If you’ve gone to the store or filled up your gas tank recently, you’ve seen the daily impact of inflation. In a recent study, the U.S. Bureau of Labor Statistics shows consumer prices jumping up 7% in December. This is a 40-year high. With living costs rising, employees argue that companies should be raising wages as well.
While most Americans saw a pay increase last year because of the pandemic, especially those front-line workers in retail, grocery and fast food seeing large pay increases, inflation is re-adjusting many people’s way of life.
While inflation is bad for employees, employers also have to worry about keeping workers who might be looking for higher-paying jobs. According to Willis Towers Watson, a recent survey shows that 44% of companies plan to give raises of 3% or more this year. Fewer than 10% are raising wages more than 5%, which would actually help with the 7% inflation we’ve seen since December.
In that same survey, over a thousand companies project that wage growth is faster than raises actually paid in the last two years.
“Inflation is an element of it, but that’s not the sole factor,” said Lesli Jennings, senior director at Willis Towers Watson. “I think the bigger piece is about this race for talent.” Companies also expect these pay raises across positions, whether entry level to senior management.
Companies have had a lot to think about with the COVID pandemic, surge in job openings, burnout and factors of childcare with many children still schooling from home. For many companies, raising wages was an integral part of keeping workers throughout the height of the COVID pandemic. Now, those raised wages aren’t enough with inflation.
Companies can also offer opportunities for bonus or reduce employee healthcare premiums to support their employees during inflation.
