June 12, 2023

Salary bands haven’t kept up with inflation


Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.

Unless you bailed

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 get 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.

Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.

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