American workers who changed jobs in March saw their salaries shoot up, a sign of how much companies are putting in extra effort to attract employees at a time when the labor market is offering millions of jobs for whoever is looking for a job.
Last month, employees who moved into new roles saw their earnings jump 10 percent, the second straight increase. In February, pay for these workers went up by nearly 8 percent. Meanwhile, for workers who stayed in their current positions, wage gains were a little over 5 percent. This was the same as the previous month, after a steady slowdown in earning increases, according to data from the ADP Research Institute.
The sectors that saw increase in pay for workers included construction and manufacturing, according to ADP's chief economist, Nela Richardson.
Overall, private employers showed that they were still recruiting as they added 184,000 new jobs in March, in what was the biggest increase since July. The previous month's job numbers that initially had come in at 140,000 were revised up by 15,000.
"March was surprising not just for the pay gains, but the sectors that recorded them. The three biggest increases for job-changers were in construction, financial services, and manufacturing," Richardson said in a statement.
The labor market continued to show strength even amid tight financial conditions augmented by worker surveys that show employees feeling positive about jobs.
"Strong growth of 184,000 jobs, strong pay growth per job changers, and these sentiment indicators both in the manufacturing survey and our own worker sentiment and that is still seeing a pretty solid, maybe even good to great, jobs market for 2024," Richardson said at a later press conference attended by Newsweek.
The ADP data echoed other recent trends that suggest that employers are still having to work harder at recruiting. On Tuesday, a survey from ZipRecruiter revealed that companies are being quite pro-active in retaining their employees, offering incentives to keep them at their jobs.
Job gains in March were particularly noted in the services sector, which added 142,000 jobs helped especially by the leisure and hospitality industry—the spark of the post-COVID economic recovery—that saw 63,000 new jobs.
In geographic terms, the South led the way, with 91,000 jobs added in March, ADP data showed.
One notable negative trend seen last month was that small businesses with about 20 to 49 employees lost 11,000 jobs. But Richardson suggested this could also be part of the competitive labor market in favor of workers in the current economy.
"Overall large establishments are still hiring and small firms have to compete, with both the benefits and the wages that large establishment are able to offer," she said. "So sometimes when I see a decline in small businesses compared to the overall strength of the labor market, I wonder is it because small firms aren't hiring or small firms lost in this talent war this month."
Workers are attracted to firms that can offer more and with those changing jobs able to secure higher pay gains, they may be switching from smaller companies to larger businesses to chase more money.
"That competitiveness of the labor market is more impactful for smaller firms," Richardson said. "It's harder to compete."
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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Omar Mohammed is a Newsweek reporter based in the Greater Boston area. His focus is reporting on the Economy and ... Read more
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