Dive Brief:

• 2023 may see the trend of worker pay increases continue to rise, according to a Salary.com survey of more than 1,000 HR professionals that found nearly half of U.S. employers planned higher year-over-year budget increases next year compared to 2022.
• This follows a 2022 in which salary increases surpassed what many employers had planned to dole out, according to Salary.com. In all, 22% of organizations gave increases of between 4% and 5% this year, compared to just 12% in 2021 — an increase from the typical annual threshold of 3%. In 2023, pay increases may jump even higher; a quarter of respondents said they planned to give increases in the range of 5% to 7% in 2023.
• Regionally, employers in the Pacific Northwest offered higher pay than other areas of the U.S., including median total pay increases of 5% compared to the national average of 4%. Among industries, healthcare median total increases in 2022 hovered near 3%, less than the national median average.

Dive Insight:

Pay increases, like most areas of hiring in late 2022, are proving to be a headache for employers. The potential for an economic downturn has somewhat slowed a previously robust hiring market. Employers, though, are beginning to strategize around a downturn in ways to avoid losing their talent investments.

That may be why a recent Willis Towers Watson survey of employers found that 86% of respondents were hiring candidates on the higher end of salary ranges, with 31% stating that they were planning or considering adjusting employee salaries more frequently. A separate WTW report found that employers were planning to increase salaries by just over 4% on average in 2023 — the highest increase since 2008.

Read the full report here