It’s officially May, meaning recent college grads will soon flood the workplace with new ideas and expectations for their employers—including what they expect to earn. Despite the precarious economy, with some companies rescinding job offers and delaying internships, college graduates’ compensation expectations remain higher than employers anticipate paying.
A report released Tuesday by recruiting software platform iCIMS finds that recent grads expect an average salary of $66,467, over $8,000 more than employers expect to pay new entry-level hires. But there’s good news for cash-strapped employers: College grads’ salary expectations have tempered slightly over the past year.
Last year’s graduates expected to earn over $70,000 in their first jobs post-grad. The slight cooling of compensation expectations reflects a more cautious sentiment in light of an uncertain economy, layoffs, and bank collapses.
“We have an interesting dynamic right now because their expectations have come down a little bit from last year,” says Christy Spilka, VP and global head of talent acquisition at iCIMS. “But there is this other side—with inflation, things cost more. I think [college grads are] also trying to make sure they’re realistic on that side of things.”
The class of 2020 also had notably muted pay expectations due to economic uncertainty. In the first year of the pandemic, recent grads expected to earn an average salary of $48,781, though HR professionals said they were willing to pay $54,585 on average.
Transparency is required to close the gap between employer and employee salary expectations, Spilka says.
“Many folks want compensation listed on the job description when they’re applying to the role. That will be really important for employers to consider,” says Spilka. Forty-three percent of entry-level job applicants say they won’t apply for a role if the salary range is not listed in the job posting, according to iCIMS. And the percentage is even higher among women (48%).
“Employers posting the compensation on the job is helpful because people have that understanding when they’re applying of exactly what that opportunity is paying,” says Spilka. “Just having that conversation with the candidate early on and making sure they understand the role’s compensation and why and how is very helpful.”
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"What keeps you up at night?" I asked Heather Dunn, chief people officer at recruiting platform Gem, last week. Her response: How to keep employees engaged during an economic downturn.
“I have a theory right now that folks are staying put a bit because of this climate. So I think about our critical talent across the organization—how do we secure them, not only for the time being but also motivating and getting them excited about the future of Gem? I've spent a lot of time thinking about tactics to engage with that talent and get creative because they will be the ones helping us reaccelerate when the economy reaccelerates.”
Around the Table
A round-up of the most important HR headlines, studies, podcasts, and long-reads.
- Meta's workforce is roiled by a morale crisis and they blame CEO Mark Zuckerberg for the company’s recent layoffs. Washington Post
- Home Depot pledged to invest $1 billion in raises for frontline employees. CNBC
- The federal government plans to relax its policies on past drug use to hire more young people who it would otherwise have automatically disqualified. New York Times
- General Motors laid off several hundred contractors over the weekend. Wall Street Journal
- Almost 25% of jobs are expected to change due to A.I. and digitization over the next five years, according to a new report by the World Economic Forum. Bloomberg
Everything you need to know from Fortune.
Deadly delivery. Gig economy workers fear their safety after recent attacks against delivery people, including sexual assaults and murders. —Alexandra Olson, Wyatte Grantham-Philips
Child labor scandal. A company that cleans slaughterhouses lost several contracts with its biggest clients after a scandal broke that it reportedly hired 100 child workers. —Josh Funk
Skills gap widens. Nearly half of workers will have to upskill this decade as the demand for skills outpaces the supply. —Jane Thier
Hollywood writers strike. The union representing Hollywood’s 11,500 writers declared late Monday that they will launch an industrywide strike after negotiations between writers and studios failed to reach a new contract. —Jack Coyle, Associated Press
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