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CEOs plan to raise wages at least 3%: Conference Board
In an effort to attract and retain workers in an unusually tight labor market, 74% of CEOs plan to increase wages by at least 3% in the coming year. Companies across a range of industries are facing challenges due to labor shortages and rising inflation and are taking various steps to reduce costs and increase wages. UPS has cut compensation and benefits and agreed to front-load wage inflation, while TFI International has agreed to a 3% average annual salary increase for five years. ARCO has faced a 6.5% rise in personnel costs, while Cinemark Holdings faced a 12% surge in global salaries and wages. Principal Financial Group is seeing benefits from wage increases and inflation playing through on salary levels, but is also experiencing increased costs due to the war for talent.
What percentage of CEOs plan to increase wages over the next year?
Roughly three out of every four CEOs (74%) plan to boost wages by at least 3% during the next year.
How has the labor market influenced companies' decisions to increase wages?
Companies have faced challenges hiring and retaining workers, and are increasing hourly wages to attract and retain workers.
What strategies are companies using to reduce labor costs?
Companies are using layoffs, technology and other streamlining to reduce labor costs.
What impact have higher wages had on the performance of Principal Financial Group?
Higher wages have buoyed the performance of Principal Financial Group, as it benefits from revenue when inflation plays through on salary levels.
What is the current unemployment rate in the U.S.?
The current unemployment rate in the U.S. is 3.5%.
👍 This article provides an in-depth look into how U.S. companies are responding to increasing wage demands in the tight labor market. It is great to see companies are taking steps to ensure their workforce is fairly compensated.
👎 Despite wage increases, inflation-adjusted hourly earnings have only increased 1.1% in the past year. This shows U.S. companies are not doing enough to keep up with rising costs.
Me: It's about how CEOs plan to raise wages by at least 3% in the next year due to the tight labor market.
Friend: That's interesting. What are some of the implications of this?
Me: Well, it means that companies are facing increasing labor costs due to wage inflation, and they are having to adjust by cutting back on staff, implementing technology, and raising wages. This could lead to higher prices for goods and services, as companies have to pass on the cost of higher wages to consumers. It also means that companies are competing for talent, leading to a “war for talent” where salaries have to be increased in order to attract and retain workers.
- Research the current labor market in your area to determine the current wage rate and the competition for talent.
- Analyze your current compensation and benefits packages to determine if they are competitive in the current labor market.
- Develop strategies to attract and retain qualified workers, such as offering competitive wages, flexible work arrangements, and other benefits.
- Chief Executive Officers - the highest ranking executive in a company or organization.
- Money paid to employees for their work.
- A sustained increase in the general price level of goods and services in an economy over a period of time.
- Labor Market
- The market in which workers and employers interact to determine the wages, hours, and other conditions of employment.
- Labor Hoarding
- The practice of keeping employees on the payroll even when there is no work for them to do.
- A method of collecting data from a sample of people in order to gain information about a larger population.
- The act of competing with others to achieve a goal.
- A person's natural abilities or skills.
- Hourly Wages
- The amount of money paid to an employee for each hour of work.
- A measure of the purchasing power of money that takes into account changes in the prices of goods and services over time.
- The state of not having a job.
- Money received in exchange for labor or services.
- A company that provides temporary staffing services.
- Management Staff
- Employees who are responsible for managing the day-to-day operations of a business.
- Union Wage Rates
- The wages paid to union members for their work.
- The process of using technology to automate tasks.
- TFI International
- A transportation company.
- The process of making a process or system more efficient.
- Fuel Management
- The process of managing the use of fuel in order to reduce costs.
- Miles per gallon - a measure of fuel efficiency.
- Convenience Store
- A store that sells a variety of items such as food, drinks, and household items.
- Cinemark Holdings
- An operator of cinemas.
- Principal Financial Group
- A provider of insurance and manager of retirement assets.