There is a growing tension in the Austin job market, with some employers declaring that people don’t want to work anymore. Others feel salaries are either too low or too high, not to mention job seekers’ expectations and priorities have rapidly shifted. The Austin job market is being strongly impacted right now as this has become one of the least affordable cities in America.
How is that playing out when it comes to recruiting and retention?
Forecasting is difficult right now because we’re still in the middle of a market shift. We recently addressed the national labor shortage, observing that 47.5 million people switched jobs last year and that the pandemic accelerated retirement for 2.4 million more people than were expected under normal conditions. It is painful to note, but deaths, chronic health issues, and family dynamic changes directly caused by the pandemic have impacted the size of the talent pool, too.
The Austin job market has long been extremely competitive, but typically amongst job seekers. Employers were in the drivers’ seats more often than not. Today, the competition is between employers vying for a smaller number of job seekers. And those job seekers? They have whiplash from the changing Austin market and cost of living, too.
The Salary Saga
Regarding salaries, Blair Wright, moderator of the Austin Digital Jobs (ADJ) Facebook Group, said, “They’re stagnating and even when there is a raise, it doesn’t match the cost of living. I’ve lived in Austin for ten years, and the only way I’ve ever received a decent raise is to change employers.”
This sentiment is echoed in the Austin job market across every sector every day.
The previously mentioned skyrocketing living expenses have made Austin one of the least affordable cities, and locals don’t see any hope of that changing. This leads us to the big question: Can top talent afford to work for you? We covered this issue from the perspective of software developers recently. It’s an important consideration when hiring tech and other professionals and executives. But when considering hourly, entry-level, support, and blue-collar workers, it’s not just about keeping up with the competition; it’s about paying enough to keep your workers’ heads above water as they struggle to continue living in a city that’s quickly pricing them out.
With Redfin revealing rents in Austin rose nearly 50% in the past year, it is no surprise that people are scrambling. Logically, they’re now looking at their paychecks to keep up with these painful living expenses. Many are doing as Wright did and simply changing employers. Others are moving further outside the city limits.
The silver lining of the Austin job market is that if you’re hiring—and you effectively communicate how you’re aligning salaries with the staggering inflation and cost of living—you can snag some seriously talented people who are simply looking for that alignment.
“We’re seeing salaries and hourly pay around 15 to 25% higher than this time last year,” Claire Reese, The HT Group’s Vice President of Sales, says. Like Wright, she has seen those numbers level out in recent weeks. It remains, however, that employers who haven’t kept up to this point are at a clear disadvantage.
Remote Work Rules
Let’s be clear on compensation, however: There’s more to life than money, and workers know that. That’s excellent news because keeping in lockstep with inflation isn’t realistic. But the hard question is: What else are you bringing to the table?
One of the biggest perks employers can offer is remote work options.
“If I can work remotely, why would I stick around the office making a tiny bit more every year?” Wright points out— millions of workers agree.
Some experts predict that by 2025, up to 70% of jobs can and will be done remotely, especially among knowledge workers. A recent PwC survey found that in this tight labor market, 30% of executives have made remote work permanent in roles that allow for it as part of a broader effort to remain competitive. The future of remote, hybrid, and on-site demand remains unclear, but we can all see that the pandemic dramatically accelerated workers’ desire to be remote.
This desire is not simply an immature refusal to wear actual pants and be judged by how many hours those pants spend sitting at a desk, it is also a cultural transition universally experienced. We were forced to work from home at the beginning of the pandemic, and while this led to some divorces, it led others to realize that they quite like their families and want to see more of them. Others felt a reprieve from traffic and the perceived social pressures of being in an office setting.
The pandemic changed who we are and what we most value. For some, that’s family; for others, that’s the ability to bake bread at 2 pm or do some gardening while they would otherwise be commuting. Workers’ identities are shifting away from strictly being their job title. This puts employers in a tricky spot because ping pong tables and a $25 internet stipend aren’t cutting it anymore. Workers’ relationships with compensation have changed. But if you’re amiable to the shift, you can open new doors for both current employees being priced out of Austin and for new talent, too. Small towns like Beaumont, Texas, are actually offering incentives for workers to move to their more affordable communities while keeping their “big city” remote jobs.
Today, employers must do five key things to remain competitive in the Austin job market, and it’s not as hard as you’d think. Employers must compensate generously, streamline the hiring process to be more competitive, be realistic about and clearly communicate expectations for work arrangements, take diversity and inclusion seriously, and focus on retention from day one. Your HT Group recruiters can help.