Employers are preparing for big pay raises in 2022

If you have a job, you're probably getting a bigger raise next year.

Base pay may increase by an average of 3.9% in 2022, the largest one-year projected hike since 2008, according to The Conference Board's latest wage survey of 240 companies, the majority of which each employ more than 10,000 people.

The employers were asked how much they projected their wage costs to increase in 2022 for their current workforce. So the 3.9% jump does not include any bonuses or other one-time payouts a company may offer.

Why the big increase? Nearly half (46%) of employers cited the need to offer higher wages in order to attract workers given the labor shortage.

As employers offer new hires bigger salaries, it leads to "pay compression," the Conference Board said. That means the gap in wages between new hires and tenured or higher ranking current employees is narrowed.

"When more experienced workers feel that their pay advantage is no longer significant, they may seek new jobs in the tight labor market, which leads to high labor turnover of more experienced workers," the Conference Board noted.