Bosses Are Finding Ways to Pay Workers Less

Bosses are quietly trying to reset worker pay levels, saying the era of overpaying for talent is over.

Pay for many white-collar recruits shrank last year , and now wages for new hires in construction, manufacturing, food and other blue-collar sectors appear to be ebbing too, according to an analysis of millions of jobs posted on ZipRecruiter.com .

Job seekers report seeing roles that once offered salaries between $175,000 and $200,000 a year ago now being advertised for tens of thousands of dollars less, a change that has had them rethinking their pay expectations. Companies are also moving job openings to lower-cost cities or offering them as lower-paying contractor roles, recruiters and corporate advisers say.

The push to reset employee salaries reflects a power shift in the cooling hiring market. Employers have more choice of who they can hire, and at what pay level, and are questioning whether they really need star hires when a workhorse will do . Even hourly jobs that were until recently the toughest for employers to fill are being advertised at lower pay than a year ago, as are some professional roles, according to business leaders and recruiters. undefined undefined “A lot of companies are thinking they can get away with paying a cheaper salary because they know us job seekers are desperate,” said Eric Joondeph, 31 years old, who has been looking for a senior customer-experience role for nine months. He has lowered his pay expectations by at least $20,000 a year since he started looking.

Among listings for more than 20,000 different job titles on ZipRecruiter.com this year, sectors including retail, agriculture, transportation and warehousing, manufacturing, and food all registered drops in average posted pay. The biggest was retail, where average wages advertised for new hires is down 55.9%; agriculture is down 24.5% and manufacturing, down 17.3%.

Tom Locke, a McDonald’s franchisee who owns 56 restaurants in Ohio, Pennsylvania and West Virginia, starts hourly workers at $13 an hour, but the signing bonuses and other hiring incentives he offered during the pandemic are gone. He said he is constantly asking his managers if they can reduce hourly wages to $12 an hour.

Labor expenses at Locke’s McDonald’s locations now exceed his food costs—something he said hasn’t happened in his 24 years with the company.

“I want everybody to do well in America, but there’s cost pressures,” he said. “It’s just a constant battle.”

‘Geographic arbitrage is real’

Pay resets continue to ripple through the white-collar world too. Joondeph has been looking for a senior role in customer experience since he was laid off from a customer-experience associate role.

“I’ve seen salaries slowly dropping little by little for roles I’ve been targeting,” he said.

Based in Boise, Idaho, Joondeph said he is struck by the number of jobs he has applied for that now advertise salaries not much higher than $60,000. Many used to advertise with a range between $80,000 and $100,000 in the past six to nine months, he added.

In some cases, companies are looking to attract less experienced, but still coachable, people who can be paid less than industry veterans, corporate advisers say.

Brooke Weddle, a senior partner at McKinsey & Co., said one client recently decided to stop recruiting stars, putting in place a “no more unicorns” hiring strategy, in part, to lower costs. (Unicorns are top performers with specialised skills who can command outsize salaries.)

Other businesses are considering moving jobs overseas, said Weddle, a leader in McKinsey’s group that advises on personnel issues. Instead of hiring data analysts in the U.S., for example, companies want to add people in Mexico and cheaper parts of Europe, like Poland, to save on labor costs.

“Geographic arbitrage is real,” she said.

In the U.S., some Fortune 1000 companies are moving enterprise software jobs from expensive cities such as Chicago and San Francisco to places with a lower cost of living, such as Cincinnati and St. Louis, Mo., said Keith Sims, president of Integrity Resource Management, a recruiting firm based in the Indianapolis area.

Sims, who for 25 years has helped companies recruit professionals who work with software systems like SAP and Oracle , said he hasn’t seen bosses so intent on reining in pay since the recession of 2009.

Salaries for tech jobs working with back-office and core operations business software that paid between $110,000 and $130,000 a year ago now go to less experienced hires for $85,000 to $100,000, he said. Some companies are laying off entire service areas, renaming the division and populating it with new hires at much lower compensation levels.

Hiring managers gain leverage

Overall pay for new hires in white-collar sectors increased this year, after falling in 2023, buoyed by gains in certain corners of the professional world, including law, engineering and healthcare, according to Julia Pollak , ZipRecruiter’s chief economist.

Although some tech roles that require artificial intelligence skills still offer hefty pay, many other tech jobs are advertised at lower salaries than two years ago, according to some Silicon Valley recruiters.

“Most people we interview are seeing lower salaries,” said Jill Hernstat, chief executive of Hernstat & Co., a tech recruiting firm based in the San Francisco Bay Area. “Hiring managers know they are more in control now.”

