According to the Bureau of Labor Statistics (BLS), the American economy added 142,000 jobs in September 2015, below economist predicted gains of 203,000 jobs. The unemployment rate remained unchanged at 5.1 percent. Average hourly earnings declined by 1 cent to $25.09 after a 9-cent gain in the previous month.
Among the industries adding jobs, healthcare gained the most with 34,000 jobs added, followed by professional and businesses services with 31,000 jobs added. Retail trade employment also gained 24,000 jobs and food services and drinking places added 21,000 jobs. Meanwhile, mining continued its downward trend, losing 10,000 jobs, for a total of 102,000 fewer jobs than its December 2014 peak. Other industries, including manufacturing, construction, financial activities, and government showed relatively flat gains for the month.
3% Raises in 2016
According to a recent survey by Towers Watson, pay raises for American employees are expected to remain steady in 2016, with 98 percent of respondents projecting average salary increases of 3.0 percent for exempt non-management employees in 2016. This is the same increase that employees received in both 2014 and 2015.
“To a large extent, 3 percent pay raises have become the new norm in corporate America. We really haven’t seen variation from this level for many years. While most organizations are finding the talent they need at current salary levels, we are seeing more employers prioritizing how their salary budgets are being spent, especially in light of their ongoing difficulty in attracting and retaining top performers or employees with critical skills.” ~Sandra McLellan, North America Practice Leader at Towers Watson
The survey also found that executives and management employees could expect increases that average 3.1 percent in 2016. High performers will have slightly higher raises, with an average salary increase of 4.6 percent.
However, the survey notes that more employees are becoming eligible to receive annual and short-term incentives, with 87 percent of exempt employees projected to receive a bonus this year, up from 81 percent in 2014. Research also indicates that pay is no longer the only driver of retention, with the value of total package including compensation, benefits, and non-monetary rewards making a difference. Opportunities for career development, learning, and challenging work are considered top drivers of retention.
In a recent report by CNN Money, 31 percent of workers in the U.S. consider themselves to be “free agents”. These “free agents” consist of contractors, small business owners, temporary workers, freelancers, and moonlighters. Most of them say they entered into this type of work arrangement willingly, with only 10 percent saying they were forced into it due to economic conditions.
According to the survey, free agents are more satisfied with their work than traditional workers in most areas, including work-life balance, advancement opportunities, skills development, and nature of work. A study by the U.S. Government Accountability Office (GAO) earlier in the year revealed that 85 percent of independent contractors “appeared content with their employment type” while 57 percent were “very satisfied” with their jobs, exceeding the rate of those who held traditional full-time employment at 45 percent.
While free agents work in a range of industries, the most prevalent are in IT, finance and accounting, engineering, and education. The survey also found that 36 percent of Baby Boomers identified as free agents compared to just 26 percent of Millennials.
A separate report by NewsWeek finds that free agents have the capacity to earn twice as much as what they can working in a traditional employee work relationship.
Temp Work Provides Insight Into Candidate Fit
According to a new survey by Accountemps, 34 percent of CFOs say that having a candidate work on a temporary basis provides the greatest insight into whether he or she is a good fit with the company’s culture.
“Applicants who mesh well with the organization’s employees and work environments assimilate faster and are more likely to stay longer term. Bringing in professionals on a temporary basis while you evaluate them for full-time roles can prevent costly hiring mistakes.” ~Bill Driscoll, District President at Accountemps
CFOS also cited asking open-ended interview questions and checking references as effective ways to determine someone’s potential fit with the work environment.
Q4 Hiring Plans
A recent survey released by CareerBuilder found that employers expect full-time, permanent hiring to be at its most robust since 2006 for the fourth quarter of 2015. The survey revealed that 34 percent of employers plan to add full-time, permanent employees in the fourth quarter of the year. Over the third quarter, 39 percent of employers added full-time employees.
Seasonal hiring is also expected to increase compared to 2014 with 33 percent of employers expecting to hire seasonal employees in Q4, up from 26 percent last year. Additionally, 57 percent plan to transition some seasonal staff into full-time, permanent roles.
Also, 37 percent of employers say that they will increase pay for their seasonal staff by approximately 10 percentage points up from last year. The top seasonal positions that companies are hiring for in the fourth quarter include customer service, administrative/clerical service, hosting/greeting, shipping/deliver, and accounting/finance.
“Employer confidence is widespread and the strongest we’ve seen since 2006. Hiring will continue on an upward trajectory for both permanent and seasonal positions, with pay expected to improve over last year as companies keep pace with minimum wage hikes and compete more aggressively for elusive talent.” ~Matt Ferguson, CEO of CareerBuilder
“Disappointing across the board. This is not what the markets were looking for, this is not what pretty much anybody expected.” ~Brad McMillan, Chief Investment Officer at Commonwealth Financial Network.