Skip to main content
  • Foundation
  • Executive network
  • CEO Circle
  • Enterprise Solutions
  • Linkage Logo
  • Store
  • Sign In
  • Account
    • My Account
    • Logout
    • Global
    • India
    • MENA
SHRM
About
Book a Speaker
Join Today
Renew
Rejoin Now
Renew
  • Membership
  • Certification
    Certification

    Smiling asian student studying in library with laptop books doing online research for coursework, making notes for essay homework assignment, online education e-learning concept
    Get Certified!

    Be recognized as an HR leader with your SHRM-CP or SHRM-SCP credential.

    • How to Get Certified

      Demonstrate your ability to apply HR principles to real-life situations. No other HR certification compares.

      • How to Get Certified
      • Eligibility Criteria
      • Exam Details and Fees
      • SHRM-CP
      • SHRM-SCP
      • Which Certification is Best for Me
      • Certification FAQs
    • Prepare for the Exam

      Give yourself the best chance to pass your SHRM certification exam.

      • Exam Preparation
      • SHRM BASK
      • SHRM Learning System
      • Instructor-Led Learning
      • Self-Study
      • Study Aids & Add-ons
    • Recertification

      Recertify your SHRM Credentials before your end date!

      • Specialty Credentials
      • Qualifications
  • Topics & Tools
    Topics & Tools

    Stay up to date with workplace news and leverage our vast library of resources to streamline day-to-day HR tasks.

    The white house in washington, dc.
    Executive Order Impact Zone

    Do not abandon, but evaluate and evolve. It is about legal, equal opportunity for all.

    • News & Trends

      Follow breaking news and emerging workplace trends.

      Legal & Compliance

      Stay informed on workplace legal updates and their impacts.

      From the Workplace

      Explore diverse perspectives from your peers on today's workplaces.

      Flagships

      Get curated collections of podcasts, videos, articles, and more produced by SHRM.

    • HR Topics
      • AI in the Workplace
      • Civility at Work
      • Compensation & Benefits
      • Inclusion & Diversity
      • Talent Acquisition
      • Workplace Technology
      • Workplace Violence Prevention
      SEE ALL
      SHRM Research
    • Tools & Samples

      Access member resources and tools to streamline HR tasks.

      • Forms & Checklists
      • How-To Guides
      • Interactive Tools
      • Job Descriptions
      • Policies
      • Toolkits
      SEE ALL
      Ask an Advisor
  • Events & Education
    Events & Education

    SHRM25 in San Diego, June 29 - July 2, 2025
    Join us for SHRM25 in San Diego

    Register for the World’s Largest HR Conference being held on June 29 - July 2, 2025

    • Events
      • SHRM25
      • The AI+HI Project 2025
      • INCLUSION 2025
      • Talent 2026
      • Linkage Institute 2025
      SEE ALL
      Webinars
    • Educational Programs

      Designed and delivered by HR experts to empower you with the knowledge and tools you need to drive lasting change in the workplace.

      Specialty Credentials

      Demonstrate targeted competence and enhance credibility among peers and employers.

      Qualifications

      Gain a deeper understanding and develop critical skills.

    • Team Training & Development

      Customized training programs unique to your organization’s needs.

  • Business Solutions
  • Advocacy
    Advocacy

    Make your voice heard on public policy issues impacting the workplace.

    Advocacy
    SHRM's President & CEO testifies to Congress on "The State of American Education"
    • Policy Areas
      • Workforce Development
      • Workplace Inclusion
      • Workplace Flexibility & Leave
      • Workplace Governance
      • Workplace Health Care
      • Workplace Immigration
      State Affairs

      SHRM advances policy solutions in state legislatures nationwide.

      Global Policy

      SHRM is the go-to for global HR leaders and businesses on workplace matters.

    • Advocacy Team (A-Team)

      SHRM’s A-Team is a key member benefit, giving you the tools, insights, and opportunities to shape workplace policy and drive real impact.

