Employers have recently been having a hard time recruiting applicants with the right qualifications, but according to The Wall Street Journal, there’s a bright spot: Workers’ pay packages are growing.
While salary has been growing modestly, the publication reports that other “fringe benefits” are expanding more quickly. Employers are doling out more money to cover the costs of vacation perks and retirement contributions, leading to overall compensation-package growth increasing at the quickest rate in two years, based on recent data from the Labor Department.
Private-sector workers’ average hourly total compensation, which went up by 4% from Q3 last year, is “the best gain in total compensation since the same quarter in 2015.”
Benefits are doing more of the heavy lifting than wages are in terms of growth — the former have gone up by 4.6% since last year, “the best gain in more than two years,” with increases in paid leave and retirement benefits contributing more to the uptick than another mentioned factor.
The breakdown of rising benefits looks like this, according to WSJ: “Retirement benefits, measured at an hourly rate, rose 11.2% from a year earlier. Paid leave improved by 5%. Insurance costs, which includes health insurance premium paid by employers, rose 3.5% from a year earlier.”
Wages in the private sector, meanwhile, are up 3.7% from last year, which WSJ says is the highest growth in two years.
Explaining the gap between salary and benefit growth, WSJ offers this:
The data suggests that as the labor market tightens–the unemployment rate is trending at a 17-year low–employers might be stepping up fringe benefits as part of a compensation package. That could help explain why wages are advancing at a relatively subdued rate. Employers and workers could favor improving benefits and flexibility to take time off over bigger paychecks.
Job seekers, this tight job market may be good news for you — so long as you look at total compensation, not just the headline salary number. Chances are, you might be in for attractive benefits at your next employer.
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