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This is how much companies want to pay for salary increases this year

Despite the Corona crisis, there is also money for salary increases. This is shown by a recent survey of employers.

Despite Corona

Nadia DI PILLO

Despite the Corona crisis, there is also money for salary increases. This is shown by a recent survey of employers.

Because of the Corona crisis, many companies have to save. Nevertheless, there is also money for salary increases, according to a study by the management consultancy Willis Towers Watson indicates.

Compensation experts asked 23,000 companies from 130 countries what salary increases they had planned for the beginning of the year. 96 organizations in Luxembourg have participated. The result of the “Rapport sur la planification du budget salarial” for Luxembourg shows: Luxembourg companies significantly increased their 2022 wage increase budgets in the second half of last year.

According to the study, the current shortage of talent has clearly led to growing wage pressure. The companies therefore have the planned budgets for salary increases of an average of 2.9 percent in July 2021 for 2022 to 3.3 percent in December increased. “This is a strong increase because it is above the wage increases granted in 2021, which averaged 3.1 percent in Luxembourg,” according to the study.

Labor shortages are a concern

The main factor contributing to wage increases is the labor shortage and the increasing competition for talent. Three out of five Luxembourg companies (60%) say they are concerned about a tight labor market this year.


Economy, Carlo Thelen, Christel Chatelain, 2022 Photo: Luxemburger Wort/Anouk Antony

The director of the Chamber of Commerce criticizes that the costs for companies are exploding. This is particularly dangerous in the Corona crisis.



More than a third (37 percent) said they will be more generous on compensation due to better financial results expected in 2022. Almost a third (30%) of Luxembourgish companies admitted that they are concerned about inflation and rising resource costs and have changed their payroll budgets as a result.

“Labour shortages in some sectors are driving demand for skilled labour, and the surge in growth in other sectors is sparking a race for talent, with companies vying to attract employees,” says Mary Cloosterman-Hughes, Benelux Rewards Data & Intelligence Leader at WTW.

Companies reacted quickly to these changes. In some industries, particularly in the pharmaceutical industry and medical technology, even higher salary increases are to be expected.

Companies want to hire more staff

According to the study, 30 percent of employers plan to hire more staff in the next 12 months, and only three percent expect staff cuts. 53 percent of companies are looking to fill positions in information technology and 47 percent in engineering, while sales (41 percent) and finance (24 percent) are also hot spots.


Economy, Visit Gradel, Ultraleichtbau in Luxembourg, Industry, Technology, Photo: Chris Karaba / Luxemburger Wort

For Luxembourg’s statistics agency, high inflation is not a short-term phenomenon.



Global wage increases are expected to rise 5.1 percent this year, up from 4.7 percent expected through July 2021.

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