With a tight job market and the Great Resignation continuing, U.S. employers plan to hand out bigger pay increases in 2022, according to a survey released by Willis Towers Watson, a global professional services firm.
The survey, conducted between October and November 2021, looked at 1,004 American companies and found that nearly 1 in 3 respondents (32%) had increased the initial salary increase projections from June.
Companies originally planned to give employees a 3% pay rise on average, but they have now increased it to 3.4%, according to the survey. By comparison, employees working at the companies surveyed got a 2.8% pay rise in 2021, according to the survey.
People at all levels should get raises, from executives and leadership to support staff, production and manual labor positions, the investigation found.
The biggest pay increases are expected to appear in retail and wholesale trade, life and health insurance, finance, energy and industrial manufacturing, according to the survey.
►Increase in minimum wage: Minimum wage set to rise in 21 states, 35 towns and over $ 15 an hour
►Inflation:Reached highest level since 1982 as consumer prices jump 7% in 2021
The reason for these salary increases? The labor shortage is a bigger factor than rising inflation, said Catherine Hartmann, North America rewards practice manager at Willis Towers Watson.
Employer concerns about the ability to hire and retain talent far outweighed other factors driving wage increases, with 74% of companies surveyed citing the tight labor market. “There is a big re-prioritization of work, rewards and ongoing careers, and this puts significant pressure on the compensation programs of many employers,” Hartmann said in a comment accompanying the survey.
Adding to the adversity of employers: employees are indeed preparing to quit in 2022, according to data from a December study by consumer finance company Credit Karma.
The study, which included more than 1,000 respondents, found that 45% of Americans planned to explore new job opportunities in 2022, and the main reason listed respondents were not getting paid enough.
However, almost a quarter (22%) of Credit Karma survey respondents who were looking for a new job revealed that they were also looking for better benefits.
“As companies increase their salary budgets, larger salary increases alone will not be enough to meet their attraction and retention challenges,” said Lesli Jennings, senior director of work and rewards at Willis. Towers Watson.
Login bonuses, fairness, money retention, and recognition enhancements can be used to attract and retain employees, Jennings said. Plus, the focus on mental well-being, emphasis on diversity, equity and inclusion, and learning opportunities can complement a pay rise, Jennings says.
Michelle Shen is Money & Tech digital reporter for USA TODAY. You can reach her @ michelle_shen10 on Twitter.