Wage growth in small businesses remains strong

Wage growth in small businesses remains strong

The pace of small-business wage increases in the US continues to escalate, with August seeing average hourly earnings growth of 5.18% compared to 5.03% in July 2022, according to a recent report.
Watch Paychex and IHS Markit Recruitment for Small Businesses Report. At $30.71 an hour, average hourly earnings in small businesses have increased by $1.51 over the past 12 months.

said Martin Moshe, CEO of Paychex, a payroll software and human resources services company based in Rochester, New York.

The report is based on payroll data for nearly 350,000 Paychex customers with fewer than 50 employees and was a joint venture with international analytics firm IHS Markit, part of S&P Global.

Differences by region and industry

Regionally, the August report showed that the South led in small business hourly earnings growth over the past 12 months, with an average increase of 5.53%. The Northeast was the only region with hourly earnings growth below 5 percent (4.58 percent).

industry wages

Other services (excluding general administration) led the annual inter-industry hourly earnings growth of 7.48% in August. The one- and three-month annual growth rates were higher at 8.07% and 7.84%, respectively.

In contrast, hourly earnings growth in leisure and hospitality slowed for the seventh consecutive month to 6.37%, although the decline from July to August was not as sharp as in previous months.

Small businesses stay on track

Despite recession fears amid resilient inflation, the labor market remains tight, prompting small businesses in the United States to avoid salary cuts and layoffs.

Key Financial Well-Being Index The survey of 500 US business leaders, conducted July 7-20, found that large companies with 500 to 10,000 employees were more likely to say they were growing (61 percent of respondents), compared to 46 percent It is a small business with less than 500 employees. However, nearly half (49 percent) of small businesses consider themselves stable compared to 36 percent of large companies.

“Small businesses have learned a lot from the 2008 recession, and they are learning a lot that they can make adjustments that will reduce the impact on salaries or employees during future periods of economic stress,” said Amy Friedrich, president of American Insurance Solutions in Principal, Des Moines. , provider of financial benefits in Iowa.

“Small companies are dedicated to their employees,” Friedrich said. “We’ve seen that during the pandemic, and I think we’ll see the same creativity and resilience if pressures escalate in the near term.”

Satisfaction with annual earnings

In other recent research on economics and compensation, the median “holding pay” — the lowest paid respondent willing to accept a new job — continued its upward annual trend and reached $72,873 in July 2022, up from $68,954 the year before, according to the latest Federal Reserve Bank of New York
Labor market survey from the Saudi Council of Engineersreleased on August 22.

The average annual full-time offer wage received in the past four months rose to $60,764, up from $58,469 in July 2021.

Every four months, the 1,000 Consumer Expectations Survey (SCE) panel members are asked to obtain details about their current or recent job as part of the ongoing research.

Satisfaction with pay compensation deteriorated in respondents’ current jobs, with 56.9 percent of respondents saying they were satisfied with their current pay, down from 58.2 percent in the previous year.

Meanwhile, satisfaction with non-wage benefits in respondents’ current jobs improved to 63.2 percent, up slightly from 62.6 a year earlier.

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