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Compensation is rising, but won’t keep pace with inflation in 2022, according to new surveys and research, with planned raises set to increase salaries just half as fast as consumer prices in the coming year.
Consulting firm Mercer found when surveying 950 employers across industries that companies plan to raise compensation by 3.3% for merit and 3.5% overall. CEL & Associates CEO Christopher Lee, whose salary data and commercial real estate compensation report are closely read by much of the industry, told Bisnow that more than 87% of real estate firms will offer merit increases in 2021, with an average raise of 3.4%.
This might have been one of the best years in recent times for American workers in terms of annual raises, but inflation will erase those gains. Inflation rose more than 6% year-over-year last month, the fastest pace in 39 years, and most experts don't expect it to significantly ease until well into next year.
The discrepancies between the cost of living and compensation come during a difficult period for employees, who feel both overworked and underappreciated amid a talent shortage.
An October study by the Society for Human Resource Management, as reported by HR Dive, found that 52% of workers felt they took on more responsibilities this past year and 55% wondered why they were underpaid. Of those actively looking for a new job, 53% cited better compensation as their main motivation. Many recruiters have told Bisnow that a shortage of talent is making it increasingly competitive to find workers with requisite experience in many key roles in commercial real estate.
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