Dive Brief:

• Nearly half of U.S. workers in a survey conducted between March and April by HR consulting firm Robert Half said they were earning less than they thought they deserved, and 31% said they would consider quitting their jobs by the end of 2021 if they did not receive a raise.
• Younger workers, specifically members of Gen Z, as well as women were most likely to say they felt underpaid, Robert Half said. When examining respondents by location, cities in the U.S. South made up seven of the top 10 areas by percentage of workers who felt underpaid, with Charlotte, North Carolina, ranking first at 62%.
• A separate Robert Half survey of more than 2,800 senior U.S. managers found starting compensation for professional occupations is expected to increase by 3.8% overall in 2022, while 48% of employers were offering signing bonuses. Most managers said they would look for talent in their local area before expanding their searches to other locations.

Dive Insight:

The pandemic derailed planned pay increases for many employers and even had an impact on the salary expectations of employees. But in just 12 months, a reversal in the talent market may be pushing things in a significantly different direction.

Across the board, wages appear to be going up. A Willis Towers Watson survey of employers conducted between April and June found that employers planned 2022 pay increases at an average of 3% for executives, management and professional employees and support staff. That figure not only exceeded 2021's 2.7% average increase but also tracks with Robert Half's research.

Employers are already seeing pay increases across industries. A quarterly survey of manufacturers last month by the National Association of Manufacturers found that respondents planned to increase wages by 3.5% over a 12-month period. In the restaurant sector, Chili's is one of many organizations to announce higher starting wages; it recently unveiled an $18 per hour minimum wage for its hourly U.S. employees.

Wage increases are due to hit the public sector as well. Shortly after his inauguration, President Joe Biden signed an executive order raising the minimum wage for federal contractors to $15 an hour beginning Jan. 30, 2022, up from the previous hourly minimum of $10.95.

Overall, pay increases have been implemented in response to a sparse talent market. An August survey by Salary.com found that employers may even be favoring base pay increases over signing bonuses moving forward. While the survey found only 20% of employers expected to offer signing bonuses by the end of 2021, 62% said they planned to increase base salaries over a six-month period.

The news has not cooled attempts by legislators to implement a higher national floor, with Congressional Democrats proposing earlier this year a law that would increase the federal minimum wage to $15 per hour by 2025. Meanwhile, employee advocates are raising other pay-related issues. For example, a September report by advocacy group One Fair Wage claimed that 35% of tipped employees experienced wage theft in the past year, with 34% reporting an increase in wage theft dating back to 2020.