KPMG dishes out up to $7K raises as inflation concerns linger
Professional services consultancy KPMG is raising the salaries of all of its employees by $3,000 to $7,000 just three months after dishing out raises of 10% or more.
Why it matters: It reflects an escalation of the war for talent in an environment defined by inflation and labor shortages.
Details: KPMG said Tuesday it would spend $160 million on mid-fiscal-year raises after already hiking pay and cutting health care costs by 10% in November.
- The company has experienced “more attrition than we would have wanted” during the pandemic, KPMG U.S. CEO Paul Knopp tells Axios. But it has also hired more workers than it's lost, he says.
Context: Companies are facing pressure to raise wages with inflation hitting a 40-year high of 7% in 2021.
- “As we thought about the continuing inflation in the market — and we hope that some of it is transitory, but some of it is clearly not transitory — the needs of our employees were paramount in our mind,” Knopp says.
But, but, but: Wage raises are contributing to inflation, which Knopp acknowledges.
- “There’s no doubt that increases in compensation in every industry are leading to ... pricing power in the market for many of our clients,” he says. “That is just one of the consequences of what we’re all facing.”