How to Know if the Price is Right?
In today’s economy, figuring out the “right” pay for a job, whether you’re the one giving or receiving it, can feel a bit like pricing items on The Price is Right. If the salary is too low, then either party may demonstrate they don’t understand the value of the work or position. If the salary is too high, it may inhibit future raises or other investments in the employee.
The last four years have seen dramatic increases in both hourly and salaried positions, across all industries and skill levels. However, average pre-pandemic pay levels had been stagnant for decades, while costs of living steadily increased, especially for basic needs like food, housing and transportation.
With Connecticut’s minimum wage set to increase on January 1, 2025, from $15.69 to $16.35 per hour, both employers and employees are feeling the heat. This marks the fourth wage hike in recent years, a sign of continued, changing economic tides and changing perceptions about the value of work at all skill levels. (Office of the Governor of Connecticut, 2023). For suburban and more rural economies, figuring out how everyone can sustain their lives and businesses will be a challenge. Setting more realistic expectations about compensation based on the job itself is one way to restore some balance.
Picking a Number
For employers, especially small businesses, rising wages come with mounting operational costs. The challenge is finding a balance: paying workers fairly while keeping the business afloat. Choosing a salary or hourly wage rate solely based on the mindset from within your business is no longer an option if the goal is to find the best candidates possible. Employers need to consider a range of factors, from job responsibilities and necessary qualifications to local labor market conditions:
- Does the role require special tools or training?
- How is the job structured to make it work for available candidates (e.g. different shifts, onsite/hybrid/remote, scheduled hours)?
- Are there many qualified candidates in the area or is this a specialized skill set?
- Are candidates commuting long distances?
- What are the industry and market standards for the position?
- What are the expected salary increases after the first 90 days and on an annual basis?
- Are there benefits or other perks that can help offset a lower pay rate if that’s what your business requires?
All of these factors play a part in determining a fair pay for your business, but also one that will attract and retain the needed talent. How you determine and communicate your compensation strategy to candidates will demonstrate you’ve considered their perspective, while also stating expectations for their performance up front.
Worth It: You vs. The Job
On other side of the table, employees are also navigating a tricky landscape. Sure, wages have increased, but so are prices for just about everything—rent, groceries, gas, heat, and more. The paychecks may have gotten bigger, but everyday bills haven’t gotten smaller. For candidates, the key is to rethink salary expectations.
Instead of anchoring on past earnings, it’s better to align expectations with the role’s requirements and market standards. If you’re switching to a new industry, a part-time or lower-skilled position, it’s only natural that the pay will reflect that shift. Your experience and qualifications may be overmatched for the position you’re considering, you should still expect to get paid what the job is worth.
Closing the Gap
Open and honest dialogue remains a powerful tool for both sides during the negotiation. Employers can use it to attract top talent without breaking the bank, and employees can advocate for what they’re worth. Compensation is also more than just the monetary pay. Employers can find other benefits or perks to help close the gap and make the position more viable for their ideal candidates.
Including a team like AEI Staffing can help clarify goals, enable clear communication and find ways to bridge any gaps. This ensures everyone feels they’ve landed on not just a fair deal, but also a stable one. In the end, the “right” price is less about hitting an exact number and more about finding common ground where both parties can thrive and avoid turnover for everyone.
So, whether you’re hiring or job hunting, take a deep breath and do the math. The perfect balance might just be within reach. After all, in this game, the winning bid isn’t about guessing—it’s about understanding the market, the role, and the needs of all involved.
Source: Office of the Governor of Connecticut. (2023). Governor Lamont reminds residents that Connecticut’s minimum wage is scheduled to increase. https://portal.ct.gov
