ALEXANDRIA, Va.—U.S. employers are projected to pay their workers an average of 3.4% more this year, reports CNBC. The expected wage increased faster than the actual raises that were paid over the past two years, according to a Willis Towers Watson survey. Raises are expected to be similar across positions, including entry-level to senior-level employees.
Willis Towers Watson says that inflation is a key reason but not the only one. “I think the bigger piece is about this race for talent,” said Lesli Jennings, senior director of work and rewards at Willis Towers Watson.
In what has been dubbed “The Great Resignation,” Americans are leaving their jobs in droves, and employees younger than 35 are leading the way. A record 4.5 million workers quit their jobs in November. Reasons Americans are leaving their jobs include COVID-19 fears, child-care duties, burnout and higher levels of savings amassed during the pandemic.
CNBC reports that the hardest hit sectors are lower-paying, in-person jobs.
Nearly 74% of companies said the tight labor market was why they were increasing their budgeting for raises, according to the Willis Towers Watson survey, while only 31% of companies said inflation was the reason for giving their employees raises.
According to a poll by the U.S. Chamber of Commerce, many unemployed Americans are not eager to rejoin the workforce, with 53% saying they were only somewhat active or not very active at all in looking for work. Additionally, 56% said they can continue to be unemployed for more than six months before it becomes essential to return to full-time work. Eleven percent said it will be more than a year before it is necessary to return to work, and 15% said it will never be essential. The poll was conducted late last year.
Many retailers are turning to higher pay and better benefits to get workers. Rutter’s recently raised its starting wage to $16 an hour. Sheetz also raised its starting pay last year. Costco pays its employees $17 an hour. Walmart pays on average $16.40 in the U.S., and Target’s minimum wage is $15 an hour, and both companies offer free college tuition. In 2020, the average full-time associate starting wage at a convenience store was $11.89 an hour, which was up 40.5% in the past 10 years, according to the NACS State of the Industry Compensation Report® of 2020 Data.
The struggle to find labor has some companies rethinking job qualifications, as well as the types of incentives used to attract employees. Many companies are dropping the education requirements and background checks for applicants, including The Body Shop, and CVS no longer requires college graduates to submit their grades, while UPS is offering jobs in as little as 10 minutes to some employees.
Are you looking to hire? NACS has conducted extensive research on what people want in jobs to help retailers communicate the context of jobs by showcasing how they tie into what applicants care about most and what they treasure from previous jobs. Additionally, NACS Magazine dived into how to hire the Gen Z workforce—by understanding what this generation wants from an employer.