Since U.S. businesses are still having a difficult time filling open positions with quality talent, employers anticipate pay to go up in 2023. According to the Bureau of Labor Statistics (BLS), there were more than 11 million job openings at the end of May 2022. In addition, approximately four million workers quit each month. The question employers keep asking themselves is, why are so many employees leaving their jobs?
Americans are quitting their jobs for multiple reasons, including:
- Seeking higher pay
- Remote work is appealing to individuals
- Rejecting return to office policies
- Burnt out
The Response From Employers
With a labor market that has more open jobs than individuals to fill them, businesses have been forced to stay current with what’s happening in the employee marketplace and how that affects pay. 96% of companies have begun increasing salary budgets. A study by WTW showed that the average salary increase hit 4.9% in 2022 compared to a four percent increase back in 2021. However, it is more important than ever for businesses to have a strategic plan while increasing salaries.
Additional insights from the WTW survey show:
- 46% of employers cited employees have higher expectations for wage increases because of inflation
- Two in three employers are budgeting for higher pay raises this year
- 90% of employers are having trouble attracting talent
- 75% of employers said the tight labor market is the main reason for increasing their salary budgets
Will These Efforts Be Enough?
The question remains whether pay increases will be enough for workers as they continue to battle rising prices. Despite a 4.1% salary budget increase, businesses will still fall behind inflation with these pay raises. In turn, workers’ take-home pay is weakened, reducing their buying power. Even though workers continue to hold the upper hand in the job market, many still fear a recession is imminent, and they question the economy’s state.
GMS Can Take Pressure Off Your Shoulders
Although there is no way to predict the future and your employees' response, GMS can certainly relieve you of some of the pressure you may be feeling. Our team of experts works diligently with your team to attract and retain quality employees. Our HR experts can help business owners conduct a salary analysis to determine the correct salary to offer employees based on the market conditions. No need to worry during these unprecedented times; allow GMS to take on the administrative burdens of running your business. Contact us today.