Companies are increasing salary offerings and spending more on recruitment in their bid to attract and retain talent, according to The Wall Street Journal (subscription).
What’s happening: As the economy has rebounded from the pandemic slump, large numbers of people are quitting their jobs in a wave some are calling “The Great Resignation.”
- “Workers handed in a seasonally adjusted 4.3 million resignations in August, a record since tracking began in 2000 that came after months of elevated departures, according to the Bureau of Labor Statistics. Jobless claims last week dropped to the lowest level since March 2020.”
The response: Companies plan to continue hiring and increase nonwage compensation, such as health care benefits, according to a recent survey by Duke University’s Fuqua School of Business and the Federal Reserve Banks of Atlanta and Richmond. Meanwhile, “[w]age bills are forecast to rise by 6.9% this year and next, while wages for new hires are set to rise by about 10%.”
- “MillerKnoll, the Zeeland, Mich.–based manufacturer of office chairs and other furnishings, has increased wages for most of its factory workers in North America over the past few months, CFO Jeffrey Stutz said.”
What to expect: Higher salaries are likely here to stay, said John Graham, founder of the CFO survey and finance professor at the Fuqua School of Business. “And they absolutely increase costs for the firms, putting pressure on the firm to increase prices of their own products and thus increasing inflation.”