1 in 5 Companies Report Offering Lower Salaries Compared To Last Year

ResumeTemplates.com surveyed 1,000 business leaders in August 2024 to gain deeper insights into the current job market, including hiring practices and salaries being offered.

Study highlights:

• 22% of companies are offering candidates lower salaries than they did in 2023
• Anticipation of economic downturn drives reasons for reduced salaries
• 1 in 5 companies admit to actively replacing laid off workers with lower cost workers, and more plan to in 2025
• 35% of companies expect to implement hiring freezes next year, and 31% anticipate layoffs

22% of Companies Are Offering Lower Salaries Than Last Year for Some Positions

According to our survey, 93% of companies are currently hiring. Among companies hiring, 59% say they are filling more positions than last year. On the other hand, 22% are hiring fewer positions, and 17% say there is no difference in the number of positions for which they are seeking employees.

Two-thirds (67%) of companies say they are generally offering higher salaries than in 2023. However, 6% are offering lower salaries, and 26% say there is no variation.

Even among companies generally offering higher salaries than last year, many report that this isn’t the case across all positions. Overall, 22% of companies are offering lower salaries for at least some positions at their company.
The most common positions with lower salaries being offered compared to 2023 are administrative (47%), customer service (44%), information technology (IT)/technology (31%), sales (34%), and finance (27%).

“Hiring managers are willing to provide higher compensation to candidates they believe are worth the investment. Demonstrate that you have the right skill set and confidence. While your resume needs to show your accomplishments, the interview is where you need to shine. Even if you have a referral into an organization, you still need to speak confidently about your experience and what you’ll bring to the new organization,” says ResumeTemplates’ Chief Career Strategist Julia Toothacre.

“Competitive salaries also often depend on your location, industry, and company size. Salary expectations are also relative to each individual. Candidates need to determine their specific salary requirements in alignment with their experience and look for positions that meet those needs. Sometimes, switching locations or industries is the best way to obtain a more competitive salary in your function.”

1 in 10 companies report salary reductions of greater than 10%

Of companies that have reduced salaries for some positions, 17% report that salaries are 1% to 5% lower, 33% indicate a decrease of 6% to 10%, and 24% say salaries are 11% to 25% lower. Additionally, 7% say there’s been a decrease of 26% to 35%, 10% note a reduction of 36% to 50%, and 8% report more than 50%.

Anticipation of Economic Downturn Drives Reasons for Reduced Salaries

The primary reasons for offering lower salaries include an expectation of an economic downturn or market uncertainty (62%) and an inability to afford higher salaries (53%). Other factors include the perception that previous salaries were too high (48%) and reduced marketplace competition (45%).

“Organizations with experienced human resources teams will be familiar with the benchmarking tools available to ensure their organizations are offering appropriate salaries for available positions. While every organization can set whatever salary bands they want, it’s important to remember that inflation is high, and offering salaries that were competitive 20 years ago isn’t going to work today. If your employees are making what your managers made years ago, you’re not accounting for the rising cost of living,” says Toothacre.

1 in 5 Companies Admit to Actively Replacing Laid off Workers With Lower Cost Workers, and More Plan To in 2025

More than one in five (21%) companies are currently laying off employees and replacing them with lower-cost workers; 74% are not engaging in this practice, and 5% of respondents were unsure.

Looking ahead to 2025, 30% of companies say they definitely will (14%) or probably will (16%) replace laid-off employees with lower-cost workers, while 31% think it’s unlikely, and 27% say they definitely will not, with 13% unsure.

1 in 3 Companies Expect Hiring Freezes, Layoffs Next Year

For 2025, 35% of companies say they will definitely (13%) or likely (22%) implement a hiring freeze, while 33% believe it’s unlikely, and 20% are unsure.
Additionally, 31% of companies say they will definitely (11%) or likely (20%) have layoffs, while 34% think they are unlikely, and 18% are unsure.
The survey was conducted in August 2024. In total, 1,000 U.S. business leaders were surveyed.

Respondents also had to pass through a screening question ensuring they were knowledgeable about their company’s current hiring efforts.