Companies, instead, continue to use bonuses and benefits to keep workers from jumping ship.
Though companies are bemoaning the tight labor market, they’re stopping short of a reliable reward for stalwart employees: a generous raise. A recent PayScale survey of over 7,000 employers found that 70 percent of companies are sticking with increases of 3 percent or less.
“It can be disappointing to feel like you’re constantly getting a 2 or 3 percent bump that barely feels like it’s keeping pace with inflation,” said Lydia Frank, the VP of Content at PayScale. “Especially when we’re in a robust economy and talent market.”
Employers say their more concerned about retention this year than any other in the past decade, according to the survey. But those fears haven’t pushed up compensation budgets. The 3 percent number has held steady in recent years, despite the economic recovery.
Companies, instead, continue to use bonuses and benefits to keep workers from jumping ship. A record share of companies told PayScale they plan on offering paid family leave, remote work policies, and unlimited paid time off. The hot labor market has led to more benefits for more workers, in general.
“There’s been a lot of discussion around why the wage increases have been so soft over the last few years,” added Frank. “There’s concern that a recession might be in our future in the next couple of years.”
Only a small number of top performers will get significant raises. About five percent of companies surveyed said they’d given at least one employee a 30 percent raise, or higher.