U.S. companies are expecting to pay a 3.4% raise to workers in 2022

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U.S. employers expect to pay an average 3.4% raise to their workers in 2022, according to a Willis Towers Watson survey.

That projected wage growth is faster than actual raises paid in the prior two years, amid a competition for workers and high inflation, according to the poll of 1,004 companies, conducted between October and November.

«Inflation is an element of it, but that's not the sole factor,» said Lesli Jennings, senior director of work and rewards at Willis Towers Watson. «I think the bigger piece is about this race for talent.»

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Companies expect to pay similar average raises across positions, from entry-level to more senior workers, Jennings said.

Job openings in the U.S. are near a record high; a record 4.5 million workers quit their jobs in November, a phenomenon that's been dubbed the Great Resignation.

Ongoing health fears around Covid, as well as other factors such as child-care duties, burnout and higher relative levels of savings amassed during the pandemic, have reduced the number of workers in the labor force, according to economists.

Labor shortages have been most acute for low-paying, in-person jobs — such as bar, restaurant and hotel positions in the leisure and hospitality sector, according to economists.

Employers have increased wages to attract and retain employees amid the demand for labor. About 74% of companies cited the tight labor market as a reason to increase their budgeting for raises, according to the Willis Towers Watson survey.

Fewer companies (31%) cited inflation as a factor in higher estimated pay. The