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featured image showing a charge of inflation rising in 2022

Companies Use Supplemental Offerings While Inflation Rises

With the increase in inflation and costs of products on the rise, businesses are in a bind. A reconsideration of how much the cost-of-living pay raise should be in 2022 is looming. Many companies are spending more than ever on products or services needed for their companies to produce and it isn’t projected to get any better. It’s likely that the extra money spent is digging into the funds set aside for the cost of living pay raises. Many companies are using supplemental offerings to bridge the gap.

What’s Happening Now

Consumer prices rose 7 percent in 2021, the largest 12-month increase in nearly 40 years, the U.S. Bureau of Labor Statistics (BLS) reported on Jan. 12, adding pressure on employers to raise wages more than they anticipated this year. The latest figures show that inflation continues to grow. The consumer price index (CPI) had risen 6.8 percent in November 2021 from a year earlier and was up 6.2 percent in October year-over-year. As consumer prices rose, real (inflation-adjusted) average hourly earnings fell 2.4 percent, seasonally adjusted, from December 2020 to December 2021.

In other inflation findings, the producer price index (PPI) rose 9.7 percent in December, up from a 9.6 percent in November after an 8.8 percent increase in October.

What it Means for Employers

Employers have been forced to adjust their salary budgets as pay pressures escalate. While most estimates for salary budget growth in midyear 2021 were in the 3 percent to 3.3 percent range, near the end of the year consensus expectations were closer to 4 percent.

Inflation and the tight labor market mean employers may need to raise pay more than they expected. Happening in conjunction with inflation is the lack of labor available. The pandemic toppled labor force participation, and Baby Boomers are retiring. According to an article in Forbes, labor shortages can be expected over the next decade. Forbes Source. Employers need to hang on to their employees. They really can’t risk losing employees. But, what if they can’t afford it? Many are using supplemental offerings to bridge the gap.

Supplemental Offerings Bridge the Gap

Not all employers can give the 4% pay raise that is expected. To bridge the gap, many are providing supplemental offerings. Supplemental offerings include sign-on bonuses, stock awards, and enhanced recognition programs. On top of that many employers are putting more emphasis on employee experience. Offering enhanced career-advancement pathways, learning, and reskilling opportunities, Recruiting and retaining top talent today requires employers to be creative and comprehensive with their offerings.

Need assistance? Contact the experts at HRinDemand, your total people solution. Check out: Modeling the Elusive Work-Life Balance

Melissa Marsh, SPHR, SHRM-SCP, is a human resources consultant and founder of HRinDemand, a human resources company in Reno, NV, offering expert guidance and easy-to-use tools to help small businesses with employment regulations, compliance, employee relations, and company growth.


Stephen Miller, CEBS. “Inflation Rate Hits 7% Year-over-Year, Driving ‘Real’ Wages Down.” SHRM, SHRM, 14 Jan. 2022, https://www.shrm.org/ResourcesAndTools/hr-topics/compensation/Pages/inflation-rate-hits-7-percent-year-over-year-driving-real-wages-down.aspx?_ga=2.45134755.681293939.1642172849-623760249.1642172849.