DALLAS — Even with all the recent concerns about the possibility of a recession in the months ahead, there have been some really good news concerning jobs.
For starters, employment numbers in July blew away expectations, as a staggering 528,000 jobs were created in the month.
And many of those hires are enjoying pay hikes. Dallas-based Think Why has a program called Labor IQ, which helps companies be competitive at compensating employees.
For many months, employers have been begging for workers. Because of competition among those who are hiring, job candidates have benefitted from escalating salary wars to lure them. In fact, Think Why was recently featured in a Bloomberg article focusing on Texas workers whose salaries are pulling closer to their counterparts in Silicon Valley in California.
Chief Labor Market Analyst Jay Denton at Think Why thinks we are now in a transition period away from that, but that the change will be gradual. So, if you are still on the job hunt, the pay party isn’t over yet, he says. Denton reveals his firm is still seeing a lot of companies ready to snatch up talent that might be let go by other companies. Because of that, they are not seeing wage pressures easing yet. So the salary wars rage on.
That said, Denton says job growth has to start slowing down because the job market has been expanding at an “unsustainable pace”. He points to an article he recently authored in which he predicted, “Companies that over-hired or stretched too far on compensation will be some of the first to implement hiring freezes or start terminations.” When might that be? No one knows for sure, but Denton says the storm clouds are looming.
So, is now a good time to switch jobs?
In the pandemic economic rebound last year and this year, many job switchers have noticed that ‘Company B’ and ‘Company C’ have been willing to sweeten the deal a whole lot more than ‘Company A’, where they work now.
Jay Denton says that on average in 2022, people switching jobs are earning 7% more than the amount they are currently making at ‘Company A’. Again, that’s because ‘Companies B and C’ need to poach talent and have been sweetening the deal to entice job switchers.
Denton says that sizable wage spread is still holding. But he thinks the disparity will start easing later this year, and will eventually settle at a more normal rate (something like a 4% sweeter salary for job jumpers). So if you are tempted to switch, you may want to get that extra 'sugar' while you still can.