As small business owners look into their crystal balls and attempt to find insights into hiring and wages in 2019, they’ll notice several continuing trends from 2018. While there will be inevitable ebbs and flows, you can plan on it still being a tight labor market, making wages and other benefits increasingly relevant.
You’re likely already feeling the pinch when it comes to hiring and retaining employees. It’s no secret that unemployment has been hovering at rates we haven’t seen for nearly 2 decades. On top of that, research from the Federal Reserve Bank of San Francisco reveals that labor force participation among men and women between the prime ages of 25 and 54 is declining.
These twin factors could make it seem like hiring in 2019 will be more difficult than ever, but there are positive forces at play as well. For starters, young workers are entering the workforce at a faster rate than usual. This influx of talent can help mitigate the tightness of the labor market, though it also presents new challenges for employers.
After all, Millennials and those from Generation Z tend to value different things than older generations. Here are some of the features you’ll need to consider if you want to remain attractive to younger talent:
- Healthcare benefits
- Dental benefits
- Vision benefits
- Flexible schedules
- Career development
- Team activities
- Off-site work opportunities
- Student loan repayment
If this list seems daunting, start with the simpler perks. Add some free snacks and drinks to your office. Plan an off-site team retreat. Then steadily make your way up to the bigger benefits.
While younger workers won’t expect you to offer them the moon, they will appreciate a chance to discuss the options. Entrepreneurial expert Codie Sanchez recommends you make it a conversation, rather than an edict. This approach will improve the engagement of employees and help them feel like they have a say in the situation.
“When I approach the boss-staff relationship with a younger employee from a mentorship stance, it instantly opens communication and we arrive at mutual understandings of expectations and deliverables,” explains Sanchez.
Among the benefits you can expect to be asked about by potential (and current) employees of all ages is wages. And this is an interesting topic because, despite the good economy, wages aren’t growing at a robust pace. One study found that worker productivity has increased by 74% since 1973. Guess how much real hourly pay has risen in that same period. Only 13%.
In 2017, wage growth often trudged along at a rate well below 3%. Adjust for inflation and it’s actually declining. You should know, however, that experts anticipate this negative trend to begin leveling off in 2019.
With wages making a small uptick and benefits becoming increasingly employee-centric, the good news is that your employees will likely be motivated and engaged in the coming year. It’s worth pointing out that the majority of Americans in the workforce see high value in extra benefits and view them as a legitimate form of payment. So any increase in the benefits you offer in 2019 will likely be welcomed as an indirect increase in pay.