You Can Probably Forget About That Pay Hike Matching Inflation
The hottest inflation in four decades has prompted some employers to open the spigot on pay, but plenty still won’t budge -- leaving workers in the lurch with a pay cut.
Nearly 1 in 4 executives said they’re not making any changes to pay in response to inflation, according to a poll by Gartner Inc., an increase from the 18% who said so in December. That reluctance -- fueled in part by expectations that inflation will ease -- comes amid a tight labor market and rising prices for everything from gas to guacamole. More than 6 out of 10 workers are concerned about their salary keeping up with inflation, a survey from the Conference Board found.
“Some companies that had been planning on making that pay adjustment decided not to do it,” Brian Kropp, Gartner’s head of human-resources research, said in an email. “The two most common reasons for pulling back are that they started to believe that inflation would not be as permanent and therefore didn’t need to bake it in, or realized they couldn’t actually afford it given how their financials played out.”
Companies are still doling out merit-based increases but typically aren’t hiking pay based on inflation alone, according to the Gartner survey.
To be sure, wages have risen recently, particularly for lower-paid or hourly roles, and companies of all stripes are expanding their compensation budgets this year. Target Corp., McDonald’s Corp. and Amazon.com Inc. have all boosted their starting or average hourly wages over the past year, while on the higher end of the pay scale, JPMorgan Chase & Co. and Citigroup Inc. have raised junior bankers’ pay to keep them from fleeing to cryptocurrency or fintech startups.