That 4.1% is less than half the headline rate of inflation. The Consumer Price Index, which tracks the prices people pay for goods and services, showed that prices rose 9.1% year-over-year in June — a 40-year high. So for workers who get a salary increase next year of 4.1% or less, they will effectively see their pay cut because their purchasing power will be reduced. (Conversely, in recent years when inflation was below 3%, workers enjoyed higher purchasing power if their raises topped 3%.)

Who exactly will see their pay go up more than average? Just like pay hikes this year, which averaged 4%, “[the money] won’t be spread like peanut butter. … It’s going to be very targeted,” said John Bremen, a managing director at Willis Towers Watson.

By that, Bremen means the most money will go to those filling the roles or demographic groups in highest demand at a company. That could range from hourly, entry-level workers to high-skill jobs such as software engineering or nursing to Gen Xers between the ages of 45 and 54, whose numbers are slimmer than that of Baby Boomers and Millennials.

“Jobs heavily concentrated by those populations may see pay go up disproportionately. It’s [often] hard to attract and retain people in those groups,” Bremen said.

And that may hold true even if there’s a recession and layoffs rise. Why? Because today’s tight labor market is not a temporary thing. While it was exacerbated by the pandemic, it was expected for years thanks to anticipated demographic shifts — such as fewer young workers coming into the labor market and low levels of immigration.

“I have slides from 2013 showing a labor shortage in 2021,” Bremen said.

So it’s reasonable to expect employers will still need to pony up in both financial and non-financial ways to adequately staff their operations and remain competitive.

For example, more than a third (36%) of respondents in the Willis Towers Watson survey said they plan to increase how often they raise salaries, with a majority saying they plan to do so twice a year.