The COVID-19 pandemic and its corresponding impact on the global economy will be studied for decades and centuries to come. In the here and now, however, economists are focused on how inflation, salary increases, and wage demands have impacted budgets internationally. At the time of this writing, The Conference Board recently published a report for large businesses that suggests that salary increases can be budgeted at 3.9% for 2022, a striking number and the highest rate of growth since 2008.

Let’s take a closer look at how wage growth and inflation are competing to make salary budgeting more complicated than normal. We’ll answer a few questions while highlighting what to expect in 2022.

Projected Wage Growth Tops 4%

Whether you are a new company growing in a post-pandemic world or an old company that has thrived despite it, you can expect wages to continue to grow in your targeted market. Companies like Complete Employee Services can help these companies as they prepare to handle growing wages in the face of rising inflation.

According to Gad Levanon, VP of Labor Markets at The Conference Board, labor shortages of a severe variety will likely continue throughout much of 2022. Projecting wage growth north of 4 percent, Levanon suggests that blue-collar workers and new hires are going to far outstrip their peers with regard to wage growth.

Compression and Inflation

While wage growth is always good, and current projections exceed 2008s impressive numbers, compression and inflation are both very real issues to pay attention to. As new hires receive faster pay raises, more tenured employees will put pressure on leadership to raise pay across the board. Coupled with a tightening labor market, companies might have difficulties maintaining their roster of employees should any of them feel less-than due to salary differences resulting from wage growth. In these situations, it is exceptionally helpful to have a human resource team on hand.

As pay continues to rise, inflation is doing everything it can to stay ahead of the curve. Inflation levels have reached a sight not seen since the early 1990s and consumer price increases are following along in lockstep. Major changes must manifest in the market for these situations to be resolved in a healthy way.

About Complete Employee Services

Complete Employee Services is dedicated to providing solutions to all of your Human Resources needs. In today’s fast-paced and fast-growing market, it is more important than ever to have leadership in HR that you can rely on. From workers’ compensation and payroll to key administrative duties, businesses can thrive when the right HR team is supporting them.

Contact Complete Employee Services today for a consultation regarding your HR needs.