Remuneration Trends & Insights. While pay is a driving factor for many workers, it is not the only one. Employers are budgeting an average of 3.8% for merit increases compared to the 3.4% actually delivered this year and 4.2% for their total . March 2021: US Compensation Planning Pulse survey results - imercer Theres one thing certain about the future of work: unpredictability. Review statutory and supplemental benefit details for social security, retirement, medical, death, disability and more. Employers are budgeting an average of 3.8% for merit increases compared to the 3.4% actually delivered this year and 4.2% for their total budget increase for 2023. U.S. employers 'again' boosting 2022 pay raises, WTW survey You may access your survey submission at any time to make updates. That's a far cry from just a couple of years ago. Follow Mercer on LinkedIn and Twitter. Likewise, we are seeing an increase in the total increase budget for 2023: 4.2% for 2023, compared to 3.8% in 2022. From that lens, we are seeing that salaries across the board have increased 4.0%, but there are some significant differences by industry. As for the percentage of the total base salaries that are set aside for promotions, this year participants indicated that they budget 1.3%, which is slightly higher than this time last year. If you experience any issues accessing your survey, please contact us. If your company runs on a calendar financial year, then its likely that you are putting together the numbers and justification for annual increases, structure adjustments, and other critical compensation management elements. Salaries for U.S. employers could lag behind inflation in 2023, according to a new survey from Mercer. Revised 2022 Salary Increase Budgets Head Toward 4% - SHRM 2022 by Mercer that polled 636 organizations across 15 industries in Thailand between April and June this year. For most employers, cost of living increases are a thing of the past. U.S. employers boost projected salary increase for 2023 For example, some companies have been considering stipends or allowances to help workers combat the rising gasprices. Share. Recession fears dont seem to be impacting increase budgets, Employers are increasing pay outside of the annual cycle. As a result, forecasted increases are likely understated to actual total increase practices by as much as 25-33% of the overall budget. Organizations are generally split between those who include vs. exclude promotions, internal equity adjustments, market adjustments, key contributor increases and other off-cycle increases in these projections. Recruitment efforts are expected to increase in 2022, with more than three in 10 companies on an average intending to add headcount with another third undecided, compared to less than two in 10 in 2021. And the Workspan Podcast offers timely insights from experts in a . This Video is unable to play due to Privacy Settings. The projected salary increments reflect guarded optimism as Thailand's Gross Domestic Product (GDP) is expected to grow by 3.8% in 2023, the highest in . You are using a browser version that we do not support. Employers reported they are budgeting an average of 3.8% for merit increases compared to the 3.4%1 actually delivered in 2022 and 4.2% for their total increase budget for 2023. As you plan your compensation strategy and total rewards program, youll want the latest data-driven insights about the labour market. To find out what creative approaches you can be taking, contact us here. Ensure your incentive programs are competitive. More than 72% indicated their budgets are finalized between October and January, with most selecting November or December. Now part of the Mercer QuickPulse TM survey series to give you the latest insights in compensation planning and total rewards. We are seeing markets that have kept COVID-19 under control reporting higher than average pay raises. Need compensation planning data in US? This, combined with a strong job market, has heightened employee expectations for increased compensation this year; and employers are responding. Mercerbelieves in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Salary increase percentages for 2022 are higher than prior year across all industries and markets in the region, with some even above pre-pandemic levels. Mercer compensation data reveals US employers are struggling to keep up The survey, conducted between October and November of 2021, looked at 1,004 U.S. companies and found that nearly 1 in 3 respondents (32%) had bumped up original salary increase projections from . To be considered a participant, confirmation of the data is required in each edition, even if your data has not changed. By participating in the survey, you will automatically receive the results for free when they publish. Senior Principal Kurt Groeninger talks about creating the foundation for your ESG strategy by setting up the right infrastructure for your organization. Welcome to the Workspan Family of Content | WorldatWork Slightly higher than the pre-pandemic levels, the projected salary increments reflect a faster and stronger economic rebound when compared to the Global Financial Crisis, with real Gross Domestic Product (GDP) growth expected to increase by 5.1%2 in 2022. According to Mercers US Compensation Planning Survey, the average 2022 merit increase budget is 3.4percent, with total increases (including other types of base pay increases, such as promotional awards) reaching 3.8percent. We continue to stand at a crossroads in the world