US companies give raises to new hires, Wall Street report says
Companies are giving raises to new hires after just weeks on the job, Wall Street reports have confirmed. Companies are reviewing salaries multiple times a year as bosses come to terms with a soaring level of inflation that is causing a global cost of living crisis.
Asset manager T. Rowe Price last month announced a 4% raise for 85% of its employees starting from July 1, according to the Wall Street.
That raise, which is in addition to the company’s year-end salary adjustments, included new hires who had joined the company only a few weeks back, the company’s head of human resources said.
A low unemployment rate has created a competitive labor market that has seen the scales tip in favor of jobseekers.
Some workers are finding that now more than ever, switching jobs results in a larger paycheck. In response, companies are looking to stem employee attrition by accounting for inflation in their pay raises.
US employers had accounted for salary increases of 3.9% in 2022, according to a December report from think tank Conference Board.
However, US inflation recently reached a 40-year record 8.6% in May.
Meanwhile, Pearl Meyer, a compensation consultancy, found that 70% of organizations had implemented larger salary increases this year compared to 2021.
Tech companies have also been forced to up their compensation to entice workers to stay, with Microsoft and Amazon both announcing significant pay raises in the past few months.
