The latest Small Business Employment Watch Report shows a tight job market has positively affected wage growth in October. The annualized growth for hourly earnings has reached 3% and the annualized growth of weekly earnings touched 3.36% in October 2019.
Wage data is a critical economic indicator to understand the welfare of workers and their job quality. Being aware of the latest wage gains can help you offer competitive salary packages to your employees.
October 2019 Small Business Employment Statistics
Data scientists at Paychex, with input and consultation from IHS Markit, published the Paychex | IHS Markit Small Business Employment Watch. This report offers an insight into small business wage data.
Small Businesses Wage Data
Employees working with small businesses now earn $27.51 per hour according to October Wage Data of the Small Business Employment Report. The current hourly earnings figure is $.80 more than the last month’s annualized earning per hour.
Employees at small businesses achieved a 3% annualized growth for hourly earnings in October.
Subsequently, their annualized weekly earnings also increased in the same month.
Wage Gains By Region
According to the report, all regions in the United States witnessed growth is wages in October.
With 3.45%, the West region was the biggest gainer in hourly earnings growth. And the South region registered the lowest growth (2.43%) among all regions.
If we talk about region-wise weekly earning gains, the West region is winners here also. And the Midwest region registered the lowest annualized growth for weekly earnings among all regions.
Wage Gains by Industry
Leisure and hospitality registered the highest annualized growth (5%) for hourly earnings in October, while education and health services ranked last (1.26 percent hourly earnings growth) among industry sectors.
If we look at weekly earnings growth industry-wise, we find that leisure and hospitality win here too with 5.00% growth.
And the education and health services registered the lowest growth (1.26%) for weekly earnings among industry sectors.
How It Will Impact Your Small Business
It goes without saying that skilled employees are growth drivers for small businesses.
As a small business owner, you should not only hire top talents but also try to retain good employees.
Keeping abreast of the latest wage gains in line with your industry can help you better revise the salaries of your employees and offer competitive packages to new joiners.
Needless to say, you cannot expect your employees to give their hundred percent and stay loyal to your business if they are underpaid.
Frank Fiorille, Vice President of Risk, Compliance, and Data Analytics, Paychex, says, ”This month’s results clearly show the impact of the tight labor market. Job openings are plentiful, but there’s a limited number of candidates to fill those positions,”
“If you’re a small business owner looking to hire, you should not only be thinking about competitive wages for your industry but also potential benefits you can offer so that your business stands out as an employer of choice,” He continued.
With the growing demand for skilled workers, subsequently the shortage of skilled talents, wages will continue to rise.
Martin Mucci, Paychex president and CEO, said, ”The recruitment and retention challenges presented by this tight labor market are becoming more noticeably reflected in employees’ paychecks,”
“We anticipate wage growth will continue as employers work to attract and keep top talent,” He added.