Nearly half of U.S. companies plan to increase salary increase budgets in 2023
According to Salary.com’s annual US national salary budget survey, the long predominant 3% increase, which began its decline last year, has been replaced by a median 4% increase across all job categories. employees.
Forty-eight percent of U.S. employers forecast higher year-over-year wage increase budgets for 2023, continuing a recovery that began in 2022. Even more hopeful for U.S. workers: A quarter of employers plan to grant raises of the order of 5%. to 7% in 2023. Salary.com surveyed over 1,000 organizations in June 2022.
Actual and planned wage increases for 2022
The survey found that actual salary increases in 2022 were higher than what was expected in 2021: 22% of organizations granted increases in the range of 4% to 5% compared to 12% who had planned to do so l ‘last year.
“2023 promises to be another banner year for employees seeking pay increases,” said Chris Fusco, senior vice president of compensation at Salary.com. “For perspective, in 2020, as the pandemic took hold, just under 10% of employers expected a higher salary budget increase than the previous year. In 2023, nearly half of employers are planning higher salary budgets.
Other Survey Highlights
The cost of living increases: When organizations provided cost-of-living increases, they tended to be more generous in 2022 than in 2021, as average COLA increases exceeded 2% for the first time in many years. This is not surprising, given the record inflation rates in 2022 and the many rumors of an impending recession. However, smaller organizations (fewer than 500 full-time employees) were more likely to provide COLA increases than larger organizations. Average COLA increases for small organizations have hovered between 2.5% and 2.7%, which is higher than the typical 2% provided by large organizations.
Geography: The Pacific Northwest continues to pay slightly higher wages than other parts of the country, with median total increases in the 5% range compared to the US median of 4%.
Industries: Median total healthcare increases in 2022 were around 3%, significantly less than the US median of 4% with less variability than the overall US population. While remarkable given the industry’s struggle to attract and retain quality workers, wage increases in the health care industry are affected by reimbursement limits imposed by private and federal health insurers.
Other categories in the survey, such as variable pay and salary structure increases, fell in line with data from previous years. In terms of pay practices, the vast majority of organizations surveyed use a common date employee pay increase cycle (87%), with January and April being the most popular months.
More than 1,000 human resources professionals from 20 diverse industries (including healthcare, manufacturing, financial services, retail and wholesale, hospitality and recreation, and education) participated in the this year’s survey, which ended on June 17, 2022. Now in its 12th year, Salary.com’s National Salary Budget Survey in the United States and Canada is designed to collect essential data on the how organizations are budgeting for salary increases over the next year and provides an overview of current variable compensation practices.