Dive Brief:

• The second half of 2019 saw hourly wages at small businesses "surging," according to data from Paychex released Dec. 31.
• Small business job gains flattened in the second half of the year as labor markets proved tight, James Diffley, chief regional economist at IHS Markit, said in a statement announcing the findings; "In response, weekly earnings have accelerated, surging from 2.49 percent mid-year to 4.13 percent at year-end."
• Small businesses also have upped workers' hours, with hours worked in December representing the strongest gain since 2012,​ Paychex found. An increase in hours for existing employees is "a sure sign employers are responding to the pressures of the tight labor market," said Martin Mucci, Paychex president and CEO. 

Dive Insight:

While other late 2019 wage reports remain to be seen, Paychex's findings may represent a shift. Nationwide, employers have been reluctant to raise wages, reportedly fearing a recession. Instead, they've generally focused recruiting and retention efforts on bonuses and benefits.

It may not come as a surprise, however, that small businesses are making changes. Owners of small and medium businesses said they were ​optimistic about their growth in a May 2019 TD Bank survey.​

It's also not surprising that small and medium businesses would be at the forefront of such a change. They've been quicker to raise wages historically, Tim Gates, now vice president of business development for Volt Workforce Solutions, previously told HR Dive. Small employers can increase a job title's pay band without much impact, he explained, while large employers can't.