As the job market cools, salaries for new recruits are dwindling as companies are no longer competing to fill pandemic-induced labor shortages.
In a survey conducted in July where ZipRecruiter asked 2,000 employers about their wage offerings, nearly half said they were reducing pay for recent job openings.
And according to ZipRecruiter’s most recent new hire survey, 35% of US workers who started a new job within the last quarter took a pay cut, about 5 percentage points more than staffers who took a trimmed-down salary to start a new gig in the first quarter.
Among new hires who take a pay cut, about half do so under pressure, the online employment marketplace said earlier this year, either because they were unemployed and need a new job or because they’re so unhappy that they’re desperate for a new gig.
The other half, meanwhile, traded pay for nonmonetary improvement, with about 27% of workers taking less stressful jobs while 10.5% opted for a new position with remote work and 13.8% of new hires took a position with more career growth potential.
Signing bonuses were also offered less than in previous quarters, with only 28% of people receiving the financial perk at all, regardless of whether they took a pay cut or increase.
Job recruiting site Glassdoor reported that the average salary for a new hire in August 2023 is $76,774, which includes a base salary of $59,900 and a bonus of $16,874.
These wages, however, are below the average “reservation wage” — or the minimum acceptable salary offer required for workers to switch jobs — American workers said they’d accept in the Fed’s latest survey of consumer expectations.
Americans’ expected salary hit $78,645 during the second quarter of 2023, the survey showed, marking a nearly 8% increase from the same time last year, when the average reservation wage hovered around $72,873.
Meanwhile, workers with a college degree now expect a $98,600 annual salary in order to take a new job, meaning they could face a harsh reality when entering the workforce.
Those who don’t have a degree indicated they would not accept a salary below $63,300, the Fed’s survey showed.
Chanteal Brayboy, a 25-year-old on the market for a user-experience design role, told The Wall Street Journal that she’s applied for more than 2,000 roles since finishing a design boot camp last summer.
She’s only received responses and interviews for a handful of companies over the past year, the outlet reported, during which she’s also noticed that posted salaries for the jobs she’s interested in have fallen around $10,000.
“The market is completely different now, companies know they can pay less,” Brayboy, a Michigan resident, told The Journal.
Recent Labor Department figures have shown that overall wage growth in the US is still on the rise — increasing 1.1% year-over-year in July — even surpassing inflation in June for the first time in two years, though it has declined to 5.7% since peaking last summer.