NEW YORK CITY, New York: According to a November survey involving compensation of workers, conducted by the Conference Board, a nonprofit group of mostly large businesses, companies are setting aside more money since wages are expected to increase at the fastest rate in more than a decade.
Additionally, employers are fighting to keep and hire workers in a historically tight labor market, and budgets for wage increases are expected to increase 3.9 percent next year, the highest annual jump since 2008, the survey stated.
At a time when a record number of jobs are going unfilled and consumers are dealing with the worst inflation in 39 years, increasing wages will help attract young workers and keep existing staff from leaving, said the report.
“Growth in wages for new hires and accelerating inflation are the main causes of the jump in salary and increased budgets,” the report said, adding that 46 percent of surveyed executives stressed that higher pay for new employees was a reason for the larger pay pools, while 39 percent said inflation contributed to the increase.
In a survey taken last month, the average pool of cash increased by 3 percent, compared with the 2.6 percent predicted in an earlier survey in April.
A labor shortage has enabled younger people to enter the workforce at higher pay levels, and for more experienced staff to pursue new positions and potentially higher salaries, and blue-collar workers to demand union representation and better working conditions.
“The rapid increase in wages and inflation are forcing businesses to make important decisions regarding their approach to salaries, recruiting, and retention,” the report said, noting that labor shortages will probably continue in 2022, with wages likely increasing by more than 4 percent.
“Wages for new hires and workers in blue-collar and manual services jobs will grow faster than average,” the report added.
The higher wages offered by many businesses could also cost consumers if companies raise the price of services or goods to cover higher salaries, the board noted.