Hiring remains front of mind for many business owners as we forge ahead into 2015. Unemployment continues to decline, and for the first time in several years, business owners are broadly expecting to raise wages for employees. This is good news for the economy, as the stagnant wage growth contributed to dampened consumer spending.
In the 2015 U.S. Jobs Forecast from CareerBuilder, more than one-third of employers expect to add full-time, permanent employees this year – the best outlook from the survey since 2006.
"The U.S. job market is turning a corner as caution gives way to confidence," said Matt Ferguson, CareerBuilder CEO. "… The amount of companies planning to hire in 2015 is up 12 percentage points over last year, setting the stage for a more competitive environment for recruiters that may lend itself to some movement in wages.”
Eighty-two percent of survey respondents plan to increase compensation for existing employees, and 64 percent indicated they would offer higher starting salaries for new employees. Most of the increases (46 percent) are expected to be in the 1 percent to 3 percent range, but 4 percent of respondents said some current employees could see increases of 11 percent or more.
The CareerBuilder survey isn't the only one pointing to a more competitive job market. In December, the National Federation of Independent Business Small Business Optimism Index revealed that a majority of respondents are trying to hire, but many are still reporting an inability to find qualified workers for their open positions. In addition, earnings trends improved 2 percentage points. Nearly a quarter (24 percent) of respondents reported increased compensation.
Small-business optimism reached its highest level since October 2006 – well before the Great Recession began. The index rose 2.3 points to 100.4, with positive gains in eight of its 10 components.
Even the two declining components are, in some ways, indicative of that growing optimism. Expectations for the economy to improve fell just one point, but this was after a 16-point surge in November's survey. The other non-positive indicator, current inventory, was flat.
“This could be a breakout for small business," said Bill Dunkelberg, NFIB chief economist, in a release about the December report. "There’s no question that small-business owners are feeling better about the economy. If they continue to feel that way 2015 could be a very good year.”
Significantly more respondents last month also said that now is a good time to expand, a sentiment that until recently hasn’t been very common among local business owners.
