The amount of money companies are setting aside for raises is expected to rise at the fastest rate in more than a decade, as employers fight to keep and hire workers in a historically tight labor market, a new survey says.
Budgets for wage hikes are projected to jump 3.9 percent next year, the biggest annual leap since 2008, according to a November survey of compensation executives by the Conference Board, a nonprofit membership group of mostly large businesses.
The growing pools of cash are meant to entice young workers and hold on to existing staff at a time when a record number of jobs are going unfilled, and consumers are dealing with the worst inflation in 39 years.
“Growth in wages for new hires and accelerating inflation are the main causes of the jump in salary increase budgets,’’ the report said. It added that 46 percent of executives said higher pay for new employees was a reason for the larger pay pools that are expected, while 39 percent said inflation helped fuel the increase.
The consumer price index increased 6.8 percent in November as compared to the previous year, the fastest pace since 1982, with the cost of groceries, gas, rent and cars all on the rise, the Labor Department said Friday.
Click here for more from Charisse Jones of USA Today, courtesy of Yahoo Finance.