Inflation: what wage increases in 2022 and 2023?
The average wage increase in France is expected to be 3.1% in 2022 and 3.3% in 2023, according to a survey by WTW.
In the face of runaway inflation and hiring difficulties, companies are being encouraged to reconsider their compensation policies. In France, 35% of them have revised or plan to revise their annual salary increase budget upwards. In addition, 34% want to place more emphasis on non-financial remuneration elements and 30% want to provide additional budgets for needs-based increases, according to the survey by insurance brokerage company WTW*.
In addition, a quarter of French companies (23%) have or plan to increase wages for certain groups of workers, particularly those at high risk of retention (68%), those with rare/critical skills (68%) and the most successful (64%). 6 in 10 companies (59%) also say they want to focus on their lowest paid employees. In addition, 21% plan to adjust salary grids and only 9% consider implementing a second cycle of salary increases.
“To compensate for this loss of purchasing power, companies will rely a little more on collective increases, but also on other collective measures such as the purchasing power bonus,” emphasizes BFM Business Khalil Ait-Moouloud, Head of Compensation Surveys at WTW.
That would mean an average salary increase of 3.1% in 2022, up from 2.3% in 2021, according to the WTW, which notes that “compared to practice over the last ten years, it is a significantly high budget that the should enable companies to remain competitive in order to attract and retain the best talent, but also to “compensate for the relative loss of purchasing power of employees”. At least in part, with inflation expected at 5.5% for the whole of 2022.
For 2023, the revaluations are likely to be even greater: +3.3% on average. Over two years, managers and executives will perform best (+3.1% in 2022, +3.3% in 2023), ahead of employees and technicians (+3% and +3.3%), executives ( +2, 8% and +3.2% ) and employees (+2.8% and +3%).
Higher increases in our neighbors
Since French inflation is lower than in other developed countries, wage increases there are also more moderate. For 2023, companies in the 15 largest economies forecast average growth of 4.9% in 2022 as in 2023, or 0.9 points more than in 2021.
Specifically, average real wage increases in 2022 are expected to reach 4% in the UK, 3.8% in Germany and 3.6% in Spain. For its part, the United States is forecasting an average increase of 4% this year and then 4.1% in 2023.
*Survey conducted in July 2022. 22,400 responses were received from companies in 133 countries. In France, 358 companies responded.