Christopher M. Broyhill, Ph.D., CAM
As a professional statistician and comp geek, one of the websites I monitor very closely is that of the U.S. Bureau of Labor Statistics. At the end of the month following the calendar quarter, the BLS publishes a stat that is a key indicator of wage change in the U.S. over the previous quarter and even the previous year. The stat is Total Compensation Change and is reported for Civilian Workers (Federal Government Non-Military), Private Industry Workers, and State and Local Government Workers. Business aviation personnel fall under Private Industry Workers and for Q1 of this year, Compensation for this group increased by a full 1%, an annualized growth rate of 4%! This quarterly rate of compensation growth hasn't been seen in the last ten years!
Quarterly Change in Total Compensation for Private Industry Workers (Source:https://data.bls.gov/timeseries/CIS2010000000000Q)
The strong growth in this last quarter raised the 12-month compensation growth level to 2.8%, the same as it was before the COVID crisis began and near the highest level it's been in the last 10 years as well.
Annual Change in Total Compensation for Private Industry Workers (Source:https://data.bls.gov/timeseries/CIU2010000000000A)
What does this mean for business aviation? Two things come to mind. First, it's data for aviation managers to use in their interactions with their executives, principals and HR comp professionals. The cost of labor in private industry continues to rise despite the COVID crisis and business aviation professionals are part of that labor force. Secondly, it's an indication that many companies did not take advantage of the COVID crisis to push labor costs down by reducing compensation. These are the companies that will retain personnel as both the economy in general and the travel industry in particular continue to recover.
There is a perfect personnel storm brewing in business aviation. The airlines are recovering faster than many predicted. Delta and United have re-started their hiring pipelines. American expects to have its entire fleet operational by the end of this quarter. Regional airlines are hiring and NetJets recently announced it is seeking 150 new pilots. The demand for pilots will quickly exceed pre-COVID levels. The companies who follow the data, treat their personnel well, and pay them competitively will keep their operations well staffed. The ones who don't will see an unprecedented exodus.
If you're wondering about proper levels of compensation to promote retention, there is only one definitive tool in the business aviation industry to provide those answers, the AirComp Calculator. Learn more here.