In a positive pandemic recovery sign, more U.S. companies are planning larger pay raises next year according to a new survey by Wills Towers Watson.
The survey by the global advisory, brokering and solutions company also said employers are continuing to recognize high performers with significantly larger raises, and that are only 3% of companies are not planning to boost salaries next year.
“Companies are between a rock and a hard place when it comes to compensation planning,” said Catherine Hartmann, North America Rewards practice leader at Willis Towers Watson. “On the one hand, employers need to continue effectively managing fixed costs as they rebound from the pandemic.
“On the other hand, companies recognize they need to boost compensation with sign-on, referral and retention bonuses; skill premiums; midyear adjustments; or pay raises. Or they can utilize all of these options, especially with millions of Americans quitting their jobs, changing careers or postponing looking for employment.”
The 2021 General Industry Salary Budget Survey found that raises are returning to pre-pandemic levels. According to the survey, companies project average salary increases of 3% for executives, management and professional employees, and support staff in 2022. This is up from the average 2.7% increases companies granted this year.
Production and manual labor employees are in line to receive average increases of 2.8% next year, higher than the average 2.5% increases this year. Salary increases hovered around 3% for the past decade until the pandemic forced companies to trim budgets. The larger raises coincide with a surge in demand for labor and a shortage of supply of hourly workers and specific professional roles with premium skills.
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