Companies Are Using This Highly Effective Strategy to Retain Employees Amid Inflation It's simple — but costly.
By Amanda Breen Edited by Jessica Thomas
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With millions more open jobs than there are employees to fill them, many employers have had to sweeten the deal.
To keep top talent, companies have rolled out the biggest pay bumps in decades — and put further pressure on inflation, The Wall Street Journal reported.
Related: 15 Daily Habits That Will Help You Get a Raise
According to Federal Reserve Bank of Atlanta data via WSJ, wages for workers who remained at their jobs spiked 5% in November year over year, averaged over 12 months — the largest gain in 25 years.
And that rapid wage growth is keeping inflation high. In early 2022, prices soared more quickly than they had in 40 years, and although Fed officials expect inflation to slow in 2023, they estimate it will take a few years to hit the central bank's goal of 2% annual inflation over time, per Vox.
The rising cost of living has many employees eyeing alternative opportunities.
"If I can see that the Burger King down the street is offering $22 an hour, and I'm making $20 an hour at the Dunkin' Donuts that I work at, then I know very clearly what my opportunity cost is," Layla O'Kane, senior economist at Lightcast, told WSJ.
Related: 5 Psychological Hacks Smart Negotiators Use to Boost Their Chances for a Pay Raise
Still, many private-sector employees aren't seeing substantial pay growth. Adjusted for inflation, wages declined 3% year over year as of August 2022, per World Economic Forum.
