Dive Brief:
- U.S. employers plan to boost salaries 4.6% in 2023, according to the latest findings from global advisory and broking company WTW. This is up from a confirmed 4.2% this year.
- The expected rise is due to companies’ concerns over inflationary pressures and the still-tight labor market, WTW found.
- Companies surveyed by WTW said they plan to fund pay increases by adjusting compensation and benefit plans (21%), by increasing prices (17%) and through company restructuring and staff head count reductions (12%).
Dive Insight:
WTW’s findings show that companies intend to boost salaries even more than expected last time WTW surveyed respondents in the summer. The anticipated average salary boost then was 4.1% overall, which at the time was the biggest increase since the Great Recession.
The findings are perhaps interesting in light of the recent economic downturn. Layoffs across big tech, from Meta and Twitter to Amazon and Roku, have workers across industries on edge. About one-quarter of workers surveyed in September said they feared pay cuts were on the horizon.
But despite layoffs in big tech and many companies tightening their belts, a September Salary.com survey — like WTW’s — found that pay increases are likely on the horizon, with respondents to that survey suggesting even higher pay boosts are in the works, from 5% to 7%.
Why the continued demand for talent? A Glassdoor economist told HR Dive that several factors are driving the trend — chief among them an aging population. Companies that refuse to get on board with remote and hybrid work may find themselves continuing to struggle for talent as well, as workers have found the arrangement eases child care demands, disability needs and other work-life factors.
While broad layoffs in big tech might be alarming, experts have suggested they are likely industry-specific and do not necessarily signal more layoffs to come across a broad range of industries.