Other white-collar professions with declining new-hire salaries include finance, down 9.2% in the past year, other professional services, down 2.4% and insurance, down 1.6%, according to Gusto, a payroll and benefits software company with more than 300,000 small and midsize businesses as customers.

Pay adjustments are easing some tensions among colleagues who may have resented how much new hires were making, and the fact that tenured employees’ pay hadn’t kept up, said Tom McMullen , a senior client partner at Korn Ferry , a global organizational consulting firm.

“A lot of leaders wanted this market to cool down because they got themselves into some internal equity messes by paying through the nose for all this hot talent,” he said. “What we’re hearing is, ‘Hey, I don’t have to offer the exorbitant in-hire rates that I was offering.’”

Same work, less pay

Kate Ball was at Amazon .com for eight years, some of them as a senior recruiter, before being laid off in 2023. External recruiters have since repeatedly called her about a contract role there as a senior recruiter. Ball said the job is virtually the same as the one she had once held, but for up to 65% less pay.

Some of her former co-workers who were also laid off have taken lower-paid contract positions with Amazon: “I don’t know anyone that came back on the same package,” said Ball, 44, who has started her own HR advisory practice, Sparkle & Sass Consulting.

As Ball has applied for roles elsewhere, she has noticed some openings get reposted with lower pay ranges than were advertised weeks or months before. She applied for one job, as an employee-experience manager, went through two interview rounds, then heard nothing. A few weeks later, she saw the same job re-advertised, this time at roughly a third less than the six-figure salary she’d been quoted by the recruiter.

It is understandable, Ball said, that companies are reining in pay when they have a greater pick of job candidates than they did a couple of years ago. Still, some tactics could create ill will for employers when they have to compete more intensely for talent again.

“People will take a job now because it pays them and they’re scared, but that’s not going to last forever,” she said.

Reporting season has once again reminded investors that a strong profit does not guarantee a rising share price, and a large loss does not always trigger a sell-off. What matters most is how each result compares with expectations and, increasingly, what management says about the year ahead. During the August 2026 season, companies offering credible turnarounds or unexpectedly strong guidance were rewarded handsomely, while those flagging weaker margins, slowing demand or greater uncertainty were punished.

The following ranking draws on Morningstar’s review of 164 ASX-listed companies and measures each company’s share-price movement on the day it reported. This captures the market’s immediate response to the earnings announcement, before subsequent economic developments, dividends and company-specific news cloud the picture. Here are the five biggest winners, and the five hardest-hit losers, of the season so far.

The five winners

1. Bapcor (ASX:BAP): +41.0%

Bapcor delivered reporting season’s largest relief rally after presenting early evidence that its troubled automotive-parts business was stabilising. Although underlying revenue fell 1.8% to $1.92 billion and underlying NPAT collapsed 85% to $10.8 million, underlying EBITDA of $152.5 million exceeded guidance.

More importantly, working-capital initiatives released $68.5 million in the second half, lifting cash conversion to 109.4% and reducing net debt by 63% to $135 million. The statutory loss was $431.6 million, largely because of non-cash impairments. Investors focused on improving operational momentum, stronger liquidity and management’s expectation of modest FY27 revenue growth.

2. Zip Co (ASX:ZIP): +18.2%

Zip comfortably surpassed its FY26 targets, sending the buy-now-pay-later provider’s shares sharply higher. Transaction volume rose 23% to $16.7 billion, while cash earnings before tax, depreciation and amortisation jumped 58% to a record $268.9 million. Statutory profit climbed 46% to $116.4 million, and the cash operating margin expanded by 4.2 percentage points to 20%.

The strongest signal was guidance for FY27 cash earnings of $340 million—around 26% growth and above analysts’ forecasts. US transaction volume increased 42.5% and now represents three-quarters of group volume, offsetting weaker customer activity in Australia.

3. CSL (ASX:CSL): +17.3%

CSL’s result was hardly spectacular in isolation, but it cleared a market bar that had fallen dramatically following earlier downgrades and restructuring announcements. Underlying NPATA was US$3.1 billion, down 2% in constant-currency terms, while operating cash flow reached US$3.51 billion.

CSL maintained its full-year dividend at US$2.92 per share and completed a A$1 billion buyback. The real catalyst was FY27 guidance for approximately 5% underlying profit growth, compared with market expectations closer to 2%. After an extended period of earnings disappointments, investors interpreted the outlook as evidence that CSL’s core plasma business was approaching a sustainable recovery.

