Workers Struggle to Keep Pace With Inflation, Monster Report Finds

In an insightful report that came out last week, Monster revealed that there is a significant disparity between wage growth and the rising cost of living. It was found that an overwhelming 95% of surveyed employees have not kept pace with inflationary pressures. Only 11% reported receiving raises or salary adjustments to counteract the rising inflation.

The financial pressure on today’s workers is gargantuan. A massive 82% have resorted to dipping into their savings to combat daily expenses, with an additional 8% anticipating the need to do so in the near future. In braving the rising inflation, 69% have curtailed non-essential spending, 43% have increased reliance on loans or credit cards, and 41% have stopped contributions to their retirement fund.

Employers aren’t immune either to these economic pressures. About one-third acknowledge that meeting employees’ salary expectations strains their financial resources. Moreover, 42% anticipate difficulties in aligning compensation packages with their future employees’ expectations during the hiring process.

The good news is that recent projections indicate that employers plan to increase compensation and benefits budgets by 3.3% for merit-based promotions and 3.7% for overall salary increments for non-unionized workforce in 2025. This comes at a cost. Many employer-provided health insurance costs are expected to rise by 5.8%, and the projected salary adjustments may not suffice to offset the increased financial strain on employees.

While official data suggests that wages have increased more than inflation (average hourly earnings rose by 4% over the past 12 months compared to a 2.7% rise in Consumer Price Index), employee satisfaction tells a different story. Only 30% of workers reported to being “very satisfied” with their pay, it’s down from 34% in 2023. Among the 29% dissatisfied workers, 80% felt the rise in wages did not keep up with the inflation.

Monster’s 2025 Work Watch Report serves as a canary in a coal mine for HR professionals who must prioritize addressing compensation concerns. Transparent communication regarding compensation structures is the way forward as employers usher potential adjustments to meet rising inflation. HR professionals should engage with workers to understand their financial needs and explore various avenues to provide support, whether through better financial planning of resources or revisiting compensation strategies.

The growing disconnect between wages and the cost of living is a challenge that needs immediate addressal for both employees and employers. As inflation continues to impact daily expenses, it is important for companies to revisit their compensation and benefits strategies to support their workforce.

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