Salary budgets will increase 3.0% in 2022, survey shows
The median projected percentage change for total salary budgets from 2021 to 2022 is an increase of 3.0%, according to XpertHR’s 2022 Salary Budget Survey of 429 U.S. employers. This is also the median increase projected for the salary budgets for all three employee groups covered by this survey: exempt, nonexempt, and officers/executives.
READ ALSO: Here are the companies making waves in Arizona’s technology industry
According to Andrew Hellwege, Surveys Editor, XpertHR, the projected median 3.0% increase in total salary budgets is notable, given a national labor shortage exacerbated by the COVID-19 pandemic.
“This median projected increase is on par with the actual median increase from 2020 to 2021, indicating that while the nature of work has shifted dramatically in the last two years, planned salary budget increases remain unchanged,” he explained. “Forward-looking companies that are eager to overcome the labor shortage may want to consider increasing their projected salary budgets by more than 3.0%, or potentially examine how benefits beyond compensation can contribute to a positive employee experience.”
Additionally, the survey reveals the large role recruitment and retention is playing in employers’ plans for next year’s wages. When asked if a dozen various factors would exert upward, downward, or no pressure at all on their organization’s 2022 total salary budget, nearly eight in 10 (79%) organizations cited recruitment/retention as an upward pressure.
“Nearly four in five employers noted recruitment and retention as a positive influence on their 2022 total salary budget, which appears to be a clear indication that the labor shortage is top of mind with employers as they plan for next year’s wages,” says Hellwege.
Meanwhile, salaries in the industry (73%), inflation/cost of living (69%), the economy (59%), and salaries within the organization (53%) round out the top five upward pressures on 2022 wages.
XpertHR’s Salary Budget Survey 2022 was conducted from Sept. 7 to Oct. 1, 2021. The survey included responses from 429 U.S. employers of various industries and workforce sizes, representing just over 2 million workers. The survey report explores several aspects of the salary budget planning process, including pressures on salary budgets, percentage change of salary budgets from 2021 to 2022, and in what month next year’s salary budgets will come into effect. Additionally, this report covers performance metrics for annual salary adjustments, plans for bonuses in 2022, and more.