      Take Action

      Urge lawmakers to support policies that create lasting, positive change.

      Advocacy & Legislative Resources

      Access SHRM’s curated policy materials and content.

    • SHRM-Led Coalitions
      • Generation Cares
      • The Section 127 Coalition
      • Learn More & Partner with SHRM Government Affairs
  • Community
    Community

    Woman raising hand in group
    Find a SHRM Chapter

    Easily find a local professional or student chapter in your area.

    • Chapters

      Find local connections from over 607 chapters and state councils and create your personalized HR network.

      SHRM Connect

      Post polls, get crowdsourced answers to your questions and network with other HR professionals online.

      SHRM Northern California

      Join SHRM members in the greater San Francisco Bay area for local events and networking.

    • Membership Councils

      Learn about SHRM's five regional councils and the Membership Advisory Council (MAC).

      • Membership Advisory Council
      • Regional Councils
    • Volunteers

      Learn about volunteer opportunities with SHRM.

      • Volunteer Leader Resource Center
Close
  • Membership
  • Certification
    back
    Certification
    Smiling asian student studying in library with laptop books doing online research for coursework, making notes for essay homework assignment, online education e-learning concept
    Get Certified!

    Be recognized as an HR leader with your SHRM-CP or SHRM-SCP credential.

    • How to Get Certified

      Demonstrate your ability to apply HR principles to real-life situations. No other HR certification compares.

      • How to Get Certified
      • Eligibility Criteria
      • Exam Details and Fees
      • SHRM-CP
      • SHRM-SCP
      • Which Certification is Best for Me
      • Certification FAQs
    • Prepare for the Exam

      Give yourself the best chance to pass your SHRM certification exam.

      • Exam Preparation
      • SHRM BASK
      • SHRM Learning System
      • Instructor-Led Learning
      • Self-Study
      • Study Aids & Add-ons
    • Recertification

      Recertify your SHRM Credentials before your end date!

      • Specialty Credentials
      • Qualifications
  • Topics & Tools
    back
    Topics & Tools

    Stay up to date with workplace news and leverage our vast library of resources to streamline day-to-day HR tasks.

    The white house in washington, dc.
    Executive Order Impact Zone

    Do not abandon, but evaluate and evolve. It is about legal, equal opportunity for all.

    • News & Trends

      Follow breaking news and emerging workplace trends.

      Legal & Compliance

      Stay informed on workplace legal updates and their impacts.

      From the Workplace

      Explore diverse perspectives from your peers on today's workplaces.

      Flagships

      Get curated collections of podcasts, videos, articles, and more produced by SHRM.

    • HR Topics
      • AI in the Workplace
      • Civility at Work
      • Compensation & Benefits
      • Inclusion & Diversity
      • Talent Acquisition
      • Workplace Technology
      • Workplace Violence Prevention
      SEE ALL
      SHRM Research
    • Tools & Samples

      Access member resources and tools to streamline HR tasks.

      • Forms & Checklists
      • How-To Guides
      • Interactive Tools
      • Job Descriptions
      • Policies
      • Toolkits
      SEE ALL
      Ask an Advisor
  • Events & Education
    back
    Events & Education
    SHRM25 in San Diego, June 29 - July 2, 2025
    Join us for SHRM25 in San Diego

    Register for the World’s Largest HR Conference being held on June 29 - July 2, 2025

    • Events
      • SHRM25
      • The AI+HI Project 2025
      • INCLUSION 2025
      • Talent 2026
      • Linkage Institute 2025
      SEE ALL
      Webinars
    • Educational Programs

      Designed and delivered by HR experts to empower you with the knowledge and tools you need to drive lasting change in the workplace.

      Specialty Credentials

      Demonstrate targeted competence and enhance credibility among peers and employers.

      Qualifications

      Gain a deeper understanding and develop critical skills.

    • Team Training & Development

      Customized training programs unique to your organization’s needs.

