Employees are about to see a little more in their paychecks in 2022, according to the latest Conference Board Salary Increase Budget Survey. Employers have said they plan to increase the budget for raises by 3.9% next year, the largest increase since 2008.
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Minimum wage rate hikes for hourly workers in many states in 2021 contributed, in part, to the budget increase. And there’s still discussion of a federal minimum wage rate increase. The other factor leading employers to allocate more funds toward worker salaries? Inflation.
While 46% of companies say wage increases for new hires required a larger budget, 39% said they were increasing salaries due to inflation, the Conference Board reported. Unfortunately, the salary increases are likely to vanish into the vapor of inflation, Forbes reported. The latest US Bureau of Labor Statistics report showed a jump of 6.2% in the overall cost of goods and services in 2021. And reports show that inflation will continue through 2022.
“Many companies determined their salary increase budgets earlier in 2021, before the full extent of the pickup in inflation and wage growth was evident, and before they knew how much other companies would be raising salary increase budgets,” the Conference Board report written by Gad Levanon of the Labor Market Institute stated.
These points to the tight labor market as being another contributing factor in increased wages. Companies are also beefing up employee benefits and offering flexible hours to attract workers. Workers may also see additional salary increases in the new year.
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“Salary increase budgets may be adjusted upwards in the coming months as more companies adjust their policies to account for the acceleration in wages and inflation,” Levanon added.
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