By David Pendered
The tight labor market in metro Atlanta and across the Southeast is finally compelling employers to raise wages, if only for those in highly skilled and specialized fields, according to the Federal Reserves latest economic report.
The report of higher wages stands in contrast to that of the Beige Book released in September. At that time, employers reported that they were turning down work rather than hiring more workers, especially in the construction sector.
What a difference three months have made. The Beige Book released Nov. 29 reported that employers are planning to hire, and to pay higher wages in those highly skilled sectors:
- “Contacts continued to report some wage growth, with acceleration in highly skilled/specialized positions or in highly competitive geographic labor markets.”
Some companies are going so far as to even open operations in areas where they can find an appropriate pool of labor:
- “Several firms noted broadening their geographical search for candidates, and some expanded their physical presence to new locations where they expected more abundant labor supply.”
Employers also expressed interest in hiring workers partly because the existing staff isn’t up to the task or is at, or beyond, its capacity:
- “In a survey of business contacts, most respondents indicated that they planned to increase employment over the next 12 months as a result of expected sales growth, a need for skills not possessed by current staff, and to mitigate concerns about current staff being overworked.”
Despite all this, the labor market is not all rosy in the Southeast. Employers reported that hiring is restrained by the bottom line:
- “The top factors restraining hiring plans were challenges finding workers with required skills and a desire to keep operating costs low.”
That effort to keep costs low is manifesting in the use of incentives other than wages and total compensation to attract workers:
- “Firms continued to use non-wage mechanisms to attract and to retain talent and keep wages down.”
Employers also gave a nod to the notion that they want workers to feel a connection to their workforce:
- “Business contacts continued to describe efforts to enhance and modernize their corporate culture in order to encourage people to join the firm and to build loyalty among existing employees.”
This stands in stark contrast to the depth of the Great Recession, when large employers were jettisoning staff by the hundreds and creating workplaces that seemed design to encourage workers to quit.
As the economy has found its footing, a growing proportion of the workforce is contract labor. They have little in the way job security and benefits. Given the tenuous nature of the situation, workers seem to appreciate the new outreach from employers:
- “Staffing agencies shared that from the job seeker’s perspective, these non-wage mechanisms were increasing in importance as compared with compensation.”
The Beige Book report by the Federal Reserve Bank of Atlanta contains anecdotal information provided by contacts in the private sector. The Atlanta Fed covers an area that includes Alabama, Florida and Georgia, and portions of Louisiana, Mississippi, and Tennessee.