  • Business Solutions
  • Advocacy
    back
    Advocacy

    Make your voice heard on public policy issues impacting the workplace.

    Advocacy
    SHRM's President & CEO testifies to Congress on "The State of American Education"
    • Policy Areas
      • Workforce Development
      • Workplace Inclusion
      • Workplace Flexibility & Leave
      • Workplace Governance
      • Workplace Health Care
      • Workplace Immigration
      State Affairs

      SHRM advances policy solutions in state legislatures nationwide.

      Global Policy

      SHRM is the go-to for global HR leaders and businesses on workplace matters.

    • Advocacy Team (A-Team)

      SHRM’s A-Team is a key member benefit, giving you the tools, insights, and opportunities to shape workplace policy and drive real impact.

      Take Action

      Urge lawmakers to support policies that create lasting, positive change.

      Advocacy & Legislative Resources

      Access SHRM’s curated policy materials and content.

    • SHRM-Led Coalitions
      • Generation Cares
      • The Section 127 Coalition
      • Learn More & Partner with SHRM Government Affairs
  • Community
    back
    Community
    Woman raising hand in group
    Find a SHRM Chapter

    Easily find a local professional or student chapter in your area.

    • Chapters

      Find local connections from over 607 chapters and state councils and create your personalized HR network.

      SHRM Connect

      Post polls, get crowdsourced answers to your questions and network with other HR professionals online.

      SHRM Northern California

      Join SHRM members in the greater San Francisco Bay area for local events and networking.

    • Membership Councils

      Learn about SHRM's five regional councils and the Membership Advisory Council (MAC).

      • Membership Advisory Council
      • Regional Councils
    • Volunteers

      Learn about volunteer opportunities with SHRM.

      • Volunteer Leader Resource Center
Join Today
Renew
Rejoin Now
Renew
  • Store
    • Global
    • India
    • MENA
  • About
  • Book a Speaker
  • Foundation
  • Executive network
  • CEO Circle
  • Enterprise Solutions
  • Linkage Logo
SHRM
Sign In
  • Account
    • My Account
    • Logout
Close

  1. Topics & Tools
  2. Workplace News & Trends
  3. Compensation & Benefits
  4. US Employers Boost Pay Budgets Despite Recession Concerns
Share
  • Linked In
  • Facebook
  • Twitter
  • Email

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus convallis sem tellus, vitae egestas felis vestibule ut.


Error message details.

Copy button
Reuse Permissions

Request permission to republish or redistribute SHRM content and materials.


Learn More
News

US Employers Boost Pay Budgets Despite Recession Concerns

Slower growth, lingering inflation and still-tight labor markets are factors to weigh

August 1, 2022 | Stephen Miller, CEBS

A calculator with the word inflation sitting on top of a pile of money.


Salary budgets for U.S. employees are projected to increase in 2023, mainly influenced by a labor market with more open jobs than people to fill them and inflation's impact on employees' pay expectations, despite signs that the economy is slowing.

FEATURED RESOURCE PAGE
Working Through an Unstable Economy
Working Through
an Unstable Economy

Consultancy WTW's July Salary Budget Planning Report found that companies are budgeting an overall average increase of 4.1 percent for 2023, compared with the average actual 4 percent increase in 2022. These are the largest increases since 2008 but significantly lower than the inflation rate, which was up 9.1 percent year over year in June.

The survey was conducted in April and May 2022. In the U.S., 1,430 organizations responded.

According to the report:

  • Nearly 2 in 3 U.S. employers (64 percent) have budgeted for higher employee pay raises last year, while two-fifths (41 percent) have increased their budgets since original projections were made earlier this year.
  • Less than half of companies (45 percent) are sticking with the pay budgets they set at the start of the year. Some companies are also making more-frequent salary increase adjustments. More than one-third (36 percent) have already increased or plan to increase how often they raise salaries. Among those respondents, the vast majority (92 percent) have or will adjust salaries twice per year.

