According to new research from employer branding experts Universum, today’s candidates generally value their worth in line with the overall market in their area. That means there is little discrepancy between expected salaries and what local economies are actually paying.
In the Cost of Talent 2016 study, Universum asked business and engineering students from 57 countries what they expected to earn in their first jobs post-graduation. Overall, the students held realistic expectations. The study also found that talent was most expensive in Switzerland, Denmark, and the U.S., while it was least expensive in Romania and Vietnam.
It Takes More Than Cash to Attract the Best
As the world of work transforms, new skill sets, especially within STEM fields, are in high demand. However, employers can’t always find these skills when they need them. According to PwC’s CEO survey, 77 percent of CEOs say the availability or lack of key skills was a threat to their organization’s growth prospects.
“Supply and demand make business and engineering talent desirable and expensive to hire,” says Dustin Clinard, managing director for the Americas at Universum. “In addition, talent now considers more employers to work for than ever before. Students today have more options from which to choose – from startups to corporations – and are willing to hold out for an offer that meets their career goals and culture fit.”
A key consideration when recruiting new talent is striking a balance between a competitive salary and the true value of a candidate in terms of experience and skill set.
“High wages are not the only thing employers should highlight when speaking to prospective candidates,” Clinard says. “Intangible perks or desirable working culture are one way to sell your offer, including flexible working conditions, honoring work/life balance, and opportunities for leadership and development. These are increasingly attractive to today’s talent.”
For example, top organizations such as Google or NASA don’t rely solely on high salaries to woo talent. They also tout the fact that their employees have the opportunity to work in innovative environments on cutting-edge projects. These are the sorts of non-salary elements that employers should highlight when recruiting talent – especially when dealing with candidates who overvalue their market worth.
“In the 2016 Talent Survey, the top three most attractive attributes in a potential employer for students in the U.S. were inspiring purpose, a creative and dynamic work environment, and respect for its people,” Clinard says. “Combining competitive salaries with these career objectives and job considerations could greatly influence talent.”
Clinard says top business and engineering candidates are “highly motivated by purpose and opportunities to make a difference.” In fact, these qualities may be even more important to them than high pay.
“Employers should highlight what differentiates their working culture and mission from competitors to really engage with top talent,” Clinard concludes.
Realistic Expectations Don’t Close the Gender Pay Gap
When talking about the cost of talent, it is impossible to gloss over the issue of the gender pay gap. While Universum’s survey found that candidates around the globe are in tune with their market worth, it also found that talent’s value was affected by gender.
“Across the globe, we are continuing to see male talent demand and negotiate higher salaries than women do in both business and engineering fields,” says Jonas Barck, global director of media and public relations for Universum. “Unfortunately, women’s lower salary expectations do not help to eliminate the pay gap, and in many circumstances, have the opposite effect. Out of the 57 countries that took part in our research, only Kenya, Morocco, and the UAE were contrary to this trend.”
There is no single solution to the multifaceted issue of the gender wage gap. Gender pay gaps exist in nearly every industry, including high-paying STEM fields. One persistent factor in pay inequality may be that there are few women in key leadership roles to whom other women climbing the corporate ladder can look for guidance and mentorship. Female talent looking to enter fields largely comprised of male employees find it difficult to determine what they should be earning because they lack female peers with whom to talk about salary expectations.