Companies Shift Focus to Flexible Shifts Over Wage Hikes Amid Inflation

As the US job market continues to grow, albeit at a slower pace, companies are shifting their focus from offering wage hikes to providing flexible shifts for hourly workers. This shift is attributed to ongoing inflation, which has led to a decrease in pressure to raise wages.

Why this matters: The shift towards flexible shifts reflects a broader trend in how companies are responding to economic pressures, and could have significant implications for the future of work and employee benefits. As the job market continues to evolve, this trend could have far-reaching consequences for workers, businesses, and the overall economy.

In April 2024, the US economy added 175,000 jobs, down from 315,000 in March. The unemployment rate ticked up slightly from 3.8% to 3.9%, but has remained below 4% for 27 consecutive months. Hourly wages rose a modest 0.2% from March and 3.9% from a year earlier, marking the smallest annual gain since June 2021.

Steven Kramer, CEO of WorkJam, noted the shift in companies' strategies, stating, "They're allowing workers to swap a shift or pick up a shift... Companies are focusing more on offering flexibility in shifts for workers who are increasingly juggling multiple jobs to pay their bills in the face of still stubborn inflation."

The Federal Reserve has been keeping interest rates at a two-decade high to combat persistently elevated inflation. The moderation in hiring and slowdown in wage growth may lead to rate cuts in the coming months. Despite the Fed's aggressive rate hikes, the job market has repeatedly proved more resilient than expected.

In terms of sector-specific hiring, healthcare companies led the way in April, adding 56,000 jobs. Warehouse and transportation companies added 22,000 positions, while retailers contributed 20,000 new jobs. Government hiring at all levels slowed significantly, with only 8,000 jobs added in April, the lowest monthly total since December 2022.

Other indicators also point to a cooling job market. Job openings fell in March to 8.5 million, the lowest level in more than three years. Consumer inflation, while still elevated at 3.5% year-over-year in March, hasn't declined since October and remains well above the Fed's 2% target.

Key Takeaways

• US job market grows at slower pace, with 175,000 jobs added in April 2024.
• Companies shift focus from wage hikes to offering flexible shifts for hourly workers.
• Unemployment rate rises to 3.9%, but remains below 4% for 27 consecutive months.
• Hourly wages rise 0.2% from March, marking the smallest annual gain since June 2021.
• Flexible shifts become a priority as companies adapt to economic pressures and inflation.