Worker compensation grew more than expected in the third quarter of 2023, according to the Employment Cost Index (ECI) released by the Bureau of Labor Statistics (BLS). This indicates that employers remain competitive with pay in order to attract and retain top talent.

What Employers Need to Know

Key Findings

• Worker compensation grew 1.1 percent in the third quarter of 2023, slightly higher than the 1 percent climb seen in the second quarter.

• Wages and salaries increased by 1.2 percent, and benefit costs increased by 0.9 percent from June 2023.

• Year-over-year, compensation costs in the U.S. for private sector workers rose 4.3 percent, including pay and benefits.

• Wages and salaries increased 4.5 percent for the 12-month period ending in September 2023, while the cost of benefits increased 3.9 percent for the same period.

Implications for Employers

• Workers are demanding higher pay and benefits in order to stay in the workforce.

• Employers need to offer competitive compensation packages in order to attract and retain top talent.

• Employers should regularly review their compensation and benefits packages to ensure that they are still competitive.

What Employers Can Do

• Conduct regular salary surveys.

• Offer a competitive benefits package.

• Be flexible with compensation packages.

• Promote a positive work-life balance.

Conclusion

The latest ECI data shows that worker compensation grew more than expected in the third quarter of 2023. This is a positive sign for the economy, but it also means that employers need to be prepared to offer competitive compensation packages in order to attract and retain top talent.

Employers can remain competitive by conducting regular salary surveys, offering a competitive benefits package, being flexible with their compensation packages, and promoting a positive work-life balance.

Do you need help assessing how competitive your compensation packages are in relation to the market you are operating in? If so, we can help! Let’s Talk!