As Retailers Prepare for Holiday Hires, Pay Growth is on the Rise

Wages are on the rise for jobs impacted by seasonal hiring while U.S. wage growth is up two percent – with Boston, San Francisco and Washington, D.C., leading the way. Let’s take an up-close look salary trends.

October 3, 2017 – According to jobs website Glassdoor, the annual median base pay in the U.S. grew two percent year-over-year last month to $51,556. The pay growth ended a six-month stretch of deceleration. The Glassdoor Local Pay Reports show pay growth ticked up slightly from a revised 1.7 percent growth last month, ending a six-month stretch of deceleration. Pay growth previously peaked in January at a revised 3.4 percent.

The Glassdoor survey provides a view into the country’s wage picture with salary estimates for nearly 85 job titles and year-over-year pay growth trends in the U.S. The reports include details on 10 major metropolitan areas: AtlantaBostonChicagoHoustonLos AngelesNew York CityPhiladelphiaSan FranciscoSeattle and Washington, D.C.

“After six consecutive months of falling pay growth, workers got some positive news in August with a slight uptick in average wage growth to two percent,” said Dr. Andrew Chamberlain, chief economist at Mill Valley, CA-based Glassdoor. “We will be watching eagerly to see if this starts a trend in the opposite direction. We are also closely watching retail, and while the holiday season is still months away, retailers are already making preparations to fill short-term positions in time for the holiday buying rush. Jobs typically associated with this seasonal swing in hiring, including cashiers and warehouse jobs, are seeing above-average pay growth.”

Wages Up for Retail Positions as Seasonal Hiring Begins

Wage growth continues for jobs in retail, as well as positions that directly support retailers. There are more than 614,000 open jobs in the retail industry on Glassdoor. Cashiers (up 3.7 percent to $27,701) and store managers (up 3.2 percent to $48,422), who handle the front end, and truck drivers (up 5.7 percent to $52,079), who haul consumer goods on the back end, saw above-average pay growth in August. Pay growth was also up for warehouse associates (by two percent to $40,784) who pull orders, handle packages and sort goods to ship for online retailers.

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Attorney Wage Growth Declines; Automation Affects Loan Officers

Among the jobs experiencing the biggest declines in year-over-year pay growth in August, attorneys topped the list (down three percent to $92,241).

“There has been a huge oversupply of law school graduates in recent years compared to how many traditional positions are open, and a lot of new lawyers are not finding jobs with law firms,” said Dr. Chamberlain. “Instead many are heading into more general business management, roles with nonprofits, journalism, government or public policy.”

Loan officers (down one percent to $44,832) and operations analysts (down 0.1 percent to $53,147) continued to experience a decline in wage growth this month; these are jobs for which automation and software is replacing the need for human labor.

For a list of jobs with the biggest pay declines, visit the Glassdoor Economic Research blog.

Fastest Pay Growth in Boston, San Francisco

Among the 10 metropolitan areas tracked, wage growth was fastest in Boston (up 2.4 percent to $58,731), San Francisco (up 2.4 percent to $68,164), and Washington, D.C., (up 2.3 percent to $59,141). In Houston, wage growth was slowest, and in Chicago, and Atlanta, pay growth lagged behind the U.S. average.

Looking Ahead

Although it is still early, future salary growth might well be helped by the growing number of states and municipalities that have enacted or are considering legislation that makes it illegal for employers to ask job applicants about their pay at past jobs. Delaware, Massachusetts and Oregon have already passed such laws. Last month, the California legislature approved a bill banning employers from asking about previous salary, but it remains uncertain whether Gov. Jerry Brown will sign it.

Twenty five states have looked into such bills this year, according to the Society for Human Resource Management. Such legislation was passed but vetoed in New Jersey and Illinois, the association said.

Among the more prominent cities to recently prohibit questions about past salary are New York City and San Francisco, which signed bills into law in June and August respectively

Expectations of wage increases are higher for the latest quarter, according to a new Business Conditions Survey released by the National Association for Business Economics. The report found 47 percent believe wages will rise over the next three months. That’s up from 44 percent who expressed that view in a similar survey released during the second quarter.

Increasing Demand for Talent Spurs Steady Wage Growth
The U.S. labor market posted steady growth in wages in the second quarter, according to the newly released ADP Workforce Vitality Report. Overall, wage growth increased by 2.3 percent year over year across all industries in the second quarter of 2017.

And when asked whether they had raised wages and salaries last quarter, 47 percent said they did. The survey also asked about hiring difficulty, and slightly more than one third of panelists reported that their firms faced some difficulty over the last three months. On the other hand, 27 percent reported no difficulties. The remainder either did not hire or were unable to answer for their firms. Common approaches for recruiting new employees for those firms that faced hiring problems included increase salary offers or a focus on training internal candidates.

“But employment growth remains positive,” said National Association for Business Economics’ survey chair Emily Kolinsky Morris, “and panelists do report some firming in capital spending, though not necessarily related to policy developments, as the vast majority of respondents continues to cite no change in hiring or investment decisions in the wake of post-election developments. Pricing power — or lack of it — and labor costs are generating some headwinds for a significant number of firms.”

Wages Hold Steady, Talent Rewarded

According to some reports, however, wages are expected to slow. A new forecast by the Hay Group division of Korn Ferry revealed that in the U.S., a three percent salary increase is predicted for this year. Adjusted for the 1.1 percent inflation rate, the real wage increase is 1.9 percent.

According to a survey released by Willis Towers Watsonpay raises for U.S. employees are expected to hold steady at three percent. The survey also found that employers will continue to reward their best performers with significantly larger pay raises as they look for ways to retain their top talent and strengthen existing pay-for-performance cultures.

“Given the continued low rates of inflation and the ongoing pressure on profit margins, employers remain cautious when it comes to budgeting salary increases,” said Laura Sejen, managing director, rewards, at Willis Towers Watson. “While most companies are feeling little pressure to increase budgets relative to what we’ve seen in recent years, many are starting to question how those budgets are spent and whether their conventional approaches to salary planning are delivering a good return on that three percent investment.”

According to a CareerBuilder study, which polled human resource managers, 70 percent said their companies will have to start paying workers higher wages because the market has become increasingly competitive for the skills and labor needed. The report also found that more than half of employers will raise wages for current employees, while two in five will offer higher starting salaries on job offers in the second half of the year.

Among all employers (hiring managers and HR managers), 39 percent reported they will offer higher starting salaries for new employees over the next six months; 20 percent of all employers plan to increase starting salaries on job offers by five percent or more. More than half (53 percent) of employers plan to increase compensation levels for current employees before the year’s end and, similar to salaries on new job offers, 21 percent said the compensation increase for existing staff will likely be five percent or more.

“Where we’ll likely see a more noteworthy change is in the area of wages,” said Matt Ferguson, CEO of CareerBuilder. “The number of hires made each month continues to lag the number of jobs posted for key functions within organizations, and the majority of employers feel they will now have to pay workers more to attract and retain them because the talent supply is not keeping up with demand.”

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media

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