Employers Planning Larger Pay Raises for 2022
As U.S. employers recover from the economic fallout from the pandemic and face mounting challenges to attract and retain employees, they are planning to give employees larger raises next year.
According to a recent survey of 1,220 companies by Willis Towers Watson, U.S. companies project average salary increases of 3.0% for executives, management and professional employees, and support staff in 2022. This is up from the average 2.7% increases that companies awarded employees in 2021. Salary increases hovered around 3.0% for the past decade until the pandemic forced companies to trim their budgets.
Projected Pay Raises of Some Major Industry Sectors
3.1% – high tech and pharmaceutical
3.0% – health care, media, and financial services
2.9% – retail
2.4% – oil and gas, leisure and hospitality
Top Performers Awarded with Larger Raises
The survey found that companies continue to reward their top performers with significantly larger pay raises than average-performing employees.
Management and professional employees receiving the highest possible performance rating were given an average increase of 4.5% in 2021, which is 73% higher than the 2.6% increases granted to those receiving average ratings.
The survey also showed that annual performance bonuses in 2021 were on the rise from 2020. In fact, amidst the continued pandemic, more than 9 out of 10 (91%) of companies surveyed awarded annual performance bonuses in 2021 based on 2020 performance. This is significantly higher than the 76% of companies that awarded them in 2020.
Salaries and bonuses are important factors in both attracting and retaining employees; however, there are many other elements that are just as important to employees (benefits, flexibility, opportunities for remote or hybrid working, corporate culture, ongoing training and development, advancement opportunities, etc.). As companies start planning for 2022, it is important to do a comprehensive review of all of these factors to ensure your company is well-positioned with a cast of dedicated, high-performing, happy employees.
ASA Staffing Today, 7/21/2021. Willis Towers Watson News Release (07/20/2021), “U.S. employers planning larger pay raises for 2022, Willis Towers Watson survey finds”.
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