4. Judo Capital (ASX:JDO): +16.9%

Judo Capital demonstrated strong operating leverage as its specialist business-lending franchise expanded. Full-year profit before tax rose 34% to $168.1 million, while pre-provision profit increased 42%. Gross loans and advances grew 18% to $14.7 billion, reaching the top of the bank’s guidance range and comfortably exceeding broader system growth.

Deposits increased 24% to $12.2 billion, return on equity improved by 1.1 percentage points to 6.4%, and earnings per share rose 29% to 9.9 cents. Reaffirmation of the FY27 outlook gave investors confidence that loan growth could continue without sacrificing margins or credit quality.

5. Super Retail Group (ASX:SUL): +15.8%

The owner of Supercheap Auto, rebel, BCF and Macpac reported record sales of $4.2 billion, up 3.2%, despite cautious discretionary spending. Profitability went backwards: normalised profit before tax fell 7% to $306 million and normalised NPAT declined 2.8% to $226 million as transformation spending weighed on margins. Nevertheless, the result exceeded subdued expectations, online sales grew 5.3% and membership across the group’s loyalty programs reached 13.1 million. Investors were also encouraged by positive early FY27 trading, stable gross margins and continued market-share gains. A fully franked 33-cent final dividend added to the appeal.

The five losers

1. Hansen Technologies (ASX:HSN): –21.2%

Hansen’s historic result met expectations, but investors recoiled from its outlook. The utility and communications software provider achieved an underlying EBITDA margin of 31%, exceeding its 30% target, while generating strong cash flow. However, management designated FY27 an “investment and transition year”, signalling a roughly five-percentage-point margin contraction as spending on products, sales capabilities and organisational changes increased.

Revenue had already been broadly flat, leaving investors concerned that the investment program would depress earnings before new growth appeared. Leadership changes, including the chief executive’s departure, added uncertainty. Management expects revenue growth and margins above 30% to return in FY28, but the market was unwilling to wait.

2. Life360 (ASX:360): –19.4%

Life360’s headline growth was impressive: quarterly revenue rose 38% to US$159 million, subscription revenue increased 31%, and adjusted EBITDA climbed 53% to US$31.1 million. Monthly active users reached 102.4 million and paying circles grew 27% to 3.2 million. The sell-off reflected expectations rather than a collapsing business.

Net income fell 18%, the net margin contracted from 6% to 3%, hardware shipments dropped 18%, and full-year EBITDA guidance was merely maintained. After a strong valuation run, investors wanted a larger upgrade and clearer evidence that heavy investment in advertising, international expansion and artificial intelligence would generate additional earnings.

3. PEXA Group (ASX:PXA): –17.0%

PEXA reported a 7% increase in continuing-operations revenue and 12% EBITDA growth to $152 million, accompanied by a two-percentage-point margin expansion. Free cash flow increased 39%, suggesting the core Australian electronic-conveyancing platform remained highly profitable. Investors instead concentrated on management’s warning that property-transfer volumes could decline, alongside regulatory uncertainty surrounding the fees PEXA can charge.

The company is also continuing to invest heavily in its loss-making international expansion. Morningstar considered the market reaction excessive, arguing that structural transfer-volume assumptions had not materially changed, but the combination of softer near-term activity and regulatory risk overwhelmed the respectable headline numbers.

4. SEEK (ASX:SEK): –14.3%

SEEK produced solid FY26 figures, including 10% revenue growth to $1.20 billion, a 15% rise in EBITDA and 28% growth in adjusted earnings per share. It also lifted its fully franked annual dividend by 13% to a record 52 cents. Those achievements were overshadowed by falling paid job-ad volumes and cautious FY27 assumptions.

The statutory accounts included a $201 million loss from the SEEK Growth Fund and $377 million of significant items, making the headline result considerably less attractive. Investors were particularly concerned that economic weakness could limit volumes while the company continued investing in platform integration and artificial-intelligence products.

5. JB Hi-Fi (ASX:JBH): –12.3%

JB Hi-Fi’s full-year result was broadly respectable, with group sales rising 5% to $11.1 billion and underlying earnings per share increasing 6% to $4.48. The damage came from its current-trading update. Australian sales were almost flat during the June quarter and deteriorated further in July, while earnings in the core Australian electronics business fell 3.6%.

Housing-related categories were particularly weak as higher living costs and interest rates constrained household budgets. With JB Hi-Fi entering the season on a demanding valuation, an in-line historic result was not sufficient: the loss of sales momentum prompted investors to rapidly reduce their expectations for FY27.

Overall, the season showed that share prices react less to whether profits rose or fell than to the gap between results and expectations. Bapcor was rewarded for being less troubled than feared, while several fundamentally profitable companies were punished because their outlooks failed to justify elevated valuations.