According to new data from Willis Tower Watson’s 2023 Salary Budget Planning Report, overall salary increases in the U.S. will rise to 4.6% in 2023. The predicted 4.6% increase is 0.4% higher than increases in 2022.
Interestingly, survey data from the new report found that 77% of companies reported being motivated to boost earnings due to inflationary pressures, whereas 68% said they were motivated by the tight job market.
What’s more, 57% of respondents hired candidates higher in the relevant salary range, while a further 76% adjusted or are considering adjusting salary ranges more aggressively, increasing ranges by 2% to 5%.
Similarly, more than two-fifths of organizations have adjusted or are considering adjusting salaries more aggressively; 90% of organizations making or considering salary increase adjustments are doing two adjustments per year, according to the report.
In addition to pay pressures, 75% of respondents noted problems with attracting and retaining talent—a figure that has nearly tripled since 2020. In fact, the tight labor market was an influencing factor in the decision of nearly seven in 10 companies (68%) to increase salary budgets.
In a release, Hatti Johannson, a Research Director of Reward Data Intelligence at Willis Towers Watson said: “As inflation continues to rise and the threat of an economic downturn looms, companies are using a range of measures to support their staff during this time. Organizations should prioritize their actions based on the needs of both employers and employees and pay close attention to market data to inform any changes.”
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