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Why Low Unemployment Doesn’t Mean Higher Salaries

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Month after month, Department of Labor reports continue to indicate lower unemployment figures. But that may not mean higher salaries. Economic growth and consumer spending are still stagnant, and many Americans continue to experience flat or declining wages. A college graduate in 2017 expects to earn the same wages as a graduate in 2007, according to a study by the Economic Policy Institute.

But what does that mean for government workers with an active federal security clearance? A security clearance used to be referred to as a golden ticket, garnering higher wages than a similar position without a clearance. But according to the findings of the recent ClearanceJobs Compensation Survey, total compensation for all surveyed security-cleared professionals worldwide is $86,902. Average total compensation is down 1.27% overall since 2014, the last time ClearanceJobs conducted a salary survey.

“These numbers really highlight the challenges facing recruiters and hiring managers in the cleared space,” said Evan Lesser, founder and president of ClearanceJobs.com. “We have a very strong commercial sector and a still struggling defense sector. While there are still high-paying jobs, the competition for those professionals is incredibly strong.

Two market trends support salary stagnation in the defense market today: the continued prevalence of Lowest Price Technically Acceptable contract awards, and a shift in the demographic makeup of the cleared candidate workforce. In 2013 then Director of National Intelligence James Clapper called on the intelligence community to reduce the number of higher level security clearances, and that was reflected in survey responses. Professionals with a TS or higher clearance made up 46 percent of survey respondents in 2017—down 5 percent since last surveyed in 2014. Secret candidates made up nearly 39 percent of the respondents in 2017, up 1 percent since 2014.

Lowest Price, Lowest Acceptable Work?

Over the past two years, government officials have argued they’re reducing the use of LPTA contracts. But as recently as August 2016, the Department of Defense moved forward with its 10-year, $17.5 billion Encore III IT services contract using an LPTA model, and above formal protests from several contractors.

Why is LPTA a problem? It forces the government to use the lowest-priced contract (assuming it meets the minimum technical requirements). For companies winning those contracts, there simply isn’t the margin to pay for and hire IT talent at competitive rates. That’s even causing some contractors to stop bidding on LPTA contracts.

“For us, specifically, we created a 2015 initiative to move from LPTA contracts that require lots of resources to capture and even more to staff low-volume positions on impossible salaries that yield little return,” said Maria Whitney, recruiting manager at Smartronix. “In terms of overcoming these trends, we revamped our approach to candidates and don’t limit our opportunities in terms of discussing just salary. We reference our salary as part of our total compensation that encompasses our benefits package including professional development and formal education policies.”

This corresponds with market trends seen on ClearanceJobs.com, as more companies are offering signing bonuses, relocation expenses, and perks from telework to unlimited leave.

For the Love of Work

With continued market uncertainty, processing delays and flat compensation, you might think the cleared workforce would come to work with a chip on their shoulder. That’s hardly the case—64 percent of surveyed cleared professionals indicated they are “somewhat” or “very satisfied” with their current jobs. That’s higher than the roughly 50 percent satisfaction score the average American gives their current job.

That doesn’t mean they’re not willing to make a move—53 percent of security-cleared professionals surveyed said they were “likely” or “very likely” to change jobs in the coming year. Unsurprisingly, respondents whose salaries were in the lowest 20 percent were the most likely to consider switching jobs. The difference in the average base salary between those “very likely” and those “not at all likely” to change jobs was 10 percent.

Read more survey results in the ClearanceJobs comprehensive Salary Report.

Lindy Kyzer is the editor of ClearanceJobs.com and a former Defense Department employee.

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