Since 2009, barely existent wage growth has kept families squeezed and many employees from seriously job hunting. But that's starting to change. Workers got the first signs of good news in November when the October jobs report showed the largest increase in hourly earnings since the Great Recession -- 2.5 percent.
Now a new report from recruitment firm Korn Ferry offers employees more reason for optimism, indicating that across the world this healthy increase in wages should continue in 2016. The group's Salary Forecast, which looks at real wages (i.e average increases in earnings adjusted for inflation), predicts that American employees will see their incomes grow by 2.7 percent this year. That's the biggest jump in three years.
The numbers are similarly cheery for workers in most other regions (excepting Latin American where high inflation will probably mean employees, on average, will receive a pay cut in real terms this year). Asia is the most buoyant labor market with a 6.4 percent rise in wages expected for 2016. Most of Europe should see similar wage growth to the U.S.
How does this impact employers?
This news is sure to put a smile on the faces of frontline employees, but what are the implications of this warming labor market for employers?Fast Company spoke to a number of HR experts to find out, and the answer overall seems to be: it's time to get serious about retention.
"When talent is more expensive, companies need to focus on their retention strategies because the cost of replacement jumps," Paul McDonald, senior executive director for international staffing firm Robert Half International, explained to writer Gwen Moran.
What should those retention strategies look like? That depends very much on what your employees want, the article notes. There is no one-size fits all way to keep workers happy. And simply assuming you know what your people most desire is a likely route to miscommunication and wasted resources. The commonsense solution is to ask them what they value and, if at all possible, give it to them.
"McDonald recommends quarterly management check-ins to monitor the status of the most in-demand skill sets to ensure that benefits are up to snuff compared to competitors. He's an advocate of awarding spot bonuses or perks for exceptional performance. It's also critical to show in-demand employees that there is a path to advancement, so a renewed focus on training and developing candidates for promotions internally can help retention," reports Moran.
Are you doing enough to keep your top talent as the labor market heats up?