Job Switchers Are Pulling Ahead on Pay Again — What Small Businesses Should Review

Workers who change jobs are pulling ahead on pay again. The Atlanta Fed’s Wage Growth Tracker put median year-over-year wage growth at 5.0% for job switchers and 3.6% for stayers in its August three-month moving averages. Separate Bank of America data found that the pay gain associated with changing jobs reached its highest level in more than three years in July, with particularly strong gains among hourly workers.

Small employers are feeling that pressure unevenly. NFIB’s August jobs report found that 35% of small business owners had openings they could not fill, while 31% had openings for skilled workers. The pressure is not uniform across a workforce, so compensation decisions should start with the roles that are becoming hardest to hire for or retain.

Why a national pay gap doesn’t set your raises

National wage growth does not tell an employer what a particular bookkeeper, technician, salesperson, or office manager should earn. Pay pressure varies by occupation, location, experience, and how difficult a position is to replace.

Hiring remains especially difficult for skilled positions. In August, 47% of small business owners reported finding few or no qualified applicants, while 31% had openings for skilled workers compared with 13% for unskilled labor.

Current job postings, state and local wage data, and salary comparison tools provide a better benchmark than applying a national switcher premium to every employee.

Total compensation also affects the comparison. BLS data for establishments with 1–49 workers shows average employer costs of $37.64 per employee hour in June 2026: $27.88 in wages and salaries and $9.76 in benefits. These national averages are useful for cost context, not as pay targets for individual roles.

How to identify roles that need a pay adjustment

A simple review can sort positions into three groups:

• Adjust now: Turnover or weak applicant flow persists, and local wage data shows the role is below market.
• Watch closely: Hiring still works, but offer acceptance, vacancy length, overtime, or tenure is worsening.
• Look beyond pay: Compensation is competitive, but employee feedback points to scheduling, advancement, workload, or management.

For a role that needs an adjustment, calculate the full annual cost, including payroll taxes and wage-linked expenses. Compare that with recruiting, interview time, overtime or temporary coverage, onboarding, and training costs created by repeated vacancies.

Owners working through those figures can fold the increase into a broader payroll budget instead of evaluating the raise in isolation.

When pay is not the problem

Higher wages will not fix every retention issue. If employees are already paid competitively, stay interviews, exit feedback, and manager conversations can help identify whether scheduling, advancement opportunities, workload, or supervision is driving departures.

Employers should compare the direct and administrative cost of any alternative benefit with the compensation adjustment it is intended to replace.

For small businesses, the useful comparison is not the national 5% figure but what a hard-to-fill role costs to lose. If replacing the same skills now requires substantially more pay, recruiting expense, and management time, the existing compensation may already be costing the business more than it saves.