Salaries are increasing despite the threat of a potential recession occurring over the next year. Staffing Employment Practices Liability Insurance is a worthwhile investment in the current economic environment.
Salaries Are Increasing and Employers Must Prepare
Salaries in the United States may rise in 2023 despite indications of a slowing economy, and employees are challenging to attract and retain.
Reasons to Consider Staffing Employment Practices Liability Insurance
Companies are planning for a salary increase of approximately 4.1%. It is the largest increase since 2008 but lags significantly behind the rate of inflation, which measured a yearly increase of 9.1% in June of 2022.
High Labor Demand
The first half of 2022 saw a 1.6% contraction of the U.S. gross domestic product in quarter one, followed by .9% in quarter two. A recession generally happens when two consecutive quarters of decreased economic activity occur. Likewise, seventy-three percent of organizations cite the tight labor market as their top concern for 2022. Most businesses are looking at pay raises for 2023, along with non-monetary actions like flexibility in work locations to retain their workforce.
Pay Pressures
The U.S. Bureau of Labor Statistics highlights that wages have remained strong during 2022, with salaries for the private sector increasing by 5.7% and hourly workers rising by 5.4%. Labor cost relief is likely coming, with overall increases but slower growth. Wage growth may slow by the end of 2023 as factors related to the pandemic decrease in importance.
Industries With Greatest Labor Woes
The Great Resignation is the term coined for the pandemic’s impact on America’s labor force, as over 47 million employees quit their jobs. Lower-wage jobs requiring physical attendance have experienced more difficulty retaining workers, while white-collar jobs enabling working from home have remained relatively stable during this volatile time. The hospitality industry suffered a 5.4% quit rate, and the retail industry was close behind with a 4% resignation rate. Other industries that may have employment practices liability insurance because of the struggle to keep employees include the following:
- Health Care
- Education
- Manufacturing
- Wholesale and Retail Trade
Financial Struggles Continue
Increasing living expenses are causing financial worries, which is an additional reason for Staffing Employment Practices Liability Insurance. 60% of U.S. workers report concern that their current salary is insufficient for survival in the current economy. That number is even higher for parents with minor children and Hispanic workers.
Need for Staffing Employment Practices Liability Insurance
As the cost of living rises, workers are looking for other options to supplement their existing income, highlighting the importance of the EPL policy. An estimated 28% of adults with existing jobs are planning to look for a new one soon. Approximately 27% report plans to take a second job for income supplementation, while 20% say they plan to seek a raise. Employers should consider Staffing Employment Practices Liability Insurance as protection in this volatile employment environment.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.