Biggest pay raises in 15 years are on tap for 2023

The biggest pay raises in 15 years are on tap for next year, but experts say those raises will not make up for inflation. That's according to advisory firm Willis Towers Watson.

A survey of more than 1,400 U.S. employers found an expected average raise of 4.1% in 2023. But a key measure of inflation, the consumer price index, showed prices rose 9.1% year-over-year in June. That means workers will effectively see their pay cut because their purchasing power will be reduced.

Still, many employees could see their pay increases keep pace with top inflation, once other types of compensation – such as spot or retention bonuses – are added on top of their raise in base pay.

Given the tight labor market, employers are offering a variety of financial incentives to attract and retain workers.