The Great Resignation is showing no signs of slowing down. 4.4 million U.S. workers left their jobs in September 2021 alone. Interest rates are rising at nearly unprecedented levels. And there’s one question on every employee’s mind right now: How will the pandemic and economic uncertainty impact wage increases during 2022?

Resignations have flooded U.S. human resources departments and bosses’ desks for more than six months, leaving businesses desperate to fill open positions in many sectors. Experts believe this is mainly because workers are no longer willing to accept the working conditions and pay they tolerated before the pandemic began.

Elise Gould, an Economic Policy Institute analyst, noted that the pandemic had led many people to reevaluate their priorities and make different decisions in line with what they genuinely want to do.

Safety concerns are also significant, as resignations are highest among frontline workers. Hospitality and food service workers represent a large portion of those who have left their jobs.

With those things in mind, those who remain in their jobs – whether by choice or necessity – are wondering whether their employers will help them financially cope with the impact of skyrocketing interest rates. The cost of consumer goods has risen an average of 6.8% in the last 12 months, leaving many workers feeling financially strained.

With companies struggling to attract qualified, committed employees, those already employed are shouldering much of the burden. It’s not uncommon for a worker to feel like they are doing the jobs of two or even three employees – a situation that can quickly lead to burnout.

Add that to the dramatic rise in the cost of living, and it’s little wonder that workers are looking to their employers to provide higher than average raises.

It’s not hard to rationalize – when companies are using high-starting salaries and jaw-dropping bonus offers to entice applicants, existing employees naturally want to be compensated just as well for the work they’re already doing.

Raises in 2021 did not match the sharp increase in the cost of living – a factor that continues to drive the Great Resignation.

Today, though, employers are looking much more closely at the cost of living increases to ensure that the employees who have helped them survive the pandemic are more adequately compensated.

Pay increase projections in summer 2021 were around 3% – a typical cost of living increase in stable times, but not nearly enough to cover the increased cost of goods and services.

As the effects of the pandemic have lingered, though, half of all firms surveyed by Pearl Meyer say they are increasing their payroll budgets and plan to provide employee raises at an average of 5.2%. Also, 25% of the companies surveyed reported that they planned to offer average raises above 6%.

Are you making decisions that empower your employees and spark their desire to help your organization thrive? Contact our experienced team of human resources professionals today.