Several important economic indicators released last month suggest that wage growth and a tighter labor market are just around the corner. Among the indicators:
- The Labor Department's Employment Cost Index registered its biggest increase in four years: a 0.8 percent rise in wages and salaries for the last quarter of 2005.
- The U.S. economy added almost 200,000 jobs in January, and the unemployment rate dipped to a 4½-year low of 4.7 percent, both surprisingly strong numbers.
- Average hourly earnings in January rose to $16.41. Overall, earnings rose 3.3 percent over the past 12 months.
Meanwhile, 70 percent of hiring managers responding to a Monster .com survey said that retaining employees was their primary concern going into 2006.
Employees seem to know that wage growth is heating up. Nearly two-thirds of people responding to a Salary.com survey said they're thinking about looking for a new job.
Advice: Keep a closer eye on your competitors to see if they're pushing up salary increases to help retain employees. But remember that employees stick around for plenty of nonmonetary reasons, too, such as flexible schedules, better recognition and advancement potential.
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Use formal application processes to ward off failure-to-hire/promote lawsuits
- Rethink using social media to learn about job candidates
- Tax Extensions are Still in the Works
- College degree doesn't automatically make applicant the better qualified candidate