What the 4.8% pay gap means for a restaurant, an HVAC shop and a cleaning company's payroll

The headline from Wednesday's ADP report was 86,000 private-sector jobs in October, which we covered in our main story. The line that matters more to an owner with employees is further down. CNBC reported that pay for job-changers rose 4.8% from a year earlier, while pay for workers who stayed rose 3%. Overall base pay rose 3.2%. ADP chief economist Nela Richardson said earnings growth for job-changers was the fastest since March 2024. CNBC also noted that the Bureau of Labor Statistics reported quits at their highest since March 2025.

Read together, that is a market in which people who leave get paid more than people who stay, and more people are leaving. That is the problem a small employer has to price.

Put a number on it

Take a business with nine employees averaging $45,000, a payroll of $405,000 a year. These are example figures, not an average for any trade.

Raise given	Per $45,000 worker	Nine-person payroll
3.0% (what stayers got)	$1,350	$12,150
4.8% (what movers got)	$2,160	$19,440
Difference	$810	$7,290

Add the employer share of Social Security and Medicare payroll tax, 7.65% of wages, and the $7,290 gap costs about $7,848 a year ($7,290 x 1.0765). That is roughly $654 a month. It is the price of matching the market for every employee. Few owners would do that for everyone, which is the point: the 4.8% is what the person with a recruiter's call is being offered, so the practical decision is who gets matched, not whether everyone does.

How it differs by trade

Restaurants. Leisure and hospitality added 19,000 jobs in October in ADP's data, per CNBC. Turnover in a kitchen or on a floor means training time, wasted shifts and slower service, not just a recruiting cost. The people worth matching are the line cook and the shift lead, not the whole roster.

605,380 independent restaurants are listed on CheckThisBiz, a directory of 7,704,724 independent US businesses, including 79,108 in CA, 54,058 in TX, 51,387 in NY. Chains and franchises are excluded from that count, so these are the owner-operated businesses that actually apply for funding.

That is a lot of employers fishing in the same pool. See our restaurant playbook.

HVAC and other construction trades. Construction added 13,000 jobs. A licensed technician who leaves takes certifications and customer relationships with them, and the seat can sit empty through the winter heating season when calls peak. For a shop with a few techs, a 4.8% raise on $60,000 is $2,880 a year, $1,080 more than 3%, against the revenue from a van that cannot go out.

40,729 independent hvac are listed on CheckThisBiz, a directory of 7,704,724 independent US businesses, including 4,171 in TX, 3,613 in FL, 3,273 in CA. Chains and franchises are excluded from that count, so these are the owner-operated businesses that actually apply for funding.

Cleaning and other services. The "other services" category added 10,000 jobs. In labor-heavy businesses with thin margins, payroll is most of the cost base, so a 1.8-point gap across the whole crew hurts more than in a business with high gross margins. The better move is a targeted raise for the crew leads who hold the client relationships, plus predictable hours, since ADP's own comment points to bonuses, overtime and more hours as part of what job-changers get.

Trucking and warehousing. The biggest gain was in trade, transportation and utilities, up 39,000. Carriers hiring into the holiday peak are competing with each other for drivers and pickers, so seasonal pay will be the first place the gap shows.

What to do

• Do not give everyone 4.8%. Rank your people by how hard they would be to replace and how long the seat would sit empty, and match the market for the top two or three.
• Use non-wage levers where margins are tight. ADP's data shows bonuses, overtime and hours are part of the movers' pay. A schedule an employee can count on costs less than base pay.
• Wait for Friday before setting next year's raise budget. The government's October jobs report is due Friday, and economists surveyed by Dow Jones expect only 59,000 jobs, according to CNBC. ADP has printed 86,000 two months running while the government counted far fewer for September, so the two reports are telling different stories. A weak Friday would take some pressure off wages; a strong one would not.

The right move this week is a conversation with your two or three most valuable people, not a company-wide raise.

Sources: CNBC; ADP National Employment Report. Industry counts from CheckThisBiz. The nine-person payroll, raise costs and 7.65% payroll tax calculation are our arithmetic on example figures. This is market information, not investment advice.