Companies Step Up Pay Raises to Compete
The demand for U.S. workers has led some manufacturers, technology firms and other employers to ditch the annual raise and switch to more frequent pay reviews as they compete for talent and keep pace with rising wages.
CoorsTek Inc., a maker of industrial ceramics, last year started doing quarterly pay reviews, primarily to ensure it could hire and retain workers for critical and hard-to-fill manufacturing roles such as production operators and maintenance mechanics. The Golden, Colo.-based company hired around 1,300 people in the U.S. last year, and bringing on new people often meant paying above its usual ranges.
“When the market is evolving in real-time and there really isn’t a leading indicator other than what you’re seeing to compete and hire, you quickly have to adjust,” said Irma Lockridge, the chief people officer at the 6,000-person company.
U.S. companies and small businesses are competing for employees in a historically tight labor market. Employers added 6.7 million jobs last year, yet U.S. job openings and worker turnover are hovering near their highest levels on record. Those trends are spurring wage growth. Wages climbed 5.7 percent in January from a year earlier, government data show, nearly double the average gain before the government imposed COVID restraints on the economy.
Full off-cycle salary reviews remain relatively rare, surveys show, and executives say companies can turn to other options, such as using one-time bonuses, expanding benefits or adding vacation days, to help retain workers without boosting wages.
Some executives have announced across-the-board pay increases during routine all-hands sessions, surprising workers.