Will You Be Paying Higher Wages This Year?
Will you be paying higher wages this year? Depending on how you read the statistics for unemployment, there are now 1.5 unemployed job seekers for every posted job opening in America, says Bloomberg Business. That fact, along with the reality that not every job seeker is actually qualified, adds up to an increasingly competitive labor market.
The general unemployment rate has been cited at around 4.9 percent. Even the percentage of part-time employees who want a full-time job and discouraged people who’ve disengaged from job searching has fallen from 17.1 percent in 2009 to 9.9 currently. Many employers who used to refuse to hire unemployed candidates have now reconsidered their stance.
As the economy reaches full employment and the demand for workers outpaces the availability of candidates, claim the experts, employers will be feeling the pressure to pay higher wages. Of course, since higher wages eat into profits, many companies will be reluctant to increase pay too much until forced to do so. But what’s a reasonable increase? Some company leaders tend to think that 3 percent is a fair number for 2016, says Bloomberg, quoting St. Louis Fed President James Bullard.
In fact, according to the LA Times, a variety of wage and salary statistics—from payroll processors, private analysts, and U.S. Federal Reserve researchers—indicate that the underlying rate of pay increase for workers has been picking up much more in the last year than commonly thought. A study of wages by the Federal Reserve Bank of Atlanta found that median wage and salary growth, after hovering at about a 2% annual pace from 2011 through June 2014, has since risen to more than 3%.
But will you be paying higher wages this year? Not necessarily, cautions Scott Kuethen, our CEO. Although the labor market certainly has gotten more competitive, the economy hasn’t heated up to the point that wages are skyrocketing. However, if you’re trying to hire someone who is already employed with another company, the candidate isn’t likely to move for the same salary he or she is currently making. But always keep in mind, especially with Millennials, that you can offer several forms of compensation that are just as desirable as actual money, such as flexible work hours, work from home options, appealing dress codes, a better title, the promise of career growth and/or development, and better benefits.
Remember that we can share the latest market rate salary information for your open position. Click here or call (714) 993-1900 to request an employee or discuss a workforce management issue.