If you feel like it's been a while since you've gotten a pay raise, 2022 might just be your lucky year.
Average base pay is expected to increase by nearly 4% next year -- the biggest one-year hike since 2008. That's according to The Conference Board's latest wage survey of 240 companies, the majority of which employ more than 10,000 people.
The survey found that on average, companies are setting aside 3.9% of their 2022 payroll strictly for employee raises.
Nearly half (46%) of employers said they are planning pay raises for current employees to keep up with higher wages offered to new hires.
"The faster wage growth of new hires has led to pay compression, which is when wage premiums for work experience shrinks. When more experienced workers feel that their pay advantage is no longer significant, they may seek new jobs in the tight labor market, which leads to high labor turnover of more experienced workers," survey author Gad Levanon said in a statement. "Indeed, the quits rate is now the highest in recorded history. Employers faced with extensive departures of experienced workers will raise wages faster for current employees in order to maintain an effective workforce."
Nearly one in four employers (39%) said inflation also played a role in their decision to hike payrates.
"The rapid increase in wages and inflation are forcing businesses to make important decisions regarding their approach to salaries, recruiting, and retention," Levanon said. "In particular, companies are likely to raise wages aggressively for their current employees or they will risk even lower retention rates."
Levanon said severe labor shortages are likely to continue in 2022, with wages for new hires, and workers in blue-collar and manual services jobs growing faster than average.
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