U.S. wage growth increased to pre-pandemic levels, hitting 3.3% in the third quarter of 2021 while job switchers’ wages grew 6.6%, according to the ADP Research Institute® Workforce Vitality Report. That may be bad news for employers already reporting higher turnover and unfilled roles over the last six months.
Employees that changed jobs within the information and professional services industries realized double-digit wage growth of 10.5% and 10.6%, respectively, ADP's report found. Wages also grew for job switchers in finance and real estate (8.8%), manufacturing (7.5%) and construction (6.7%).
The lowest wage growth for job switchers was in the leisure and hospitality industry (0.4%), although the sector experienced the biggest employment growth gains (15%).
Job-switching wage growth rates varied based on gender and industry
Overall female wage growth spiked to 4.5%, compared to male wage growth of only 2.4% across all industries. "Further, females switched jobs at a higher rate than men and outpaced their male counterparts in wage growth, though from a lower wage level," Nela Richardson, ADP's chief economist, said in a statement.
Job-switching female wage growth outpaced male job switchers’ earnings increases in the following industries:
- Manufacturing (8.6% female versus 7.0% male)
- Information services (10.8% female versus male 10.7%)
- Trade, transportation and utilities (6.4% female versus 1.3% male)
Tepid employment growth overall for 25- to 34-year-olds and higher wages for older workers
Employment grew by 2% among 25- to 34-year-olds, compared to a 7.7% surge for workers aged 24 or younger, and 6% for employees over the age of 55. The wage level also varied significantly based on employees’ ages:
- $16.53 for workers ages 24 or younger
- $26.84 for workers ages 25 to 34
- $35.32 for workers ages 35 to 54
Employers may need to up the earnings’ ante if they want to keep jobholders around — more than half (58%) of those on the fence about whether to stay or go would jump ship if they received a better salary offer elsewhere, according to a recent ResumeBuilder.com survey.
Methodology:The Workforce Vitality Report report data is derived from ADP’s anonymous aggregated payroll data set sample of approximately 250,000 companies and 18 million employees each month. This accounts for about 15% of all employees in the U.S. private sector.
*ADP developed the report in collaboration with Moody’s Analytics, and included a range of metrics related to employment, hours and earnings. *