If you’re tired of hearing about the “Great Resignation,” let us apologize now for bringing it up again. Unfortunately, it’s not going anywhere soon. And when the topic of salary increases for 2022 is broached, there’s no avoiding it.
Now that we got that out of the way, on to salary increases for 2022.
Despite what was projected in 2021 for 2022 salary increases, it has gone up. And of course, the reason is the tight labor market.
Salary increase projections
A new survey of 1,004 U.S. companies, found 32% increased their “salary increase projections” that were made in early 2021. Instead of an overall average increase of 3.0% budgeted in June 2021, it increased to 3.4%. The survey was conducted during October and November 2021, by Willis Towers Watson (WTW), a global advisory, brokering and solutions company.
The industries predicted to have the biggest salary increases in 2022 compared to what their increases were in 2021 are:
- Retail and wholesale trade: 2.8% to 3.6%
- Finance: 2.7% to 3.5%
- Life and health insurance: 2.7% to 3.5%
- Energy: 2.65% to 3.4%
- Industrial manufacturing: 2.6% to 3.4%
“There’s a great reprioritization of work, rewards and careers under way, and it’s putting significant pressure on compensation programs for many employers,” Catherin Hartmann, North America Rewards practice leader, said in a news release.
But not everyone can increase salaries. It really correlates with how your business did and is still doing through the pandemic. Did you get government relief measures? Did you have layoffs? Every company is unique so don’t think you have to throw these big salaries at people.
“While companies are boosting salary budgets, bigger pay raises alone won’t be enough to help address their attraction and retention challenges,” said Leslie Jennings, senior director, Work & Rewards, WTW. “Supplemental tactics including sign-on bonuses, equity and cash retention, and recognition enhancements plus employee experience drivers such as enhanced career enablement, emphasis on mental wellbeing, focus on DEI [diversity, equity and inclusion], and learning and reskilling opportunities can combine to improve the effectiveness of a compensation program. Winning the talent race will require employers to continue to be creative and comprehensive with their Total Rewards strategy.”