New Study Reveals Employers are Increasing Salary Budgets by Nearly 4% in 2022
According to the most recent Conference Board Salary Increase Budget Survey, employees may expect to see a small increase in their paychecks in 2022. In a recent survey, employers stated that they intend to boost the budget for raises by 3.9 percent next year, marking the greatest increase since 2008.
Increases in the minimum wage rates for hourly workers in numerous states in 2021 were a contributing factor to the budget increase in part. In addition, there is still talk about raising the federal minimum wage rate.
The other issue that is causing firms to invest more dollars toward employee compensation is a decrease in the number of employees. Inflation.
According to the Conference Board, while 46 percent of employers claim that wage hikes for new recruits necessitated a higher budget, 39 percent said that they were increasing salaries to keep up with inflation.
Unfortunately, according to Forbes, the income increases are likely to be lost in the vapor of inflation. According to the most recent Bureau of Labor Statistics report, the entire cost of goods and services is expected to increase by 6.2 percent in 2021.
Furthermore, inflation is expected to persist through 2022, according to reports.
In a report written by Gad Levanon of the Labor Market Institute for the Conference Board, it was stated that “many companies determined their salary increase budgets earlier in 2021, before the full extent of the pickup in inflation and wage growth was evident, and before they knew how much other companies would be raising salary increase budgets.”
This suggests that a tight labor market is another factor contributing to pay increases, in addition to greater productivity.
Companies are also increasing employee benefits and offering flexible work hours in order to recruit qualified employees. Additional compensation increases are also possible in the coming year for employees.
“As more organizations alter their policies to account for the acceleration in salaries and inflation,” Levanon continued, “salary rise budgets may be revised upward in the coming months.”