Numerous Employers to Provide Modest Salary Increases in 2023.

Payscale recently released its 2023 Compensation Best Practices Report, which shows that fewer employers plan to offer pay increases in 2023 compared to last year. Only 8 in 10 organizations surveyed said they would offer base pay increases this year, down from more than 9 in 10 last year. Meanwhile, 15% of employers surveyed were uncertain about whether they would offer bigger salaries, up from 3% last year. According to the report, around 6 in 10 organizations experienced labor shortages and difficulty attracting and retaining talent in 2022. However, this may not be as big of an issue in 2023. Evidence shows that although new job postings rose on the job board Indeed last week, they are declining on a month-over-month basis. Total postings growth has also been trending slower, according to Nick Bunker, an economist at Indeed. For those who do receive salary increases, the average overall raise will be lower in 2023 than it was in 2022. Although more than half of employers surveyed said they would offer raises above 3%, those who receive an increase in pay should not expect a significant raise. Employers that do offer salary increases plan to provide an increase of between 4% and 5% for around 1 in 4 of them. Additionally, 12% of employers plan to offer small increases of between 3% and 3.99%, while 8% plan to offer increases of between 3.01 and 3.49%. The report reveals that the average overall raise will be lower in 2023 than it was in 2022. This is a far cry from last year's optimistic forecast when employers were planning to increase salaries by an average of 4.6%, the most since 2007, according to a Willis Tower Watson survey of 1,550 U.S. companies. However, even with these anticipated raises, workers were still not content, according to a separate study from SHRM.