In an effort to advertise job openings last year, Klaussner Home Furnishings started renting billboard space close to its Asheboro, North Carolina, headquarters.
The intense competition for workers increased wages for workers on the production floor of the furniture manufacturer by 12 to 20 percent. To sweeten the deal, the company started giving $1,000 signing bonuses.
Consumer demand was "through the roof," according to David Cybulski, president and CEO of Klaussner. We simply couldn't find enough workers quickly enough. But Mr. Cybulski has noticed that the frenzy has subsided recently.
He claimed that hiring for open positions has become simpler and that fewer Klaussner employees are leaving for other positions.
Instead of rushing to raise wages, the company, which employs about 1,100 people, is testing performance rewards to keep workers happy. In the spring, the $1,000 signing bonus expired.
Even as recession fears grow, the labor market is still incredibly strong by many standards. The unemployment rate, which was 3.7% in August, is still very low compared to the previous five decades.
There are twice as many open positions as there are unemployed people who can fill them. Despite some prominent announcements in recent weeks, the number of layoffs is almost at a record low.
However, there are hints that the scorching labor market may be cooling off. Major employers like Walmart and Amazon have announced hiring slowdowns; other companies like FedEx have completely stopped hiring.
In July, Americans left their employment at the lowest pace in more than a year, suggesting that the Great Resignation—a period of frequent job switching—may be coming to an end.
In particular, wage growth has slowed in sectors like dining and travel where the job market was very hot last year. Wage growth, which skyrocketed as businesses battled for workers, has also decreased.