Groceries. Gas. Rent. Dining out.

With everything literally getting more expensive, you are going to need a big raise in the new year to keep up with the rising cost of living.

According to four surveys of US employers, you are probably not going to get one.

The surveys were conducted by the country's top providers of compensation data, and showed that most companies are planning salary increases for 2023 that won't even come close to matching inflation, which currently stands at 8.3%

Employers plan to increase their salary budgets by an average of 4.1% next year. Most employees will see their earnings shrink the next year, after adjusting for inflation, you will work just as much but your salary won't buy much.

"I'm super concerned about real wage loss," says Kent Plunkett, the CEO of Salary.com. There are a lot of companies that haven't woken up to what is going on.

Unlike the federal government, which automatically adjusts the Social Security payments based on the Consumer Price Index, most companies don't factor inflation into decisions around salaries. Instead, they look at the cost of living, while compensation professionals look at the cost of labor. By benchmarking salaries at their companies against those paid by others, they make sure their pay packages remain competitive relative to the market. Salary planning becomes a game of corporate chicken: Employers base their decisions on what everyone is doing.

In 2021, consumer prices shot up and employers were caught off guard. The 3% raises that they were used to giving out were no longer enough to keep up with the cost of living. They weren't sure whether the surge in inflation was temporary or a pandemic blip. Salary increases are sticky because most companies never cut base salaries, which means pay bumps are virtually impossible to take back — the only way to undo a bloated payroll is by resorting to layoffs.

The conservative approach to raises is why wages and salaries have failed to keep up with the cost of living for FIVE quarters in a row. According to the Bureau of Labor Statistics, the decline in real wages in the first half of this year has marked the biggest drop in over two decades.

To win bigger raises, employees have resorted to switching jobs in the Great Resignation. The job market has gotten so hot that the only way companies can attract new hires is to offer them salaries that are far higher than the ones they pay their existing employees.

Low raises mean more job switching. Many companies admit they are in a bind when it comes to raises. Inflation means their own costs — whether for supplies and transportation or energy, and borrowing is soaring. If they raise wages and salaries, which represent the biggest expense for most employers, they will have to raise their own prices to foot the bill.

This would drive down demand and leave them in a lethal spiral of soaring costs and declining revenue. Some industries, like healthcare, are planning to dole out lower-than-average raises of about 3% next year, reflecting on the razor-thin margins that hospitals are already operating on.

No one can lose a third of their employees each year and still 'prosper' as a company. It doesn't work like that. The cost to replace an employee is so high and can take anywhere from three to 12 months of pay to replace an employee.

In light of all this information, instead of just quitting your job, you can also try and angle for things like one-time bonuses, higher equity rewards, and expanded benefits and perks, as even a little bit of improvement helps!