Update: 2019 Special Survey of Hiring and Wages

For the past several years, the Richmond Fed has conducted a survey in November that asks firms about their recent experiences with hiring, their use of wage increases to attract or retain workers, and their future plans for employment. Previous Regional Matters posts have discussed the key findings from the surveys conducted in 2018, 2017, and 2016.

In several ways, the responses in 2019 look quite similar to those from the last few years. For example, the vast majority of businesses plan to either increase employment or leave headcounts unchanged over the next 12 months, although a slightly higher share of respondents in 2019 expected to hold employment at its current level compared to the past two years. (See chart below.) When asked about the factors keeping them from hiring, firms responding in 2019 emphasized difficulty finding qualified workers and a desire to keep operating costs down. These factors were consistent with what firms indicated the past several years.

Another similarity was the use of wage increases to attract workers. In 2019, approximately 28 percent of respondents who intended to hire said they planned to raise starting wages for most job categories over the next 12 months and another 47 percent said they planned to increase wages for only specific jobs. This left only around 24 percent of firms stating that they had no plans to raise wages, which was about on par with responses in 2018 and 2017 but smaller than the share of responses in 2016 and 2015 (over half of firms responding in 2015 said they were not planning to raise wages to attract workers).

With respect to changes in wages to retain workers, approximately 60 percent of businesses responding in 2019 said they were raising wages for some or most jobs by more than in previous years. (See chart below.) Although that share was down slightly from the responses received in 2018, there remained a fairly large share of firms that indicated giving broad-based wage increases (around 28 percent) to retain workers.

In sum, the most recent survey results indicated that a majority of firms plan to hire or hold payrolls steady over the next 12 months and plan to continue using wage increases to attract and retain workers. In addition, recent Beige Book reports have characterized the labor market as strong and said that Fifth District firms are increasingly using non-wage compensations, such as flexible work schedules, additional paid time off, training and apprenticeship programs, and sign-on and stay-on bonuses to fill open positions and to retain staff.

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Views expressed are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.