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U.S. companies are expecting to pay a 3.4% raise to workers in 2022

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A Willis Towers Watson survey found that American employers anticipate paying an average 3.4% rise to workers by 2022.

The projected wage increase is higher than what was actually paid over the past two years amid high inflation and competition for workers, according to a poll of 1 004 companies conducted from October through November.

Lesli Jnnings, Willis Towers Watson senior director of work rewards, stated that inflation is an important element. I believe the larger piece of it is about this competition for talent.

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Jennings indicated that the average increase in pay for different positions will be similar, from lower-skilled workers to higher-ranking employees.

The Great Resignation

The U.S. has a near record number of job openings. A record 4.5million workers are available. quit their jobsA phenomenon called the Great Resignation occurred in November.

Economists believe that Covid-related health concerns, along with other factors like child-care obligations, burnout, and increased relative savings accumulated during the pandemic have all contributed to a decrease in workers within the workforce.

Labor shortages have been most acute for low-paying, in-person jobs — such as bar, restaurant and hotel positions in the leisure and hospitality sector, according to economists.

Employers have increased wagesIt is difficult to retain workers and recruit them in this labor shortage. The Willis Towers Watson survey found that 74% of businesses cited the lackluster labor market to justify increasing their budgets to pay for raises.

31% fewer companies cited inflation to explain their higher estimates of pay. Inflation is a growing factor in the rising cost of living. fastest annual pace in about four decadesAs the pandemic has reduced supply, consumers have begun to shift their focus on physical goods.

Profits for corporations also jumped significantlyIn 2021, companies will have more flexibility to increase employee pay. Over a third (33%) of respondents cited better financial outcomes as the reason they wanted to increase pay.

In total, 32% increased their salaries projections in a matter of months. For example, in June 2021 respondents expected a 3% average rise in worker compensation (less than the current 3.4% forecast), as per Willis Towers Watson.

On average, respondents paid 2.8% more to their employees for 2021.

Jennings states that higher wages are not the only thing companies offer to workers. Some employers also emphasize career progression, mental well-being programs, and other elements of the workplace to maintain employees’ happiness and engagement.

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