With the cost of living increasing at a pace not seen since Barry Manilow and Rod Stewart were topping the charts, both employers and workers are in unfamiliar territory about how wages should respond to an inflationary economy. Are the days of expecting predictable 3% annual pay increases behind us? This Fast Company article delves into some of the factors to consider. While a recent study by Mercer found that 77% of employers cited compensation as their main driver of turnover, fewer than 25% said they will be making changes to their salary budgets because of inflation, writes Shalene Gupta, a research associate at Harvard Business School and the co-author of “The Power of Trust: How Companies Build It, Lose It, Regain It.” “Meanwhile, corporate profits are the highest they’ve been in 70 years,” Gupta wrote. “Given that we’re also in the midst of the Great Resignation — where record numbers of employees are leaving their jobs — why aren’t more employers raising wages?”