Many companies are doing summer pay increases to keep up with competitors and the demand of inflation. Exxon Mobil Corpgave their U.S. employees a one-time payment increase in June equivalent to 3% of their salaries just to keep up with the demand. However, it isn’t just the large corporations that are seeing the need for adjustments mid-year. Small companies are feeling the impact as well. What does this mean for you? Here are a few things to look out for when it comes to reviews, inflation, and how to plan for what comes next.
Inflation and Mid-Year Reviews
Employees are struggling to keep up with the increased cost of gasoline, groceries, rent, and other daily expenses. Employers recognize that higher pay is needed. In recent findings from The Wall Street Journal, more organizations are offering midyear raises and bonuses to retain employees. An example provided by SHRM shows how organizations are shifting:
▪PricewaterhouseCoopers LLPraised pay 5 percent in January and said it will again hand out raises in July.
▪T. Rowe Price Groupgave about 85 percent of its workforce a special4 percent raise effective July 1. The financial services firm employs more than 7,500 full-time staffers.
▪Exxon Mobil Corp. gave U.S. employees a one-time payment in June equivalent to 3 percent of their salaries. The bonus payments came outside of the company's typical annual review cycle.
▪Microsoft Corp. told employees this spring it planned to nearly double its global budget for merit-based raises.
Planning for Continued Inflation Surge
According to SHRM, Adding more pressure on employers to raise wages, consumer prices rose 9.1 percent year over year in June 2022, a new 41-year high, the U.S. Bureau of Labor Statistics (BLS) reported in July. Inflation has grown sharply since late 2021. As an employee, you could potentially see more-frequent pay increases to keep up with inflation. To counteract the deeper bite consumer prices are taking from workers' paychecks, some companies are forsaking annual pay raises and, instead, reviewing workers' pay rates more often as they compete for talent, The Wall Street Journal reported in February.
Companies should internally prepare to keep up with demand from employees if they haven’t yet. Creating a process, updating review schedules, watching the market, and communicating with employees is the best way to prepare for success long-term. If employers can’t increase salaries or hourly wages, one-time bonus payments can show support and recognize the need to keep up with inflation.
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