These companies are giving some workers mid-year raises

Big corporations are biting the bullet this summer and are giving increases to retain their employees and help them cope with inflation.

The average salary increase is 3% per year, usually between January and April. But rising inflation, high gas prices and a tight labor market is creating conditions that justify out-of-cycle and larger-than-usual wage increases for workers.

A recent survey of labor force trends found that about two-thirds of employers increased their compensation budgets from January to June, according to Gallagher, a consulting firm.

“Inflation and the impact it has on the cost of going to work, feeding a family, keeping the lights on, is driving the conversation about wage increases,” said Scott Hamilton, a human resources expert at Gallagher. “Companies are having talks about pay raises, gasoline gift cards, reimbursement of travel expenses to make sure the workers needed to keep the services running show up.”

Rises for all strips of workers

Gas company ExxonMobil, technology company Microsoft, investment firm T. Rowe Price and retailer Walmart are among the big corporations that have recently increased workers ’compensation and benefits.

In April, ExxonMobil expanded a program that gives shares to high-performing employees, doubling the number of workers receiving shares. And in June, Exxon gave its U.S. workers a one-time cash payment equivalent to 3 percent of their salaries, a spokesman said in a statement to CBS MoneyWatch.

Microsoft doubled its overall budget in May for merit-based salary increases. “This increased investment in our global compensation reflects our ongoing commitment to providing a highly competitive experience to our employees,” a Microsoft spokesman told CBS MoneyWatch.

T. Rowe Price also sweetened offers for workers, offering most of his global staff wage increases of 4% before July 1 “to reward their commitment and ensure we remain the preferred employer.” a company spokesman told CBS MoneyWatch.

More than 85% of the company’s workforce received these salary increases in addition to the usual salary increases, which went into effect earlier this year. T Rowe Price cited labor market conditions and inflation trends as factors that influenced the abnormal wage increases.

In mid-June, Walmart announced higher salaries for more than 36,000 pharmacy technicians by increasing their average hourly wage to more than $ 20 an hour.

“Perfect storm” of conditions

A June survey by Pearl Meyer, which advises employers on compensation, found that in 2022, companies increased workers ’wages by an average of 4.8%. The higher-than-usual increase was driven by a “perfect storm of record inflation, high turnover rates and labor shortages,” the survey concluded.

About a third of the organizations surveyed by Pearl Meyer said they are considering or planning little-used mid-year increases for best results.

“It’s amazing because historically it’s been pretty weird to see wage increases in the middle of the year,” said Rebecca Toman, Pearl Meyer’s vice president of surveys.

Toman predicted that mid-year increases will only be granted to top employees and critical employees. “We’re going to see increases in the middle of the year, but not everyone will be eligible.”

Most of the organizations surveyed said the highest increases in 2022 were caused by retention concerns and rising cost of living amid rising inflation.

“Inflation is definitely a problem right now, but there is also a shortage of manpower and insufficient talent in many areas,” Toman said.

Inflation has accelerated to 8.6% in the last 12 months, the highest rate in 40 years, and continues to outpace most wage increases. An exception: low-wage workers in industries such as hospitalityretail trade and health care, whose wages have risen at an even faster rate.