The Conference Board’s Salary Increase Budget Survey indicates that the average annual raise for current employees is accelerating. In 2022, salary increase budgets are estimated to be 3.9% – the highest rate since 2008. Due to the high wage growth and inflation seen since April 2021, our Salary Increase Budget Survey was fielded again in November 2021.

The average 2021 salary increase budget jumped from 2.6 percent in the April 2021 survey to 3.0 percent in the November 2021 survey and the projections for 2022 salary increase budgets jumped almost a full percentage point from 3.0 in April to 3.9 in November. In the November survey almost half of respondents (46%) said that the increase in wages for new hires played a factor in salary increase budget estimates for 2022, and 39% said that increased inflation played a factor. It is likely that severe labor shortages will continue through 2022. Simultaneously, there are no signs that inflation is slowing down, and it may remain elevated in the coming months. This increases the need for cost-of-living adjustments. In this environment, the upward momentum for increasing salary budgets is likely to continue into early 2022.

 By Gad Levanon, PhD, Vice President, Labor Markets, The Conference Board