The US Dept. of Labor this week announced that the number of US workers quitting their jobs rose 3.1% in January to 3.26 million. This is the highest level since January 2001, and yet another indicator of the strength of the job market, as fear of job loss is replaced by willingness to take risk by workers seeing higher wages and more opportunities in the job market.
The labor market strength is also reflected in the 2017 increase in compensation costs for private industry worker, which boosted 2.6 percent over 2016, with wages and salaries up 2.8 percent for the current 12-month period. The US unemployment rate remains at 4.1 percent, and the latest new jobs created report for January beat expectations by 20,000, hitting 200,000 total. January hourly earnings averages increased $0.09. Tracking local and regional wage trends in this market is critical both for recruiting and for even more important retention.
Lagging the market creates vulnerability to loss and difficulty in attracting workers. Matching the market is a solid retention plan, but can create difficulty in attracting already employed workers from competitive firms. Leading the market for pay is hard to justify – until one reviews lost productivity and outputs from worker and skill shortage and the cost of turnover in all its components.