CFOs are faced with meeting higher wage expectations as job candidates in today’s hot labor market increase their demands.
Fifty-four percent of employees and managers in the U.S. say they've had to negotiate a higher salary with their most recent offer, according to a survey of 2,800 employees and managers by staffing firm Robert Half. In 2018, those negotiations only happened in 39% of cases.
- The findings echo earlier research from the staffing firm, including a November study finding 98% of CFOs are open to some “back and forth” on salary with job candidates.
Filling open jobs with candidates who bring the right experience and the right salary expectations can be much harder than CFOs could have predicted, the survey suggests. As a result, many finance chiefs have been increasing the compensation figures they initially offer their candidates.
The handful of candidates who hadn’t negotiated their most recent offer named a few reasons why: satisfaction with the amount (55%), fear of losing the offer if they asked for more (18%), and discomfort with negotiations (18%).
"It’s important for CFOs to know where they can negotiate by looking at the total compensation package," Steve Saah, executive director of Robert Half Finance & Accounting told CFO Dive in an email. "If a higher base pay isn’t a possibility, figure out other elements that are up for negotiation, [such as] telecommuting or flexible scheduling."
If the budget is too tight to negotiate much, there are other ways of sweetening the offer, Saah says. These include offering professional development, paying for a portion of continuing education, and additional training.
"Irrespective of the department, retention is a concern for the whole enterprise," Saah says. "Turnover can have a negative ripple effect and cause a constant churn. It’s also problematic for attracting talent."
Many job candidates are likely to continue asking for higher pay in tandem with the growing strength of the job market; the Wall Street Journal pointed out that last month’s unemployment rate, 3.6%, nears a 50-year low.
Talent acquisition and retention are top priorities for CFOs, as high employee turnover can greatly impact a company’s bottom line. A recent study from staffing firm Accountemps found 63% of CFOs reported that worker turnover has increased in the past three years, and that lost productivity (29%), new hire training (26%) and recruiting (25%) are the costliest aspects of employee churn.
Turnover is "a huge issue for the whole organization. It affects the bottom line, but it also affects morale, productivity, and the brand of the company, if [the company] is seen as a high turnover place," Michael Steinitz, executive director at Accountemps, told CFO Dive earlier this month in an email.
"In today’s hiring market, employers need to be flexible to land and retain top talent," Saah concludes. Skilled professionals are in high demand, so hiring managers should craft offers that resonate with the individual employee. A high base pay may be important to some candidates, but others may value perks like flexibility and telecommuting. It’s about finding out what’s most important to the individual."