Greater wage growth is great news for workers but challenges employers that want to hire and retain talent while controlling labor costs.

The Bureau of Labor Statistics (BLS) reported Jan. 6 that the average hourly wage rose by 10 cents in December 2016 from the previous month to $26.00 and rose by 2.9 percent over the year, representing the largest annual increase since 2009.

"Wages are rising as labor market slack has declined and we have reached the vicinity of what economists call 'full employment'—the maximum sustainable level of aggregate employment that [the labor market] can maintain without setting off inflation," said Josh Wright, chief economist for recruitment software company iCIMS, based in Matawan, N.J. READ MORE