Salary negotiation on the rise while pay transparency shrinks

Tell your hiring managers to expect salary negotiation as a step in the job offer process. Today’s job seekers are confident in their bargaining power, suggests new research from global staffing firm Robert Half. More than half of professionals surveyed (55%) tried to negotiate a higher salary with their last employment offer, a 16-point jump from a similar survey released last year.

A separate survey finds many employers are willing to make a deal with candidates: 70% of senior managers said they expect some back-and-forth on salary. About six in 10 are more open to negotiating compensation (62%) and nonmonetary perks and benefits (59%) than they were a year ago.

Workers were asked, “Thinking of your last job offer, did you try to negotiate for higher pay?” Their responses:

2019:

Yes: 55%

No: 45%

2018:

Yes: 39%

No: 61%

Additional findings:

  • 68% of male employees tried to negotiate pay, versus 45% of women.
  • More professionals ages 18 to 34 (65%) asked for higher compensation compared to those ages 35 to 54 (55%) and 55 and older (38%).

“Job seekers with specialized skills are in high demand and may even be entertaining multiple offers,” said Paul McDonald, senior executive director for Robert Half. “With the odds in their favor, it’s little wonder more professionals are comfortable negotiating not only salary but also nonmonetary benefits, such as vacation days, flexible schedules and professional development.”

Employers sharing less pay info now than in 2010

Pay transparency—a hallmark of employers committed to pay equity—is less common now than it was in 2010. Forty-seven percent of organizations now provide employees only minimal information about others’ pay, compared to 32% in 2010, according to new research by the nonprofit WorldatWork organization and the Willis Towers Watson consulting firm.

Promotional increases (98%), merit (95%), market adjustments (84%) and internal equity adjustments (71%) are the most common variables used to make salary adjustments. While market adjustments increased from 76% in 2010, the other variables—including those for internal equity adjustments—have stayed consistent since 2010.

The survey, conducted every two years, gathers information about trends in compensation programs and practices, focusing on the prevalence of base and variable pay programs, as well as common practices used to administer and communicate about pay in today’s workplace.

Other key findings from the survey:

  • Use of formal performance assessments and performance ratings to set pay are trending down, from 84% in 2016 to 74% in 2018.
  • Only 53% of respondents indicate their employees have some understanding of their employers’ compensation philosophies.
  • Since 2012, there have not been significant changes in job evaluation methods used; 90% of employers set pay on the basis of market pricing, making it the most common method. Almost half (48%) of organizations market price annually.
  • Most organizations target median/ 50th percentile of the market for base and variable pay (87% and 78%, respectively).