An HR Leader's Guide to Surviving Wage Inflation

Wage inflation continues, even as inflation moderates in other sectors of the U.S. economy. Inflation is the top concern for organizations in 2024, with 74% of HR executives saying inflation is a concern for their organization, according to the 2023-24 SHRM State of the Workplace Report. The Federal Reserve Bank of Atlanta estimated that people who found new jobs in 2023 landed wage bumps of 6.6%—up from 4% before the pandemic.

Fighting wage inflation is a balancing act. Employers must protect their bottom line, but they must also remain competitive in a talent marketplace where 87% of U.S. workers say fair compensation for current employees should be the top priority, according to SHRM research.

To find this equilibrium, employers must understand how every organizational role contributes to their business, Herrera said. Leaders can then compare the costs of each function to its contributions. From there, employers can determine which wage inflation strategies will be most profitable for their business.

This report defines and discusses eight different strategies for fighting wage inflation, along with benefits and drawbacks. It’s up to HR leaders to decide which strategies work best for their business— and implement them as smoothly as possible.