The cost to move a banker just went up
The ADP report landed this morning and the headline was a miss. 44,000 private sector jobs in July, against a consensus somewhere in the 65,000 to 75,000 range depending on whose survey you read. June got revised down to 95,000. Every wire story ran the same angle: hiring is slowing.
That's the wrong number for anyone trying to fill a commercial banking seat in California. Two others in the same report matter a lot more.
The spread nobody is talking about
Pay growth for people who stayed put came in at 4.4 percent. Pay growth for people who changed jobs came in at 7.0 percent. ADP says that's the biggest year over year gain for job changers in nearly a year.
Now put the sector number next to it. Financial activities showed 5.2 percent pay growth for job stayers, the highest of any industry in the report. Higher than manufacturing, higher than construction, higher than health care.
Read those together. A banker sitting in a seat right now is already getting a raise near the top of the market. So the premium it takes to get that person to pick up the phone isn't the 2.6 point spread you see in the headline. It's bigger.
What that does to an offer
I've watched a lot of searches die on comp in twenty five years. Almost none of them died because the bank was cheap. They died because the bank was working off a stale anchor.
The anchor is usually the last person they hired into that seat. Sometimes it's the incumbent's package. Either way it got set in a different market, and by the time the offer goes out it's a year or more old.
Here's what that looks like in practice. You interview four people. Three of them are employed and doing fine, and their bank just gave them a solid increase to keep them there. Your offer clears their current number by a little, and it feels generous to you, because you're comparing it to what you paid last time. To them it's a lateral move with new risk attached. They pass. You're left with the one candidate who needed to leave, and you find out why in month seven.
What this data does not say
I'd rather flag this than let anyone quote it wrong.
“Financial activities” in the ADP report includes insurance, real estate, and leasing alongside banking. There's no way to pull commercial banking out of it, let alone California community banks. The Pacific region added 11,000 jobs, but Pacific covers Washington, Oregon, Alaska, and Hawaii too, so that's not a California read either.
The establishment size buckets don't map to bank asset size the way people assume. A two billion dollar bank sits in the same bucket as a large corporate employer. The eye catching 2.4 percent pay growth at firms under twenty employees is a small business story, not a community bank story. Everything from fifty employees up clustered between 4.7 and 4.8 percent.
ADP and the Bureau of Labor Statistics disagree regularly, and the official July payroll number comes out Friday. It may tell a different story. So treat this as a directional signal on the price of moving talent. That's all I'm claiming for it.
What I'd do with it
Set the range at kickoff, against current data, and write it down. If the number moves during the search, say so early, while there's still time to adjust.
And if the range is what it is and you can't stretch it, get honest about what else you're selling. Autonomy. A credit culture a person can actually work inside. A decision maker who returns calls. Those are real, they cost nothing, and they're the reason people leave large regionals for community banks in the first place. But they only work as an argument if they're true, and if you can say them out loud in the first conversation.
The banks that hire well this fall will be the ones who priced the seat honestly before they opened it.
If you're working through what a production or credit seat should pay in this market, let's talk.
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