Pay Matters: What Recruiters Need Hiring Managers to Know

January 18, 2021
Author: Glenn Hunter

It may not be as difficult as firing someone or grounding your wayward teenager, but sitting down with a client to talk about pay for an open position can be a tough conversation for recruiter and client alike.

Talent acquisition professionals guide hiring managers in understanding what makes a competitive salary offer.

Countless organizations impacted by the coronavirus pandemic may have also seen declined revenues in the last year, causing hesitation to spend large amounts of money, including on compensation. However, offering pay ranges lower than market value won’t attract the quality candidates that clients need.

Some employers understand that. In fact, salaries in some industries have risen during the pandemic. And, as more people are vaccinated against COVID-19, a stronger job market may result in still higher wages and benefits later this year.

In every case, one of the recruiter’s most important jobs is to advise hiring managers on wage demands and compensation. This includes carefully explaining all the key drivers that go into making a smart salary offer, especially if the client’s original pay range is not competitive for the role. And there are multiple variables that explain what drives compensation levels.

The smartest salary offer isn’t necessarily one that’s determined by past employee pay or by the suggestion of a manager trying to keep payroll costs down. Instead, salary offers for quality candidates are driven by a mosaic of conditions in the local job market, as well as what that market will currently bear.

Related: Why Using Outdated Salary Data Negatively Affects the Recruitment Process

As a result, it’s important for recruiters to have a handle on employment conditions in their markets, including up-to-date knowledge about the area’s job growth, wage growth, Gross Domestic Product and unemployment rate. They also need insight into a location’s most in-demand occupations and their client’s industry performance.

The market’s talent pipeline for future employees is critical to know and can be gleaned by examining the likes of local university enrollment, graduation rates and completions by degree level. In addition, the level of diversity in an area – including by race, age and gender – is another important factor.

Understanding Drivers of the Job Market


All these elements together will provide valuable insight into hiring trends and volumes and whether there’s enough talent in the local area to fill a role.

For example, if demand is high and supply is tight for a given position, the salary offer will need to be more generous. The reverse is also true. If the supply is so tight that not enough local candidates are available, the recruiter may even need to search beyond the local job market to fill the role. That’s an increasingly popular option these days, given the rise of the remote work trend.

Fortunately for recruiters, technology is available to help inform location and talent strategies. Software tools that allow recruiters to determine the right salary, at the right time, while gaining insight into employment conditions and the available talent supply, provide a strategic recruiting edge. Using such a data-driven approach will make it easier to ensure that clients don’t lose out on great candidates because of unrealistic offers.

According to a November study by Ceridian, an HR software services firm, 64% of all U.S workers are looking for a new opportunity or would consider switching jobs if approached by another company. The study also said U.S. talent on average expects a raise of 29% to change roles.

So, helping your client attract new employees with smart, data-driven salary offers is sure to remain one of your most important jobs.

LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.