We can’t make any promises, but word is your boss is planning to give you a big pay bump in 2022.
After two rough years of meager raises and even some freezes on salary increases during the pandemic, employers are planning to pony up and return to more normal annual raises, according to a recent survey from global advisory and insurance broker Willis Towers Watson.
It’s no surprise the more than 1,000 employers the company contacted this spring shared plans to grant bigger raises next year given the monumental competition for workers across industries. Data from the Bureau of Labor Statistics released this week showed the country has more open positions than at any other point since the department began measuring job openings in 2000.
Those 10.1 million job listings are tempting workers to seek out better pay and greater flexibility; by some estimates, more than 40% of workers are thinking about quitting their current jobs. Signs offering hiring bonuses for new workers have become commonplace in restaurant windows, one industry that’s been particularly desperate to hire as more Americans dine out.
In the face of what some are calling "The Great Resignation," companies have begun offering stronger benefits packages. They're paying for college, providing 401(k)s and in some cases offering child care in an attempt to lure job seekers.
“Attracting and retaining employees remains a major challenge for employers,” Catherine Hartmann, North America Rewards practice leader at Willis Towers Watson said in a news release. “Beyond competitive salaries, which are table stakes at the moment, companies also need to focus their spend on a diverse set of health, wealth and career programs to drive employee engagement.”
The survey found professional staff, managers and executives are set to receive an average pay increase of 3% next year, an increase from average raises of 2.7% in 2021. Workers in manual labor and similar trades can likely expect pay increases of about 2.8% in 2022, up from 2.5% this year.
Just 3% of employers plan to freeze raises in 2022. That's down from the 8% that didn't provide pay bumps last year, but the situation is still evolving as the economy recovers. For example, wage increases may not actually be able to keep up with high levels of inflation.
Before the pandemic, American workers’ yearly average raises were around 3%. They are gradually making their way back to pre-pandemic rates, though one group was the exception and saw huge pay bumps throughout the most difficult part of the recession: CEOs’ compensation went up by 16% in 2020, compared to 1.8% for the average worker, according to data from the Economic Policy Institute.
Of employees who are looking to leave their current jobs in the next six months, Credit Karma found their biggest motivator is finances. More than a third of those workers say they want to be making more money.
Will bigger raises at the start of 2022 convince them to stay put?