The new year is finally here and we all started developing an open mind for new opportunities and challenges. One of those challenges being an increase of wage growth for workers. This might sound as positive news for workers, but if you are an employer in Human Resources, this might be a huge problem. The Bureau of Labor Statistics (BLS) reported Jan. 6 that in 2016, US hourly wage went up by $0.10 cents compared to November 2016 and by 2.9% over the year. The reason for the wage increase deals with the fact that the labor market has tightened as more people have found jobs.
For employers, increasing pay was the only way to keep their skilled employers. If the minimum wage continues to increase, the competition to keep employees would be much more serious. HR employers might find it hard to find and keep workers, as well as to control costs. Many employers are trying a different approach by increasing their benefits, for instance insurance and retirement to insure their employees are happy and are willing to continue working in their company. Many workers find flexibility and related benefits more valuable than a salary that is at the top of the pay scale.
As 2017 continues, economist predict that the average wage will continue increasing. John Challenger, Chief Executive Officer of Challenger, said that we’ve hit the time in the employment cycle where demand for workers outstrips supply. All there is left to do is to hope that the Trump administration efficiently handles the situation, so everyone can benefit from the increase of wage.