Workers of varying earning power are continuing to benefit from today's tight labor market. A report released by the New York Fed indicates lower-income workers are quitting their jobs for new ones at record-high rates not seen since 2014.
The Wall Street Journal reports that among 1,300 workers earning $60,000 or less, 12% changed jobs in April, May, June or July of this year. That's up from 8% of job-movers during the same four-month period in 2018.
For job markets experts, the trend has long been in the making.
"The fact that low income workers are job-hopping at high rates is unsurprising given there are so many opportunities for these workers to find other roles," Michelle Armer, Chief People Officer at CareerBuilder, tells CNBC Make It. She cites a study that projects low-wage occupations will add nearly 3.1 million jobs through 2023 — outpacing the growth of future middle-wage jobs, even.
The high volume of opportunity means workers have options to interview around and compare offers for the best pay, benefits and even non-wage perks like educational opportunities and a shorter commute, Armer says.
Faster wage growth, particularly among jobs that tend to pay $60,000 or less, has also led to more activity on jobs sites, says Glassdoor senior economist Daniel Zhao .
"On Glassdoor, we've seen the fastest wage growth for these lower-wage jobs, and that's across a wide variety of jobs, from cashiers to warehouse workers," Zhao says. "It also affects jobs that are at the upper end of that wage spectrum, like technicians or truck drivers. This wage growth is really a sign that the longest economic expansion on record is benefiting workers across the whole spectrum."
Not only are more workers job-hunting, but they're also seeing more success in landing multiple offers. According to the Fed survey, about 4% of lower-income workers received three job offers this summer, up from 1.4% of workers who were as in-demand during the same period last year.
This bargaining power puts job candidates in the driver's seat for negotiations, Zhao says, and employers would do well to expect these conversations and come to the table prepared. He suggests job candidates use salary comparison sites, in addition to competing offers, to leverage the best pay, benefits and total compensation package. According to the Fed report, the average annual salary of job offers was $54,943 in July, up from $52,590 last summer.
Workers this year were more likely to report feeling less satisfied with their opportunities for promotions at their current job compared to last year. According to Ronni Zehavi, CEO of HR tech platform Hibob, lack of career advancement could drive more workers to quit than a desire for higher pay.
"We found that 56% of employees rank opportunities for growth as more important than salary, underscored by the fact that only 25% of employees left their previous role because they felt underpaid," Zehavi says.
While the news of the tight labor market might seem to be advantageous only to those willing to change jobs, it could also encourage employers to bolster their employee engagement and satisfaction efforts. In turn, this could signal a good time for workers to angle for a raise, promotion or other perks, like a flexible schedule.
"With so many HR managers struggling to find the right candidates to fill open jobs, it is a good time for employees to negotiate raises or even non-salary benefits that would make them happier at work," Armer says. "The average financial cost of a bad hire is more than $18,700, and bad hires also impact productivity and morale, so retaining strong talent helps companies with overall company culture and reduces costs associated with bad hires and other recruitment efforts."
Indeed, the trend could also lead companies to invest more strategically in making a better hire the next time around.
"Initially, this might seem like a costly trend for employers, but it actually can be a positive for them too," Zhao says. "As job seekers find a better fit for them, that often means a better fit for the company as well. You have workers who are more passionate about their company, who feel more attuned to their company culture and teams, and that can result in more productive workers, which can ultimately help the business's bottom line."
Whether you're negotiating compensation for a current gig or a new one, consider these three tips from an auctioneer to hit your target.
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