WorldatWork's "2022-23 Salary Budget Survey" revealed that salary increase budgets reached their highest level in 20 years. Salary increase budgets in the United States rose to an average of 4.1% in 2022 with a 3.8% median and are projected to be at a 4.1% average in 2023.
Now in its 49th year, WorldatWork's Salary Budget Survey is the longest-running survey of its kind and offers CEOs, Chief Financial Officers and HR professionals robust, year-over-year data to design competitive compensation plans and total rewards strategies that attract and retain high-performing employees. The data covers nearly 14 million employees from 19 countries and provides previous years' data on salary increase budgets going back to 1974 (U.S.). An easy-to-use Online Reporting Tool enables users to drill down and build customized reports according to industry and geographic area (in the U.S. and Canada) allowing them to make informed salary budget projections at their organizations.
In the spring of 2021, U.S. respondents projected that 2022 total salary increase budgets would rise modestly from 2021's 3% average to a 3.3% average, while the median prediction (3%) showed no change from 2021's actual median increase of 3%.
The higher predicted 3.3% average suggested that a portion of respondents were anticipating notably higher increase budgets going forward, perhaps as they expected to compensate for pay increases that were delayed or deferred in prior years and to address increasing labor market pressure. A special "WorldatWork Salary Budget Quick Poll" conducted in January 2022 reported that more than half of respondents had increased their 2022 salary increase budget projections in the past six months — 5% by more than twice and 49% by up to two times.
"Organizations of all kinds, from government entities to global multi-nationals to modest enterprises, rely on this annual survey to benchmark and plan salary increase budgets to maintain the workforces they need," said Sue Holloway, Director, WorldatWork. "The rapid rise in salary increase budgets over the past couple years, combined with today's volatile economic environment, challenge HR pros to leverage data and think strategically as they formulate 2023 compensation budget recommendations and negotiate with CFOs."
When asked how certain they felt about their 2023 salary increase budget projections, nearly half of respondents (48%) felt moderately certain and more than a quarter (26%) felt slightly certain. Nearly equal proportions reported being not at all certain (13%) and very certain (12%) while only a few (2%) felt extremely certain. WorldatWork will conduct a special pulse poll in the fall to monitor whether projections are changing as the year unfolds.