2023 is on the Way — Are Pay Increases Coming

2023 is on the Way — Are Pay Increases Coming

Business consulting firm, WTW took a wage survey and asked if business owners and the upper management of bigger companies are planning employee wage increases for 2023.

The answer is yes. That’s yes with an asterisk.

The companies surveyed averaged a 4.6% increase in wages. That’s up from the estimated 4.1% in June and higher than the 4.2% employees got this year.

However, in the long run — and when you look at inflation — the raise doesn’t look that high. That’s especially true when you consider from 2018 through 2021, the hikes per year averaged 3.1%, and that’s in years with inflation rates that were very low.

Inflation rose 7.7% in October. It’s the smallest increase since January. So, while the 4.6% looks good but won’t likely top inflation.

The Federal Reserve is forecasting — still — a 2% jump in inflation next year.

It’s a forecast that isn’t likely to happen but Boston Federal Reserve President Susan Collins thinks inflation can be brought under control and — even with interest rate hikes — can be done without huge layoffs from impacted companies.

I remain optimistic that there is a pathway to re-establishing labor market balance with only a modest rise in the unemployment rate — while remaining realistic about the risks of a larger downturn,” Collins said.

The companies surveyed by WTW don’t see the labor situation like the Fed. Not much is happening in the way of layoffs. WTW’s research director, Hatti Johansson said most companies are worried about finding enough employees to fill the jobs they have on hand.

  • *75% say they have trouble attracting new talent and keeping the talent they have
  • *To do that, many have bumped up their budgets and are paying higher salaries
  • *67% say to keep talent they’re giving employees more workspace flexibility
  • *61% are making more effort on diversity, inclusion and equity

As inflation continues to rise and the threat of an economic downturn looms, companies are using a range of measures to support their staff during this time,” Johansson said.

Source link: CNBC —https://cnb.cx/3EVGm2I

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