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Companies are giving raises to new hires after just weeks on the job and reviewing salaries multiple times a year as bosses come to terms with a soaring level of inflation that is causing a global cost of living crisis, The Wall Street Journal reported.
A low unemployment rate has created a competitive labor market that has seen the scales tip in favor of jobseekers. Some workers are finding that now more than ever, switching jobs results in a larger paycheck. In response, companies are looking to stem employee attrition by accounting for inflation in their pay raises.
US employers had accounted for salary increases of 3.9% in 2022, according to a December report from think tank Conference Board. However, US inflation recently reached a 40-year record 8.6% in May. Meanwhile, Pearl Meyer, a compensation consultancy, found that 70% of organizations had implemented larger salary increases this year compared to 2021.