Is the labor market “ripe for a lift off “ as reported by The Wall Street Journal? We’ve seen Wal-Mart raise the wages for 500,000 employees and we are seeing many states legislate increased minimum wages for workers. The employment market is showing its strongest growth in jobs since 1997 and all indications are that wage increases will continue after such a slow recovery from the recession.
It should come as no surprise to astute procurement professionals that rising employment costs will soon trigger price increase announcements. It’s time to actively monitor the supply base, keeping a check on key suppliers, create a message for expectation management, audit suppliers for productivity gains and build an effective strategy for containment action.
Don’t be surprised if suppliers capitalize on increasing labor markets to bolster prices and margins. So, like the scout motto,