Despite concerns about an economic slowdown, wages are still on the rise heading into the new year. In fact, companies are budgeting their biggest raises in 15 years, which will build on top of significant pay gains for many workers in 2022.
“As long as job openings outnumber job seekers and inflation continues to climb, workers will have more leverage to negotiate for what they want,” said, senior executive director at Robert Half International Inc. “Staying on top of compensation levels is a critical first step to recruiting and retaining top talent — and preparing for potential market fluctuations.”
Average raises were budgeted at 4% heading into 2022, although many companies implemented unbudgeted midyear increases in 2022 to prevent turnover. “At some point, those expenses become intolerable for the organization,” McDonald said.
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