Dive Brief:

• According to data from Korn Ferry Hay Group's 2016 Salary Forecast, workers are projected to see their biggest raise in three years. The United States is projected to have an average of 2.7% actual wage growth (accounting for inflation) in 2016.
• Historically low inflation (a rate of 0.3% in the U.S.) combined with increased demand in skilled workers is leading to these high numbers, the forecast said.
• According to reporting from Fast Company, inadequate salary and benefits is the leading reason why employees leave jobs – important to consider, since 2016 is projected to be a year in which employees may be seeking out new pastures.

Dive Insight:

With this news, employers are very likely to spend time thinking about retention strategies. Particularly with a strong raise year, the "cost of replacement" jumps, Paul McDonald, senior executive director for Robert Half International, told Fast Company.

One way to ensure that employees know their salary and benefits packages are sufficient is to switch from a single, annual performance review each year to a quarterly check-in system. This way, employers can award "spot bonuses or perks" for exceptional employees as well as provide a vision for a path toward advancement, McDonald told Fast Company.

Bottom line: If an employer isn’t paying its employees well, they will notice and they will leave – meaning replacements are going to be even more expensive. International HR consultant Mikaela Kiner told Fast Company that the external market drives wages much higher and companies then have to pay "premium for an unknown quantity" leaving the company in an undesirable position.