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According to the ADP Workforce Vitality Report for the nation in the first quarter of 2019, wage growth, wage level, employment growth, and turnover rate are all up. Job Holders seemed to have little to no change in wage growth, and Entrants have a decrease for a year-over-year comparison. However, you start to see an increase in wage growth since last year for Job Switchers. If we look even closer into this report, we’ll find that regions have also seen different results form the market.

Wage and Employment Growth Happen in the West

Colorado-mapIn the West, we see the most growth across the board in wage growth/level and employment growth. Overall, we see a 4.2% growth rate and 0.6% increase year-over-year. This includes states like Colorado, where Job Holders, Switchers, and Entrants are all seeing wage growth. Below is the breakdown of who is seeing that growth and by how much:

  • Holders: 5.0% growth rate or a wage level of $32.86. (-0.5% for year-over-year)
  • Switchers: 7.8% growth rate or a wage level of $33.15. (.2% for year-over-year)
  • Entrants: 5.5% growth rate, or a wage level of $14.59. (1.8% for year-over-year)

Switchers are leading the wage growth in this area, followed by those entering the work force. In addition to these numbers, the region saw a 4.2% growth rate in employment, a 1.5% change from last year. This is great news for the market out West, specifically for candidates, but not so much for employers who have to compete with those higher wages. As far as turnover is concerned, the West saw a 63.8% growth rate, a 6.8% increase from last year.

Employment Growth Rate Remains Negative in Northeast

InNY-map-1places like New York, they saw some growth in most areas. Overall wage growth and wage level rate was 3.7%, or $32.05. Again, this is a 0.6% positive increase from last year. Broken down, wage growth looks like this in the Northeast:

  • Holders: 4.8% growth rate or a wage level of $34.50. (0.1% for year-over-year)
  • Switchers: 6.1% growth rate, or a wage level of $33.71. (0.9% for year-over-year) 
  • Entrants: 5.1% growth rate, or a wage level of $14.06. (0.1% for year-over-year)

While the turnover rate was 62.3% (2.6% increase year-over-year), it is important to note that the employment growth rate was -0.3%. This is a decrease from year-over-year, but just by 1.6%. The figure also points out that this market is at capacity when it comes to unemployment. The talent pool is slimmed and employers will have a hard time filling positions. This region's wage growth is still dominated by Switchers, but it is also a good place for Entrants compared to the South or Midwest growth rates. 

Settle Down Into a Longterm Position in the South

South-mapThe southern region includes states like Florida, Texas, Delaware, and Virginia. These states didn’t see as much growth as the West and Northeast in a few areas. For example, the South only saw a 3.6% rate overall in wage growth and level. This was the lowest growth rate overall, but it also was a 1.1% increase from year-over-year. When we take a closer look, you'll see the following growth in wages:

  • Holders: 4.8% growth rate or a wage level of $29.06. (0.2% for year-over-year)
  • Switchers: 4.7% growth rate or a wage level of $26.79. (1.9% for year-over-year)
  • Entrants: 3.7% growth rate or a wage level of $11.02. (0.1% for year-over-year)

Employment growth was still strong for the South at 2.1%. It brought a 0.3% increase from last year. What’s really important to notice is the turnover rate for this region. They ended up with a 74.1% rate, the highest percentage in the nation. This change was a 6.5% increase for year-over-year. High turnover can be a result of updating technology and getting rid of unnecessary positions, or it can be a trait of the given industry. Employers may see more turnover as the technology improves. The South is also a great place for candidates to settle into a longterm position. Holders have the upper hand when it comes to wage growth in the South.

 

Tighter Markets Emerge in the Midwest

Midwest-mapStates like Minnesota, Ohio, and Illinois are all seeing lackluster employment growth when compared to the other regions. The Midwest has a 1.2% growth rate for employment, and that’s only a 0.1% increase from the year prior. Overall, the Midwest saw a 4.0% wage growth rate or a wage level of $26.42. This is still a 1.2% change for year-over-year. If we break it down further, you’ll find that Holders, Switchers, and Entrants all have the lowest growth rate of the regions:

  • Holders: 4.6% growth rate or a wage level of $28.55. (-0.1% for year-over-year)
  • Switchers: 4.3% growth rate or a wage level of $26.93. (2.9% for year-over-year)
  • Entrants: 3.4% growth rate or a wage level of $11.93. (-1.4% for year-over-year)

On the other spectrum, the region’s turnover rate has blown up to 68.4%, a 5.8% increase from last year. This high figure could indicate a strong economy, but it may be hard to tell with retirements and involuntary separations muddying the data. The Midwest is another great place for Holders and longterm positions. Longterm employees can be great for employers looking to find loyal employees, but they will first have to attract them to their company. 

What to Do in Q2

It’s essential for employers to know where the growth is and where things are slowing down. If you find yourself in an area that isn’t growing fast enough, try seeking outside help to find the talent you need to hire passive candidates. However, if you live in a region where the growth rate is multiplying, then ask a recruiter to help you cut through the noise. There is much to learn from these reports, but at the end of the day, know the market value. One way you can do this is to download our salary guide. Click below to obtain access to the latest facts and figures that can help you with your talent search.

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