Wage drift refers to the phenomenon where actual wages paid to employees exceed the wage levels anticipated or agreed upon in collective bargaining agreements or wage frameworks. This increase can occur due to various factors such as market pressures, individual negotiations, or additional compensation elements not initially considered. Wage drift can impact an organization’s budget and planning, as it represents an unplanned rise in labor costs.
For example, if a company negotiates a standard wage increase of 3% for its employees, but individual workers negotiate additional benefits or higher pay based on their performance, the actual wage growth might surpass the original agreement. This excess wage growth beyond the anticipated figures is termed as wage drift.
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