversity and inclusion could make your compensation packages more appealing, especially to younger Gen Z professionals who make it an expectation. 

Higher compensation packages mean more significant opportunity

It may seem daunting to create a compensation package that addresses inflation rates, worker’s rights, culture, and inclusion and diversity. Remind yourself that no company can be 100% perfect in what they offer, but recognizing what your company can offer can lead to attracting great talent.