Can’t Fill Your Open Positions? How Competitive is your Hourly Wage?
When a position stays open longer than expected, the first reaction is often to focus on recruiting.
Are enough candidates applying? Is the job being advertised in the right places? Is the staffing agency doing enough to find people?
Those are important questions. But there is another question employers should ask:
Is the hourly wage competitive for the people we are trying to hire?
A position can generate plenty of applicants and still be difficult to fill if qualified candidates have better-paying options nearby. And when that happens, holding the line on an hourly rate may ultimately cost more than adjusting it.
The goal isn’t simply to pay more. It’s to understand what your local labor market is telling you and make a decision based on the total cost of filling — or not filling — the position.
The Real Cost of an Unfilled Position
Consider a manufacturer or distribution center that needs 10 additional production associates.
Management has budgeted $18 per hour, but recruiting activity suggests $20 per hour would make the positions more competitive.
The initial thought is,:
Increasing the rate by $2 per hour sounds expensive.
For 10 employees working 40 hours per week:
10 employees × $2 × 40 hours = $800 per week.
Over 52 weeks, that’s $41,600 in additional wages if all 10 employees work full-time for the entire year.
But $41,600 isn’t necessarily the number an employer should use to decide whether the increase makes financial sense.
The better question is:
What is it costing the operation to leave those positions unfilled?
That calculation can include:
- Overtime for existing employees
- Lost or delayed production
- Missed shipping or fulfillment targets
- Additional workload for supervisors
- Increased reliance on higher-cost coverage
- Quality issues associated with understaffing or excessive overtime
- Employee burnout and turnover
- Recruiting and training costs when new employees leave shortly after starting
The answer will be different for every company.
If an open production position contributes to thousands of dollars in lost output each week, saving $80 per week by keeping the wage $2 lower may not be much of a savings at all.
That’s why hourly wage decisions should be evaluated as an operational decision, not simply a labor-cost decision.
Start by Understanding the Market Wage
Before changing a pay rate, employers need reliable information.
There is no single website that can tell you exactly what you should pay. However, several resources can help establish a reasonable market range.
Bureau of Labor Statistics Occupational Wage Data
The U.S. Bureau of Labor Statistics’ Occupational Employment and Wage Statistics (OEWS) program is one of the best places to start.
BLS publishes wage estimates by occupation at the national, state, metropolitan and nonmetropolitan-area levels. The current published OEWS estimates are from May 2025.
That geographic detail matters.
A forklift operator, machine operator or material handler in Indianapolis may face a very different labor market than someone performing the same job in Dallas-Fort Worth, Atlanta or Louisville.
CareerOneStop Salary Finder
For employers looking for a simpler interface, the U.S. Department of Labor-sponsored CareerOneStop Salary Finder allows users to search wage information by occupation and location.
Its wage tools provide local, state and national wage information for hundreds of occupations, making it useful for a quick compensation check.
Look at Current Job Postings in Your Hiring Area
Government data provides a strong benchmark, but employers should also look at what is happening right now.
Search current openings for comparable jobs within the distance candidates would realistically travel to your facility.
Don’t just search by job title. Compare:
- Starting wage
- Shift
- Schedule
- Experience requirements
- Physical requirements
- Overtime expectations
- Benefits
- Bonuses or incentives
- Location
This helps answer a different question from historical wage data:
What alternatives does a candidate have today?
If your position pays $18 per hour and several employers within a reasonable commute are advertising comparable work at $20–$21, recruiters may have a difficult time overcoming that difference.
Don't Make the Mistake of Treating the Average as the "Right" Wage
Finding the local median or average wage is useful, but it isn’t the end of the analysis. Two jobs with the same title can have very different recruiting challenges.
An employer may need to pay differently because a position involves:
- Second or third shift. A less desirable schedule may require a shift differential to attract enough candidates.
- Physical requirements. Jobs involving heavier lifting, repetitive work, extreme temperatures or other demanding conditions may compete differently for workers.
- Location. A facility with limited public transportation or a longer commute may have a smaller available candidate pool.
- Experience or certification requirements. Requiring specialized equipment experience, certifications or several years of experience changes the available talent pool.
- Mandatory overtime or weekend schedules. A higher wage may be necessary when schedule requirements limit the number of interested candidates.
- Local competition. A new distribution center or manufacturing operation can change hiring conditions quickly if it needs hundreds of workers from the same local labor pool.
That’s why compensation decisions require more than looking up one number.
A better way to think about it is:
Market wage + job requirements + shift + location + competition + cost of vacancy = a better compensation decision.
Listen to What Candidates Are Telling You
Labor-market data tells part of the story. Recruiters can provide another valuable source of information.
If candidates consistently decline interviews or offers because of compensation, that’s market intelligence.
Employers should ask recruiters questions such as:
- Are candidates accepting interviews at this rate?
- Why are qualified candidates declining offers?
- What wages are candidates requesting?
- What are comparable employers offering?
- Are certain shifts significantly harder to recruit for?
- Has candidate response changed recently?
One candidate asking for more money doesn’t necessarily indicate a market shift.
But when recruiters repeatedly hear the same feedback, it deserves attention.
A Few Dollars More Can Sometimes Change the Economics
Employers understandably need to control labor costs. Raising wages without understanding the financial impact isn’t the answer.
But neither is focusing only on the hourly rate.
There is a meaningful difference between asking:
“Can we afford to pay another $2 per hour?”
and asking:
“Which costs us more: another $2 per hour or continuing to operate with 10 open positions?”
The second question considers the effect on the entire operation.
It also doesn’t have to be an all-or-nothing decision.
Depending on the situation, employers can evaluate options such as shift differentials, targeted starting rates for difficult positions, attendance incentives or other compensation strategies rather than making broad changes without supporting data.
The objective should be to determine what combination of compensation, job requirements and recruiting strategy produces a reliable workforce at a sustainable cost.
Your Staffing Partner Should Help You Understand the Market
If you use a staffing agency, wage analysis shouldn’t fall entirely on your HR or operations team.
A staffing partner is talking to candidates every day. That creates visibility into what candidates are requesting, which jobs are receiving strong response and where recruiting challenges are beginning to emerge.
When a position becomes increasingly difficult to fill, your staffing partner should be willing to help determine why.
That can include reviewing:
- Local occupational wage data
- Comparable positions in the market
- Current candidate feedback
- Recruiting response rates
- Shift and schedule requirements
- Geographic hiring challenges
- Changes in local competition
In some situations, compensation will be the problem. In others, the issue may be schedule, requirements, location, recruiting strategy or a combination of factors.
The important part is identifying the issue instead of simply continuing the same recruiting activity and expecting a different result.
Ask for a Wage Analysis
If open positions are taking longer to fill, ask your staffing partner for a wage analysis.
And ideally, you shouldn’t always have to ask.
When recruiters see candidate behavior changing or notice that your pay rates are falling behind comparable opportunities, a strategic staffing partner should bring that information to you proactively.
At Diverse Staffing, we believe staffing should provide employers with more than candidates. Our teams work with clients to understand workforce challenges, local hiring conditions and the factors affecting their ability to attract and retain employees.
Because sometimes the question isn’t simply, “Why aren’t these jobs getting filled?”
It’s “What is the cost of keeping them open?”
If you’re struggling to fill positions or want a clearer picture of how your wages compare with the local labor market, speak with a Diverse Staffing workforce expert about your hiring needs and request a wage analysis.
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