While a tight job market may benefit job seekers, it is crushing employers, including small businesses.
Despite recent headlines that US worker productivity has dropped sharply in 2022 and tech, media and e-commerce giants are losing workers in large-scale layoffs, the overall job market remains robust. If all job seekers got a job today, there would still be millions of jobs available, according to the latest data from the Bureau of Labor Statistics and the Chamber of Commerce. The result is an economy where workers still seem to have the upper hand: ready to leave their jobs and look for new ones at any moment, knowing that the opportunities far outnumber the applicants.
More than 6 million American small businesses in 2021 had at least one employee, according to the Small Business Administration. Since 1995, 62% of new jobs have come from small businesses. How small businesses treat their employees is more important than ever, as any drop in worker satisfaction could lead to another resignation letter. Naturally, pay is among the top priorities for job seekers, whether they want to keep up with inflationary increases or simply see an opportunity to leverage a pay raise, so the size of the raises companies give to their employees is crucial.
Swyft Filings gathered data from the National Federation of Independent Business, Paychex and IHS Markit to determine how small businesses handle wage increases in this job market. NFIB data comes from surveys of small business owners, while Paychex and IHS Markit data comes from aggregated salary information from Paychex customers.
Read on to find out how small businesses are adapting their payroll strategies to fit the current job market.