A new report projects salary budgets for U.S. employees to increase in 2023, mainly influenced by a labor market with more open jobs than people to fill them.
A recent salary budget planning report from advisory, broking and solutions company WTW found that companies are budgeting an overall average increase of 4.1% for 2023, compared with the 4% increase in 2022.
According to the report, 64% of U.S. employers are budgeting for higher employee pay raises than last year, while 41% have increased their budgets since original projections made earlier in 2022. Less than half of companies are sticking to the pay budgets they set at the start of the year.
Concerns over a tighter labor market seem to be the main driver for the higher budgets, with 73% of respondents citing it as their top factor. Additionally, 46% of respondents cited employee expectations for higher increases driven by inflation. See more findings.