ADP: Job switchers gained wages faster than job holders last quarter
- ADP's "Workforce Vitality Index" shows that job switchers experienced less wage growth in Q4 2017 (3.3%) than those who stayed onboard (4.3%). Job holders earned $10/hr more than job switchers during the quarter. However, ADP's analysis of the same group of workers over the past year found that wages for full-time workers who switched jobs grew by 4.9% on average year-over-year, while wage growth for job holders was 4.3% over that same period.
- Wage growth overall has been stagnant, according to the report, but employers were willing to pay premium salaries for talent in IT and professional services that stayed put. On the other hand, wage growth was highest for job switchers in the leisure and hospitality industries (6.3%) (though information services wasn't far behind, at 6.2% growth).
- The report also looked at yearly employment growth by industry, with the greatest increases in resources and mining (11.1%), construction (3.1%) and professional and business services (2.9%).
Wages have been stagnant during the past few years. A 2017 Aon report correctly predicted an overall growth rate of about 3%, despite a strong economy and a record low unemployment rate of 4.1%.
But plagued by an ongoing skills gap, employers across industries might be forced to raise wages to attract the talent they need. Tech companies might need to raise salaries by as much as 20% for highly skilled workers. And retailers like Target are increasing wages to attract customer-oriented workers and curb the industry's high turnover rate.
Some companies plan to use part of their savings from the new tax law to raise their minimum wage, increase 401k contributions and offer workers one-time bonuses. But unless more companies agree to do the same, upticks in wages are unlikely from that act alone.