The year 2021 ended with a slower rate of job creation than anticipated. But it turned out to be a banner year overall for job growth. The number of jobs increased by almost 6.6 million last year, the largest total on record. That is a 4.6 percent increase from the end of 2020.
Industries that had the largest gains during the year include the financial sector, professional and business services and especially the leisure and hospitality industry, which recovered more than 2.5 million jobs. That is a growth rate of almost 20 percent over 2020.
Some of the hotter job markets, based on where people are moving, include the states of Texas, Florida, and Tennessee, as well as Idaho, Maine, and New Mexico. California had the largest number of people moving out of state.
Efforts at Retaining Talent
Although there was good news on the job growth front, companies struggled to retain talent. That’s because during the same time, more than 46 million people quit their jobs. The number of people leaving their jobs has increased in 14 of the past 19 months. These figures do not include layoffs or retirements.
Economists expect millions of new jobs to be created in 2022. But companies will still have to confront problems with hiring and retaining their people.
In 2022, signs are that wage inflation will add to the uncertainty surrounding hiring and retention.
According to studies, recent hires in finance, technology, and human resources are receiving salary increases averaging around 10 percent in 2022 compared to the median pay in 2021. So it’s safe to say that someone in those professions moving to a new job would likely receive a double-digit pay increase. Most new jobs are offering a pay increase of at least 7 percent.
These trends pose big challenges to businesses because they need to evaluate their compensation packages in a timely manner so that they can determine what salaries to offer to remain competitive in attracting and retaining the best talent.