For the last few years, wage growth has been on a tear, with average pay in the U.S. up 8.9 percent in 2021 alone—the fastest growth since the early-80s, according to the Social Security Administration.
But now, as the economy slows, that trend is likely to end—fast—especially among executives and middle managers, according to our latest survey of American CEOs.
A recent poll of 333 CEOs in the U.S., conducted January 10-12 by Chief Executive, finds pay increases among almost every class of worker are likely to slow dramatically in 2023, an abrupt U-turn from recent trends. Compared to 2022, smaller proportions of workers in all seniority levels are projected to see salary increases of 5 percent or more, with companies instead opting to increase salaries at more modest rates, if at all.
According to our research, some 52 percent of middle managers saw a salary increase of at least 5 percent in 2022. That proportion is expected to drop to just 26 percent this year, according to CEOs we surveyed.
Only 20 percent of other senior executives are projected to see a 5 percent or more raise to their salary in 2023, down sharply from the 34 percent who got a raise of that size last year. For front-line and back-office employees, 57 percent saw raises of 5 percent or more in 2022. Just 32 percent can expect a similar gain this year.
This month’s survey is part of ongoing compensation research by Chief Executive Group, which includes our annual CEO and Senior Executive Compensation report, the largest survey of its kind conduced in the United States. It includes pay information from more than 1,800 U.S. companies. Learn more about our compensation benchmarking research >
According to our surveys, two-thirds of senior executives saw a salary increase in 2022, and the proportion for middle managers and front-line workers is even higher, at 88 and 93 percent, respectively. CEOs were the least likely to see a raise in 2022, at only 42%.