Get ready for a bigger salary: record raises expected in 2023

() — Employers plan to increase their salary budgets by 4.6% next year, the highest expected annual jump in 15 years.

That’s according to the latest international survey by consulting firm Willis Towers Watson, which included responses from 1,550 US employers. The survey was conducted from October 3 to November 4.

A large majority of organizations attributed the big jump to inflation and a tight labor market.

But with headline inflation still at 7.7%, any raise an employee gets below those levels means they’ll earn less because their payroll won’t pay much.

Often, what companies expect to pay more for any given year and what they end up paying differs based on market conditions. This year, for example, 70% of organizations surveyed by Willis Towers Watson said they spent more than they originally planned. Overall, employers ended up spending 4.2% more on wages this year than they did in 2021.

What does that mean for your salary increase?

Employers indicated they will use a myriad of ways to fund larger salary increases next year: 21% said they would re-evaluate their total rewards package to ensure it has the greatest impact on retention and engagement; 17% said they would raise prices; and 12% said they would restructure and reduce the workforce.

The way employers will distribute the additional funds for salaries will not be uniform.

Some workers will earn much more than average. It will depend on several factors, such as employee performance and the current market rate for a position, which may require upward adjustments for existing staff. The new wage transparency laws they will increase the pressure to offer those adjustments.

And, as always, those whose skills are most in demand are likely to see the largest salary increases, said Carolina Valencia, vice president of Gartner’s human resources practice. “Certain jobs will get a disproportionate share [del aumento del presupuesto salarial] because they are critical or difficult to hire.

Gartner expects even bigger salary increases next year. Its survey of employers, conducted in September and October, found that organizations in North America expect to offer merit raises of 7% on average.