As an Executive Recruiter for the Label Industry, I see a strong growth trend making recruitment increasingly competitive. I’m frequently asked about compensation in the marketplace and wanted to share some trends that we’re seeing as pertinent in 2018:
1. Compensation is Becoming a Workplace Topic: A recent article in the Wall Street Journal cited evidence that nearly half of millennials surveyed said they talk about compensation with friends and coworkers, compared with 36% of Americans. Combined with a recent government focus on wage parity, sites like Glassdoor, and other sources. Employees will know more about their peers’ compensation than ever before.
2. Ability to Inquire about Candidates’ Past Compensation Limited: While your employees may be discussing compensation more than ever, your company’s ability to discuss pertinent information is becoming more limited. In states like Oregon, Delaware, and Massachusetts, as well as in some large cities, it will soon be illegal to inquire about a candidate’s current compensation, as discussed in an article by USA Today. Some law firms have even suggested that asking about a candidate’s expectations could be covered under these laws.
3. Battle between “European” and “American” Compensation Models Continues: As more companies look to enter the US market, the debate over how to compensate sales professionals rages on. Do we focus on a more “European” style, where a large portion of compensation is based on company performance, or an “American” style, where individual contribution and commission reign supreme? You can ultimately always squeeze a square peg in a round hole, but how do you keep a top performer motivated and compensated competitively when the company has a tough year?
4. Employment Costs Increasing: MarketWatch recently reported that the ECI (Employment Cost Index) is up 2.5% over last year. This was largely driven by wages, which grew .7% and benefits, which advanced .8%. As the unemployment rate continues to drop, companies have been forced to become more competitive with wages. While the growth rate has remained lower than in the past, this cost is something to watch closely over the next 12 months.
5. Candidate-Driven Job Market Continues: For most industries across the US, we’re expecting the candidate-driven job market to continue and the Label & Narrow Industry is no exception. For job seekers, this is great news. It means they have the power to be very selective regarding job opportunities and employers. For employers this means it’s high time to review talent acquisition strategies. Employers need to prioritize the way they source candidates, the experience those candidates have, and the offers they eventually make. They also need to move faster on making hiring decisions. In-demand talent is often gone within 10 days and yet the average time to fill a position in 2017 was 27 days, an all-time high, based on statistics from OfficeVibe. Plus, open positions can be very costly. For example, if an open sales position has a $900,000 annual sales quota and a total annual compensation of approximately $80,000, the company would lose about $2,794 each day the position remained unfilled.
About the author: Dan Miller is an Executive Recruiter with Direct Recruiters Inc., Cleveland, Ohio. He leads the expansion of DRI’s Label and Narrow Web practice area. Contact Dan Miller at 440-996-0868 or firstname.lastname@example.org or visit the DRI website.