Job hunting has always been competitive for candidates, but companies who need skilled employees are starting to feel the heat. Candidates and staffing companies alike are seeing a rise in low-compensation offers with high one-off bonuses, which is the perfect recipe for a short-term employee.
So why is this happening? Companies are citing a need to maintain internal equity, meaning that they can and will only pay incoming employees what they are paying those who already do the same work. While, on a surface level, this certainly seems fair to all parties, the truth is that this has been a building issue for decades now. But how exactly did it all start and how can we fix it?
Where Did it Start?
Working in healthcare often starts with schooling, so we can start there. In the United States, medical school is incredibly expensive. This is partially due to inflation, which has touched every inch of the economy, but is also due to demand. Where inflation can explain why $1 in 1980 is worth $3.60 today, it cannot explain why medical schools take in less than half of those who apply to their programs or why they charge so much.
Ultimately, those answers go hand in hand. Medical schools limit their application acceptance and charge more to seem more exclusive and, therefore, more prestigious. It can be easy to attest the rise in medical school costs over the last 30 years to inflation, but the 3.06% increase previously described does not explain the fee jump of 165% in private and 312% in public medical schools. These restrictive efforts make it more and more difficult for people to get the education and qualifications they need to treat others without breaking the bank.
In order to pay back these immense costs, employees need to enter the workforce with a livable wage, but companies are not yet prepared for this. While some groups might balk at what a new graduate might be looking for as a starter payrate, it is important to keep in mind what they paid upfront to join this workforce. Even with that in mind, we still have to address the precedent set by the last 30 years of medical professionals.
When medical schooling was not as expensive and the field of competition was in favor of the companies who were hiring, lower wages balanced by good benefits were considered acceptable. Many groups still utilize this, as it became more and more difficult over the years to raise the pay of employees to suddenly match the needs of the newly graduated. This was a sustainable strategy until people began leaving the medical field in favor of jobs that paid wages beyond just what they needed to scrape by. Medical professionals of all levels scattered into travel or administrative positions as well, as they either upped the pay or allowed for a work-life balance.
Until internal equity hits a maintainable and viable amount for employees, companies will continue to try to bring in candidates with promises of sign-on, relocation, and other bonuses, as those do not count towards the employee’s salary. Unfortunately, many candidates feel cheated when they realize that their core compensation will be all they are paid after their first year. This often leads to employees to restart their job hunts sooner rather than later, as they have no reason to be loyal to a group that does not pay them a wage that is fitting to their education, experience, and cost of living.
This becomes a vicious cycle of hiring and losing quality candidates, which ultimately leads to companies losing money due to the fact that they promised so much on the front end and will likely have to do the same all over again to find new talent.
Finding a Solution
It is without question that, at some point, every company will need to give raises to long-term employees in order to maintain their internal equity while still paying employees what they need. The alternative to doing so will be that employees will simply leave for places that will pay them proper wages, sometimes even leaving the healthcare field to do so.
That being said, doing so is expensive and takes a long time to put into place in order to be sustainable. So, keeping in mind that this will be an eventual necessity for maintaining a workplace, there is nothing wrong with looking for temporary solutions.
A manageable and fast-acting temporary solution that can bring in talented employees is a temp-to-perm offer. Temp-to-perm offers have become much more popular in recent years as they allow companies and employees to test out how it feels to work together while still being able to separate amicably at a designated time or be able to launch directly into a permanent contract that both sides feel comfortable with.
During the time that companies are using temp-to-perm solutions, they are still paying temporary employees more, usually doing so under a short-term contract that does not include other benefits of full-time employment, like healthcare benefits, so the company still saves on the backend. During the contract’s timeline, temp-to-perm employees are likely to search for their next workplace if they feel that the pay they will be promised after they are hired on permanently is not enough, so utilizing this time to properly fix the internal budget to properly pay employees is absolutely essential.
If you are unsure about how to create opportunities such as these, reach out to us here and we’ll connect you with a specialized recruiter who can help you get started. If you are employee looking for a new opportunity, we can help you there, too! Either apply to one of our open opportunities here or send us an updated resume here.