Demand for Labor Still High, for Now

U.S. gross domestic product contracted by 1.6 percent in the first quarter of 2022 and by 0.9 percent in the second quarter, as the U.S. Federal Reserve raised interest rates to fight inflation. Two consecutive quarters of slower economic activity is the technical definition of a recession.

Although some economic sectors, such as technology, have seen lower labor demand and even workforce reductions this year, as of mid-2022 the U.S. labor market overall remained tight for many employers and concern about hiring and retaining talent is a key driver of higher pay budgets, cited by 73 percent of respondents as their top factor in the WTW survey.

While attraction and retention challenges continue to plague organizations, fewer respondents expect those difficulties to be at the same level next year: 94 percent of respondents are experiencing difficulties attracting talent this year, but only 40 percent expect difficulty in 2023.

Similarly, 89 percent of companies reported difficulty keeping workers this year, but 60 percent expect those pressures to be lower next year.

Despite concerns of an economic slowdown, however, 46 percent of respondents cited employee expectations for higher increases driven by inflation as pushing pay budgets higher for 2023.

"Compounding economic conditions and new ways of working are leading organizations to continually reassess their salary budgets to remain competitive," said Hatti Johansson, research director for Rewards Data Intelligence at WTW, referring to both inflation and the rise in remote work and hybrid work arrangements.

In addition to raising pay, many companies are taking nonmonetary actions to attract talent. For example, 69 percent of respondents have increased workplace flexibility and 19 percent are planning to do so or considering doing so in the next couple of years.

In light of both a potentially slower economy and continued high inflation and talent supply challenges, "organizations need to get more creative to address attraction and retention challenges," said Catherine Hartmann, WTW's global practice leader for work, rewards and careers.

Another View of 2023 Salary Budgets

According to pay data and software firm PayScale's 2022–2023 Salary Budget Survey, U.S. respondents report, on average, a planned base salary increase of 3.8 percent in 2023. Among some industries, however, base salary increases reported by respondents may surpass 4.5 or even 5 percent for their employees.

These 2023 projections follow similar increase trends from 2022, where the average overall increase came in at 3.6 percent and surpassed 5 percent in some segments.

The survey was conducted May-June of 2022 with responses from 2,021 employers. The data "shows a clear response to the labor market conditions of the last year," according to PayScale's analysts. "The top reason given for higher budget increases in 2023, by 85 percent of respondents, is competition for labor."

Have Pay Pressures Peaked?

New data suggests that wage growth has remained strong through the first half of 2022. On July 29, the U.S. Bureau of Labor Statistics reported that wages and salaries for private-sector workers rose 5.7 percent for the 12-month period ending in June, up from a 3.5 percent increase a year earlier. At the end of the first quarter, the annual increase had been 5 percent.

For full-time hourly employees, the Federal Reserve Bank of Atlanta tracked 5.4 percent hourly wage growth for the 12 months through June.

Relief on rising labor costs may be in sight, however, according to Joseph Briggs, an economist at investment bank Goldman Sachs. He wrote in a July 28 brief that "we expect wage growth to slow going forward," while remaining higher than in recent years.

The firm forecasts that wage growth will slow to 4.5 percent year over year by the end of 2022 and to under 4 percent by end of 2023.

"The firmness in wage growth in 2021 and early 2022 likely partially reflected one-off factors related to the pandemic that are no longer relevant," Briggs noted. Also, the breadth of wage increases has fallen in recent months, and forward-looking wage growth expectations have started to moderate.

Struggling to Make Ends Meet

Other survey data shows that nearly 6 in 10 U.S. workers are concerned their paycheck is not enough to support themselves or their families as employees look to keep up with the rise of inflation.

In an American Staffing Association (ASA) Workplace Monitor survey, conducted June 2-6 among a total of 2,027 U.S. adults age 18 and older, 58 percent of employed U.S. adults said their paycheck was no longer enough to support themselves or their families. The number was higher for Hispanic workers (69 percent) and for parents with children under 18 (66 percent).

