Recruiters should learn from the way retailers price items to encourage people to apply.

There are numerous factors that contribute to the setting an hourly rate for a temporary or seasonal job. Budget, wage parity, time of shift, skills, experience, and location are just a few variables that influence the hourly rate. However, often there is little thought to what the psychological “buying triggers” might be for candidates to apply for a role.

Retailers have undertaken extensive research into how best to prompt shoppers to purchase items by choosing the optimum price-point. One tools used consistently is the .99 tactic, whereby items are priced £X.99p.

There are several rationales for the .99 price point mechanism; a theory proposed by Lee E. Hibbett, an associate professor of marketing at Freed-Hardeman University in Henderson, USA, stated that ending a price in .99 is based on the theory that, because we read from left to right, the first digit of the price resonates with us the most.

Hibbett goes on to theorise that we also tend to attempt to reduce the amount of effort expended on making product decisions, especially with lower-cost items, so we may not really process the numbers after the whole pound amount.

Applying this simple theory to how we set an hourly rate for a job would mean a higher first digit significantly improves the attractiveness of a rate, compared with those with a high pence figure. For example, increasing a rate from £8.96 per hour to £9.00 per hour may not have a significant impact on payroll, but it could have a significant impact on the speed at which the role is filled.

It is not just rate increases where this logic could be applied. If we take Hibbett’s rationale as true, there is little to be gained from pricing an hourly rate marginally above a whole number, as it is suggested that the pence figure will be ignored. Therefore, reducing wage rates to a whole number may also produce savings whilst not impacting the attractiveness of the hourly rate.

In general terms, price conscious consumers have been conditioned to think that they are getting a bargain when something is priced at .99. This is exactly the opposite of how hirers want a job rate to resonate with potential candidates.

A study by Eric Anderson, professor of marketing at Northwestern University’s Kellogg School of Management, and Duncan Simester professor of management science at M.I.T.’s Sloan School of Management, undertook a study with a clothing catalogue. They requested the catalogue increase the value of an item from $34 to $39 to see how this impacted sales. It would be sensible to predict that sales decreased inline with the increase of cost yet demand actually increased.

Here at Flexy we undertake extensive research into identifying the optimum hourly rate for a temporary or seasonal job role. Within our platform we provide hirers with an easy to use thermometer which highlights the optimum hourly rate based on hundreds of data points – not least avoiding .99 hourly rates.

For more information, contact us today.


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