It should be no surprise that salaries are on the rise in 2017. After nearly a decade of little to no salary appreciation, compensation is on the upswing for several reasons.
The GDP has been on a rapid rise ever since the Presidential Election. Whereas the Nation suffered nearly a decade of anemic growth never exceeding 2.6%, keeping in mind that historically the US economy has expanded 3% or more, on average. The GDP was at 3.3% for Q3 of 2017 and is about to hit 4% with the latest prediction at 3.98%.
With growth and expansions comes jobs and that is clear in the yearlong drop in unemployment. Nationally unemployment stands at 4.1%, the lowest since 1973, and South Florida being at 17-year low of 3.3% and a 3.6% for Florida overall. This is most important because 2.5% of the workforce that are job seekers are considered unemployable. That said, for South Florida that leaves only .8% of the unemployed for employers to choose from if those employers rely on solely hiring unemployed workers.
Proof of rising employment is demonstrated by the US Economy having gained 228,000 jobs in November of 2017. Newly created Manufacturing jobs are at a pace of 1,000 new jobs per day currently. Construction added 24,000 jobs in November and construction has been at a peak high for a consistent period now.
To add to this, Business Investment is picking up, and with financial conditions worldwide appearing to be good, plus the low volatility of the growing stock market, (the DOW currently at 24,800) only increases the confidence and optimism of business owners to grow and hire as they anticipate increased demand for products and services in their businesses. Additionally, the tax plan is a going to reduce the corporate tax rate from 35% to 21% a 14% reduction – 14%!! This alone has experts predicting the DOW will easily climb above 25,000 now that is has been enacted into law.
Therefore, with a growing GDP, Stock Market record highs, and Corporate Tax reductions in the future all contributing to Business Owner optimism, the supply of employable candidates among the unemployed is not meeting demand for open positions.
When supply doesn’t meet demand we know the price for supply goes up. This is no different for the employment market where there are very few unemployed workers for businesses to hire. So, if businesses expect to grow and meet the demand of their customers, those businesses will look to hire qualified candidates from their competitors. To do this they must offer some sort of incentive(s) for such candidates to inspire them to leave their current employment.
Incentives can take many forms, as in expanded duties, promotion in title, greater responsibilities, but certainly the one incentive that gets the most attention and has the best chance of luring a worker away from their current employer is MONEY. So, incentivized offers can include a raise in salary, the clear potential for a better bonus and in the current market conditions, even “sign on” bonuses.
Given all the variables discussed above, it’s undeniable we are in the market of salary increases and have been for most of this year. Any employer wishing to lure a worker away from a company that most likely has provided good employment and a decent wage will have to “up the ante” if they expect to hire that person.