Employers competing for talent in a tough labor market across the region used larger pay raises in 2021 than in previous years, according to an annual wage and salary survey.
Pay rates increased 4.4 percent on average among the 293 West Michigan employers responding to this year’s survey conducted by The Employers’ Association in Cascade Township. That’s a higher rate than the organization’s annual survey found for years and is more than double the increases from last year in which 251 employers’ pay raises averaged 2 percent.
The larger raises for 2021 reflect the tight labor market and worker shortage, and how employers have been providing higher compensation to retain and attract staff, said Maggie McPhee, manager of research and information for The Employers’ Association.
The results from the 2021 wage and salary survey “were not a shocker,” given the labor market employers are facing, McPhee said.
“It’s been a while since we had 4-percent increases,” she said. “It’s more of a: ‘We have to do something for retention and recruitment, and this is what we’re doing.’ They have to make a change, and they’ve had to get as creative as they can. They’ve had to increase wages, and they’ve had to change benefit plans and the features of their plans.”
In addition to pay increases, some employers have reduced the eligibility time for receiving health benefits to attract new employers — from 90 days to 30 days, or even to their starting day, McPhee said.
A brief survey that The Employers’ Association conducted at midyear indicated flexibility in work schedules and benefit eligibility were the two biggest areas where employers were making changes to retain and recruit workers. Michigan’s present labor market features a workforce that remains below pre-pandemic levels.
The Michigan Department of Technology, Management and Budget recently reported the statewide civilian workforce that was 4.75 million people in October remained 96,000 people lower than a year earlier. The labor force was 276,000 people, or 5.8 percent, below February 2020, just prior to the COVID-19 pandemic’s onset in Michigan.
Michigan’s unemployment rate in October was 6.1 percent, compared to 8.1 percent a year ago. The state’s unemployment report noted that all major sectors added 38,000 payroll jobs in October, which was the second-highest monthly total in 2021 since February and the sixth straight month of improving employment numbers.
Who’s making more
The 2021 wage and salary survey by The Employers’ Association covered 348 jobs from 18 major employment categories. Nearly half of the respondents were small businesses with one to 99 employees. Another 30 percent employed 100 to 249 people, and 14 percent employed 250 to 499 people.
In a handful of specific job titles that The Employers’ Association released publicly from the 2021 wage survey, Level III buyers scored the largest raises this year at an average of 8.8 percent to an annual pay rate of $78,896.
The large increase for buyers who’ve been coping with supply shortages and supply-chain bottlenecks this year “doesn’t surprise me,” McPhee said.
“They’re the ones that are doing the supply-chain issues and they’re making it work,” she said. “They have to find that product somewhere, and if they’re doing a good job, then that’s what’s happening.”
In other job classifications, general sales managers averaged 6.4-percent pay raises this year to $113,798, and accountant II positions received 6.6-percent raises on average to $62,266.
Pay raises for tool and die makers averaged 3.8 percent, bringing their compensation to $31.23 an hour.
Applications developer/programmer II positions averaged 2.6-percent pay raises for a $91,060 annual salary, and 2.9 percent for administrative assistant II jobs, to $44,773, according to The Employers’ Association.
Several national surveys and research reports have pegged 2021 pays raises across the U.S. at 3 percent or slightly higher. Similar pay adjustments are projected for 2022.
Consulting firm Willis Towers Watson and The Conference Board each forecast 3-percent average pay raises across the U.S. in 2022. The Economic Research Institute predicts average pay raises of 3.4 percent nationally for next year.