A conversation we hear surprisingly often in hiring goes something like this. A hiring manager walks through a role, the responsibilities, the schedule, and maybe a few must-have qualifications. They close by saying, “We’re paying $28 an hour for this one.” The recruiter nods, writes it down, and starts searching. A few days later they find a candidate who appears to be a great fit. The background lines up, the experience is relevant, and the person seems capable of doing the job well. But there’s one problem. The candidate wants $33 an hour. So the recruiter decides they aren’t a fit and never submits them. On the surface, that sounds reasonable. The hiring manager said $28. The candidate said $33. Case closed.
We feel strongly that logic is incorrect.
If a candidate is qualified for a role (and not wildly overqualified), their pay expectation is not an unreasonable demand. It is information. It is the market telling you something about what that type of labor currently costs. Ignoring that signal because it doesn’t match a budget is a bit like covering the thermostat because you don’t like the temperature.
This points to one of the more persistent misunderstandings in hiring: the idea that someone “sets” wages. Employers often talk as if they do. Candidates sometimes believe they should be able to dictate them. Recruiters sometimes get blamed (or credited) for pushing them up or down. But the truth is that it’s naïve to believe any one group is actually in control. Wages are not set. They emerge.
Adam Smith (you know him from family dinners when someone wants to explain how markets work) wrote about this dynamic 250 years ago in The Wealth of Nations. In the chapter “Of Wages and Profit in the Different Employments of Labour and Stock,” Smith proposed a number of factors on why different jobs pay different wages:
“First, The wages of labour vary with the ease or hardship, the cleanliness or dirtiness, the honourableness or dishonourableness of the employment… Secondly, the wages of labour vary with the easiness and cheapness, or the difficulty and expence of learning the business… Thirdly, The wages of labour in different occupations vary with the constancy or inconstancy of employment… Fourthly, The wages of labour vary according to the small or great trust which must be reposed in the workmen… Fifthly, The wages of labour in different employments vary according to the probability or improbability of success in them.”
In other words, wages emerge from trade-offs. The market works to sort through all of these forces until supply and demand settle into some rough equilibrium to balance the total advantages and disadvantages of different occupations.
Which brings us back to the $28 role and the $33 candidate. When a company says “we will only pay X,” they are actually describing a constraint. Maybe it is a budget. Maybe it is internal equity with the current team. Maybe it is simply what the organization believes the role should cost. Those are real constraints. But, importantly, they do not actually determine the wage. The wage becomes real only when a specific employer and a specific worker agree to work together.
And that process often reveals new information. Sometimes the market confirms the employer’s expectations and candidates happily accept the rate. Sometimes the opposite happens, and every qualified candidate seems to want just a little more. When candidates are filtered out solely because their expectation is slightly above the stated range, that limits the feedback loop that tells you where the real market price sits.
In practice, hiring is largely about navigating trade-offs. If you want ten years of experience, specialized skills, and leadership ability, the market will price that accordingly. If you are willing to flex on experience, train someone internally, or rethink the responsibilities of the role, the equation changes. To us, great recruiting is not trying to simply find someone who perfectly matches the pay band and job description at the same time. It’s understanding what the role truly requires, identifying candidates who can succeed in it, and helping both sides evaluate trades-offs to maximize value creation on both sides.
This can mean showing a hiring manager the market price for a certain skill set is slightly higher than expected. Or maybe it’s helping them realize they do not actually need every bullet point on the job description. And sometimes it means helping a candidate see that stability, growth opportunity, or culture might matter more than a small difference in starting hourly pay.
Because in the end, wages aren’t determined by who insists the hardest. They are discovered through conversation, trade-offs, and information flowing back and forth. And, occasionally, the difference between $28 and $33 is simply the market trying to tell us something.
Until next time,
Your Spherion WI & Northern IL team