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June 09, 2022

Pearl Meyer Data Show More Companies Than Expected Have Increased 2022 Salaries

Almost a quarter of respondents are also planning for mid-year adjustments

BOSTON—June 9, 2022—New survey data released today by executive compensation consultancy Pearl Meyer show that 70% of organizations implemented larger salary increases this year compared to 2021, with 21% reporting “significantly higher” levels. When polled in November 2021, companies expecting larger increases indicated an average of 4.2%. The data show actual implemented increases were even higher than anticipated at 4.8%.

“When we asked similar questions at the end of last year, just about half of the respondents thought they would be implementing higher than normal salary increases and 12% said it would be significantly higher,” said Rebecca Toman, vice president of the survey business unit at Pearl Meyer, and executive sponsor of the new research. “This latest dataset tells us far more companies than expected took action in raising workforce pay, and even those who expected to offer more ultimately gave larger increases than they had planned.”

Respondents indicated the biggest driver behind their decision was concern about retaining employees, followed closely by rising inflation. “Employers are definitely taking these steps to curb the ‘great resignation,’ but they are also taking seriously the pressure employees are facing with the cost of living,” noted Toman.

The survey also indicates 23% of companies are planning mid-year salary adjustments in addition to their annual cadence and an additional 8% are considering the action. “It is very unusual to see so many companies planning a second round of adjustments,” said Toman. “Normally, budgets are set well in advance for an annual rise. This is further indication that a shift is occurring—at least for now—when it comes to setting pay for the established workforce.”

Key Findings

  • 70% of responding organizations reported higher salary increases in 2022, compared to 2021
  • 21% reported “significantly higher” salary increases
  • Of those reporting higher salaries in 2022, 44% said retention concerns were the primary factor for the decision, with 30% noting higher cost of living/rising inflation
  • Data show that percentage-wise, there is very little difference in the amounts granted based on employee category, from executive to nonexempt
  • 23% indicate they are planning for a mid-year salary adjustment process and 8% are considering it

Additional Resources

About Pearl Meyer

Pearl Meyer is the leading advisor to boards and senior management helping organizations build, develop, and reward great leadership teams that drive long-term success. Our strategy-driven compensation and leadership consulting services act as powerful catalysts for value creation and competitive advantage by addressing the critical links between people and outcomes. Our clients stand at the forefront of their industries and range from emerging high-growth, not-for-profit, and private organizations to the Fortune 500.

At Pearl Meyer, we work with boards and organizations to design and implement compensation and leadership strategies that build great management teams.
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