Navigating heightened employee expectations of salary is certainly not a new HR challenge—but it could be one that is growing increasingly thorny and consequential.
A recent study finds that, amid employees and employers both facing rising costs, the gap between what the workforce expects in terms of salary and what organizations can realistically pay is wide. The report from JobLeads analyzed more than 800,000 job postings and salary expectation data from 245,000 candidates, finding that, globally, candidates expect $10,411 more than employers pay. The U.S. has the biggest gap of all countries studied: $33,332.
“This isn’t just an American phenomenon, though the U.S. leads the pack,” researchers write. “In fact, JobLeads found that 99% of all job applicants expect more than the market offers.”
After the U.S., the biggest gaps between pay expectation and reality were found in Canada, Australia and Great Britain. In France and Germany, on the other hand, job offers were significantly higher than expectations, by $22,000 and $10,000, respectively.
There are also vast differences among industries.
The biggest gap is reported in sales, where professionals expect a salary of about $133,000 but receive about $88,000, a difference of more than $44,000. Expectations are closer to reality in legal and finance, which report a difference in anticipated and actual salaries of $33,000 and $34,000, respectively.
“While these figures are relatively more aligned,” researchers say, “a gap of over $33,000 is still far from negligible.”
Pay transparency: the link between expectations and reality
What’s driving such big divides in employee perceptions?
“Combined with a cultural taboo around discussing salaries openly,” JobLeads researchers suggest, “many candidates may lack visibility into what employers are willing to pay, leading them to ask for less than the market would bear.”
Greater levels of pay transparency may start closing some of these chasms. The momentum for greater visibility into pay has spurred scores of cities and states to adopt pay transparency laws in recent years, and more action is expected after the EU Pay Transparency Directive goes into effect in a few weeks.
Pay transparency is becoming an increasing expectation among the public. New research from Monster found that 60% of job seekers say they won’t even apply to a job if it doesn’t offer a salary range. More than half of the candidates surveyed cited a lack of salary information as the top red flag that could discourage them from applying.
“Candidates increasingly expect clear pay information, straightforward job descriptions and efficient hiring processes before they commit their time,” researchers say.
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