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Inflation in the New Year: Higher Expenses and Payroll Costs

By hire-up in Industry Resources

Rebecca Kirkman

President

Hire Up Staffing & Healthcare


4/18/2022

In this new year, it is hard to overlook the changes we are experiencing when it comes to inflation and the growing costs of everyday items. In recent months, states across the country have experienced higher gas prices, increased costs of electricity, and more raw materials needed for a wide variety of industries. Have you noticed such changes?

In addition to the recent increases related to inflation, there have been a host of changes organizations have experienced within the last two years in response to health and safety concerns during the pandemic. Leaders have had to try to stay on top of all required adjustments. The needs have been varied and ever-changing.

Yet another change this year involves higher payroll costs with an increase to the minimum wage for a number of states around the country. As a business partner to countless organizations around the nation, we work diligently to ensure our clients remain up to date with the new laws and ordinances impacting their municipalities. Did your state have an increase?

January 1, 2022, jumpstarted an increase in minimum wage for select states. To review a list of wages by state, visit State Minimum Wage Laws | U.S. Department of Labor (dol.gov). For examples of the minimum wage rate changes impacting clients with which we partner, see below:

  • Arizona: Minimum wage increased to $12.80
  • California: Organizations with twenty-six or more employees, the minimum wage rate increased to $15 per hour; organizations with up to twenty-five employees, the minimum wage increased to $14 per hour
  • Colorado: Minimum wage increased to $12.56
  • Illinois: Minimum wage increased to $12
  • Washington: Minimum wage increased to $14.49

The Federal minimum wage has been unchanged since 2009, and within the impacted states seeing an increase for our country’s lowest-paid front-line workers, jobseekers have an additional edge in a job market where candidates already hold the power. What does this mean for employers?

In a Candidate Market, jobseekers have different expectations than before. How can you compete to show your organization has a leg up on the others? Here are some ideas to consider:

  1. Identify How Your Organization is Different and Celebrate It! With wages being higher, yet equal for entry-level positions, employers may find substantial benefits in identifying and celebrating what makes their organization stand out as one that cares about their team. Highlight what makes your organization different than simply one more company offering a higher mandated wage. Do you offer flexible hours? Mentoring programs? Fast Track Management Training? Paid Lunches? Brag about them! They matter. A strong company culture is something to tout in recruiting efforts whenever possible.
  2. Share Recent Recruitment Stories: Have your latest recruits share their stories within internal and external platforms. By having them share their stories, they are helping to promote your employee experience and brand. In a world where people are checking reviews before buying anything online, it makes sense to use this same mentality in such a competitive market.
  3. Consider Adding New Benefits and Perks to Match the Needs of Today: Additional benefits to think about include things like:  Employee Wellness and More Mental Health Options, Employee and Family Discounts, Choices in Work Location, More Time Off, Pet Insurance, Dog Days, Financial Planning Assistance, Legal Assistance, Employee Focus Groups, Free Work and Home-Related Books and Resources.
  4. Do Not Forget About Your Current Workforce. Create excitement in the workplace every day! Create a robust yet COVID-responsible Employee Engagement calendar. Get creative with planning ways for your teams to play together, not just work. Take candid shots, and share the fun on your social platforms and within your internal communications, too.

Conduct a wage review for all positions. Raising the wage for entry-level positions can create a bit of an imbalance, known as compression, within other areas of your organizational pay structure. Consider a review of hourly workers already above the new minimum, as well as reviewing beyond hourly and into the salaries held within your organization and the work associated.

In a recent online SHRM article written about Wage Compression, Stephen Miller, Online Manager/Editor, Compensation & Benefits suggests addressing a pay adjustment in a multi-step process: Conduct a review of the employees potentially impacted, create a plan with options for how to best correct the wage compression (pay adjustments all at once or staggered), discuss with leadership, agree to a plan, and communicate the plan with your team.

In addition to an increase in labor costs, a new Federal Minimum Wage for front-line workers means an additional opportunity for you as an employer to identify and celebrate the ways in which YOUR company stands out above the rest. Getting the word out about these differences is key for maintaining an edge with your ability to recruit within a competitive job market.

Does your 2022 Recruiting Plan include any of the ideas shared above? Not sure where to start? Call us! We can help and will assist you with uncovering what makes your organization different and how that difference can mean recruiting stronger candidates in the new year.

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There is no doubt that 2021 brought forth opportunities with which to leverage new and emerging employment trends. Follow the Hire Up Staffing & Healthcare Services Blog to stay connected with a variety of topics aimed to help support you! Whether you are an active job seeker looking for tips and tricks to land your perfect job or an employer looking to fill a challenging position, we are here to help you HIRE UP!

State Minimum Wage Laws | U.S. Department of Labor (dol.gov)

As Minimum Wages Rise, Prepare for Pay Compression Issues (shrm.org)Job Candidates’ Expectations Have Changed. How Are Employers Responding? (shrm.org)


Rebecca Kirkman, President | April 18, 2022

Rebecca Kirkman is the President and Founder of Hire Up Staffing & Healthcare Services. Rebecca’s mission is as simple today as it was when she started Hire Up over 10 years ago: Connecting great Employers with great Employees. Hire Up leads job seekers to their dream careers and employers to their dream team. The true belief in the human connection and that people hire people is a passion for every Hire Up employee. Rebecca was proudly named the #1 Woman-Owned Business by The Business Journal.

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