US employers are boosting their salary increase projections for this year, according to a survey taken of 1,004 US companies in October and November by WTW, the new brand for Willis Towers Watson.
It found that nearly a third of US companies increased their salary projections from earlier in the year. Companies are now budgeting an overall average salary increase of 3.4% this year compared with the average 3.0% increase they had budgeted in June.
“There’s a great reprioritization of work, rewards and careers underway, and it’s putting significant pressure on compensation programs for many employers,” said Catherine Hartmann, North America rewards practice leader at WTW.
This year’s increase was already above the average pay increase of 2.8% in 2021.
Employees in these five industries are expected to see the largest salary increases in 2022 compared with their actual increases in 2021:
- Retail and wholesale trade: 2.8% to 3.6%
- Finance: 2.7% to 3.5%
- Life and health insurance: 2.7% to 3.5%
- Energy: 2.6% to 3.4%
- Industrial manufacturing: 2.6% to 3.4%
The survey found that 74% cited the tight labor markets for their increased salary budgets while only 34% cited stronger financial results and 31% cited inflation or the rising cost of suppliers.