As the cost of living increases, workers are looking to change their circumstances. Twenty-eight percent of employed U.S. adults plan to search for a new job in the next six months, while 27 percent plan to start a second job to supplement their income and 20 percent plan to ask for a raise from their current employer.

"Workers are concerned about the effects of inflation, and they're planning on taking action," said Richard Wahlquist, ASA president and chief executive officer. "Employers need to provide competitive compensation and work flexibility, and invest in employees' professional development, if they want to keep and recruit quality talent in this labor market."


Related SHRM Articles:

2023 Salary Budgets Projected to Stay at 20-Year High but Trail Inflation, SHRM Online, September 2022

Wage Growth at Small Businesses Stays Strong, SHRM Online, September 2022

Related SHRM Resources:

Salary Increase Projections 2023 (and 2022), SHRM Express Request

[Need real-time, HR-reported compensation reports? Check out the SHRM Compensation Data Center]





Compensation

Artificial Intelligence in the Workplace

​An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.



Related Content

Kelly Dobbs Bunting speaks onstage at SHRM24
(opens in a new tab)
News
Why AI+HI Is Essential to Compliance

HR must always include human intelligence and oversight of AI in decision-making in hiring and firing, a legal expert said at SHRM24. She added that HR can ensure compliance by meeting the strictest AI standards, which will be in Colorado’s upcoming AI law.

(opens in a new tab)
News
A 4-Day Workweek? AI-Fueled Efficiencies Could Make It Happen

The proliferation of artificial intelligence in the workplace, and the ensuing expected increase in productivity and efficiency, could help usher in the four-day workweek, some experts predict.

(opens in a new tab)
News
How One Company Uses Digital Tools to Boost Employee Well-Being

Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees.

HR Daily Newsletter

Stay up to date with the latest HR news, trends, and expert advice each business day.

Success title

Success caption

Manage Subscriptions
  • About SHRM
  • Careers at SHRM
  • Press Room
  • Contact SHRM
  • Book a SHRM Executive Speaker
  • Advertise with Us
  • Partner with Us
  • Copyright & Permissions
  • Post a Job
  • Find an HR Job
Follow Us
  • LinkedIn
  • Facebook
  • Twitter
  • Instagram
  • YouTube
  • SHRM Newsletters
  • Ask An Advisor

© 2025 SHRM. All Rights Reserved

SHRM provides content as a service to its readers and members. It does not offer legal advice, and cannot guarantee the accuracy or suitability of its content for a particular purpose. Disclaimer


  1. Privacy Policy

  2. Terms of Use

  3. Accessibility

Join SHRM for Exclusive Access to Member Content

SHRM Members enjoy unlimited access to articles and exclusive member resources.

Already a member?
Free Article
Limit Reached

Get unlimited access to articles and member-exclusive resources.

You've reached the limit of 1 free article this month. Join to access unlimited articles and member-only resources.

Already a member?
Free Article
Exclusive Executive-Level Content

This content is for the SHRM Executive Network and Executive Content Subscription members only.

You've reached the limit of 1 free article this month. Join the Executive Network and enjoy unlimited content.

Already a member?
Free Article
Exclusive Executive-Level Content

This content is for the SHRM Executive Network and Executive Content Subscription members only.

You've reached the limit of 1 free article this month. Join and enjoy unlimited access to SHRM Executive Network Content.

Already a member?
Unlock Your Career with SHRM Membership

Please enjoy this free resource! Join SHRM for unlimited access to exclusive articles and tools.

Already a member?

Your membership is almost expired! Renew today for unlimited access to member content.

Renew now

Your membership has expired. Renew today for unlimited access to member content.

Renew Now

Your Executive Network membership is nearing its expiration. Renew now to maintain access.

Renew Now

Your membership has expired. Renew your Executive Network benefits today.

Renew Now