MADISON (WKOW) — Businesses across the country have struggled to hire workers for months. Today, a major Madison employer is raising its minimum wage in an effort to attract new workers and retain current employees.
The American Family Insurance group will raise their minimum wage to $23/hour in July.
Jan Kitto, the company’s vice president of employee experience and effectiveness, said she hopes the move averts any potential hiring issues stemming from the labor shortage.
“We actually held up to that really well,” she said. “Our employee retention remains high, and that’s kind of our way of continuing on that path.”
She said that over the next few months, the company will analyze whether it should also raise wages for employees who currently earn $23/hour.
But she said increasing employee compensation would not change what customers pay each month.
“It will not affect our customer rates in the future,” she said.
Kitto said that due to the tight job market, American Family Insurance wants to stay competitive with other companies looking to hire the same
But that could be a challenge as more and more companies are considering raising salaries as well.
A Wisconsin Manufacturers and Commerce (WMC) survey found that 48% of companies in the state plan to increase salaries by 3% to 4% in 2022. 34% of companies plan to increase salaries by more than 4 %.
In total, only 3% of respondents told WMC that they have no plans to increase employee wages.
“We’re seeing wages increase at a rate we’ve never seen here in Wisconsin,” said WMC spokesman Nick Novak.
However, not all companies are able to offer raises, so they raise other benefits.
Some companies offer signing bonuses. Others provide employees with flexible work-from-home options. The Greater Madison Chamber of Commerce even gives employees two paid hours each week to exercise.
“We’re not in a position where we can hand out huge pay raises, but what can we do to show employees that we’re thinking of them, that we’re focused on what’s important to them?” Zach Brandon, speaker of the chamber, said.
Brandon said other Madison-area businesses also offer child care in an effort to keep parents from leaving the workforce.
“When you have companies that are struggling to hire workers, they’re willing to do whatever they can to get those workers working and in those positions for the long term,” Novak said.
As competition intensifies between companies, Novak said job seekers will benefit. However, there could be a downside if wages continue to rise.
“When you raise salaries, it means other things become more expensive,” he said. “You’re going to see prices go up on a variety of different things.”