Get ready for bigger paychecks: Record high increases expected in 2023

Employers are planning to increase their salary budgets by 4.6% next year, the highest expected annual jump in 15 years.

Thats according to the latest international survey from consulting firm Willis Towers Watson, which included responses from 1,550 US employers. The survey was conducted from October 3 to November 4.

A large majority of the organizations attributed the big bump to inflation and a tight labor market.

But with headline inflation still at 7.7%, any raise an employee gets below those levels effectively means they will be earning less because their paycheck wont buy as much.

Often what companies expect to pay more for a given year and what they end up paying differs based on market conditions. This year, for instance, 70% of organizations surveyed by Willis Towers Watson said they spent more than they originally planned. Overall, employers ended up spending 4.2% more on salaries this year than in 2021.