COMP NEWS – Amidst the current labor shortage, companies have had to find new compensation packages to offer to attract new employees, as well as keep the ones they already have.

Employees have quit their jobs in droves this year as the economy has picked up after last year’s pandemic slump. Workers handed in a seasonally adjusted 4.3 million resignations in August, a record since tracking began in 2000 that came after months of elevated departures, according to the Bureau of Labor Statistics. Jobless claims last week dropped to the lowest level since March 2020.

Due to millions of employees quitting their jobs, companies have had to increase their cost of labor during a time in which inflation rates are already high.

The “Great Resignation” is exacerbating skills shortages across industries and forcing companies to pay more, driving up costs at a time of already high inflation. In a survey released last week, chief financial officers at U.S. businesses said quality and availability of labor was their No. 1 concern, with three-quarters of them stating they have difficulty hiring, according to Duke University’s Fuqua School of Business, which conducted the poll with the Federal Reserve Banks of Atlanta and Richmond.

In addition to raising salaries, companies have looked into other benefits as well.

Companies plan to keep hiring new workers and increasing non-wage compensation—for example, for healthcare and other benefits, the survey of 301 CFOs found. Wage bills are forecast to rise by 6.9% this year and next, while wages for new hires are set to rise by about 10%, according to the survey.

Overall, CFO’s are attempting to counteract the current labor shortage by increasing wages and offering more valuable benefits.

Read the full story here.

For more Comp News, see our recent posts.