A majority of hiring managers expect market-driven increases in employee wages to continue in 2021, according to a recent Harris Poll commissioned by Express Employment Professionals. Among respondents, 58 percent expect the average wage at their companies to increase while only seven percent forecast a decrease. The forecasts are encouraging amid unemployment numbers remaining nearly twice as high as pre-pandemic levels.
Respondents from larger companies were more likely to anticipate wage increases, with 64 percent of companies with 50-99 employees, 63 percent of 100-499, and 68 percent among companies with over 500 employees. Regarding benefits, hiring managers are more bearish, with just 39 percent of them expecting increases in benefits and nearly half to remain the same. Similarly to the data regarding wage increases, the larger the company the more likely they are to expect to expand benefits while competing for talent.
Despite higher unemployment, Express experts say the hunt for talent is fierce, ultimately driving up wages.
“We saw significant wage increases throughout 2020 as employers tried to compete to get talent and incentivize people to come to work,” said David Robb, director of operations for the Express franchise in Grand Rapids, Michigan. “I think that we will see wages stabilize in early 2021 and not increase as drastically. But much of this will just depend on the competitiveness of the talent market.”
Meanwhile, the Biden administration is considering a $15 minimum wage mandate nationwide. The idea appears to have Congressional support, and a January 2021 survey from The Harris Poll indicated two-thirds of Americans support a $15 minimum wage.
“The impact of a federally mandated minimum wage would be different in every local area, as wages and cost of living can vary so drastically across the country,” Robb said. “I think it could be particularly harmful for smaller businesses who may not have the profit margins or capital to adjust their business models to stay profitable with a mandated increase in wages.”
In his market, he’s seen wages for entry-level positions increase significantly over the last two years. Despite a state minimum wage of $9.65 per hour, very few positions start below $13.
“At the heart of the minimum wage discussion is providing a living wage for anyone who has a job,” Robb added. “While this is a valid and admirable goal, and something I strongly support, I think the solution to achieve this is much more complicated than just a mandated minimum wage increase.”
As to particular industries that are more inclined to raise wages in 2021, Robb says manufacturing likely will because of production goals. “They have to do what is necessary to get people in the door,” he said.
Robb also doesn’t see any major benefit shifts for companies right now.
“With everything going on in 2020, most companies have not had the time to do anything new in this area,” he said. “If there are changes, it will probably be reductions in benefits as prices rise and companies try to stay profitable.”
There are still many unknowns about future economic conditions later in 2021, but rising wages to entice people off the sidelines for work is encouraging.
“Controlling the COVD-19 pandemic continues to be the largest factor standing in the way of a full recovery, so I’m very pleased to see businesses are optimistic for hiring to continue picking up,” Express CEO Bill Stoller said. “Businesses now need to take a look at what they can afford to hire, and retain, the best and brightest for their operations.”
Express Employment Professionals is headquartered in Oklahoma City and has 830 franchise staffing locations internationally providing localized staffing solutions. Express was founded in 1983 among three franchisees of Acme Personnel Services, which had declared bankruptcy during the recession of the early 1980s. By 1986, Express was generating $38 million in revenues, and would grow to over $3.56 billion by 2018.