of work. There are several findings that are worth noting from our survey of global practices. This would lead us to believe that although they are providing off-cycle increases, inflation is not the driving factor. While a majority of organizations are reporting little change in their base salary administration processes vs. pre-pandemic, there is a higher percentage of organizations utilizing: Increased use of select cash compensation programs in the new war for talent. Most organizations address gaps in competitiveness over time through merit budgets, but the current labor market warrants a more aggressive approach to market adjustments to ensure that pay is competitive for all employees not just in aggregate. Looking back over the last two decades, inflation has been low most commonly between 0 and 2 percent, while merit budgets have remained relatively stable at around 3 percent. The most increased focus is in the following areas: The results of this survey show that as salary increases stall, employers will need to get creative about non-cash rewards to retain and engage employees. This would lead us to believe that although they are providing off-cycle increases, inflation is not the driving factor. However, there is some variation by industry: In order to accommodate the increasing annual increase budgets, salary structures are increasing as well. An email notification will be sent to participants once access has been granted; this email will contain instructions on how to access the results. Top-performing individuals can be enticed with multi-year bonuses or lump sums to reflect current market premiums. The survey found that no employers are currently planning to freeze pay in 2023. First off, use this as directional information and combine it with additional sources. With remote work here to stay, employees can cast a much wider net in their job searches than when they were limited by geography. Workspan. Bolstering the financial health of your employees can be accomplished through channels other than simple wage increases. Asia, 21 December 2021 - Companies in Asia Pacific are forecasting a median 5.4% increase in overall salaries for 2022 amid uncertainty as economies start to reopen, compared to 5.1% in 2021 and 4.8% in 2020, according to Mercer's latest Salary Movement Snapshot Survey 1. We use cookies to improve your experience. How will you use this information to develop your proposal, knowing its preliminary? Despite knowing this, we have continued to ask survey participants to give us their budget projections in August, largely because, well, clients and consultants alike are used to survey vendors publishing budget numbers at this time of year. However, with teams spread across a country or globally, employers need to overcome key challenges in fostering a sense of organizational values and processes. US employer salary projection 2023 to lag inflation - Mercer When it comes to total rewards, DEI can mean an inclusive benefits package: forward-thinking employers, for instance, are beginning to offer fertility and surrogacy benefits to same-sex couples, and support gender affirmation surgery. Of the 55% that plan to adjust structures in 2023, we expect to see the structures increase by 2.8%, which is just above the average actual adjustment of 2.2% reported in March of 2022. Engaging articles centering on business issues our clients have tackled. While wage increases are on the horizon in almost every industry, employees are looking for more than just financial compensation for theirwork. If you would like more details on the Mercer QuickPulse or US Compensation Planning Survey please contact us at 800-333-3070. How much larger will increase budgets be for 2023? Across the industries surveyed, the Chemicals industry is expected to see the biggest rebound in salary increment at 5.5% in 2022, up from 4.9% in 2021. Salary Projections to Lag Inflation: Mercer Take an inclusive approach to benefits. Most organizations globally are reporting an uptick in their median total salary increase budgets for 2022 vs what they had planned in 2021. Just as important, however, is ensuring that your organizational culture is one that actively seeks out this kind of feedback, welcomes it and, most importantly, acts on the findings. While inflation has had limited impact on compensation planning in recent history, it can play a larger role outside the US, where countries are more likely to experience hyperinflation or persistent and sustained high inflation as part of their economy (e.g., Turkey and Argentina in recentyears). But its also the little things, like paying attention to what food is served in the office, what music is played at corporate events, and ensuring that everyone, at every level, is respected. The Video could not be loaded because the privacy settings are disabled. 2022 pay rises to exceed inflation rate: Mercer - TR MONITOR Retail and Wholesale, along with Mining and Metals, on the other hand, tend to be a bit more conservative at communicating grades/bands than other industries. Organizations should use this and other salary increase projection information directionally and engage leaders in a discussion focused on internal needs and objectives vs. over-indexing on external market data. Salary increments for 2023 back to pre-pandemic levels as Malaysia Individual performance is still the most common factor that employers use to determine the size of an individuals annual increase. Across industries, Financial Services is leading the market at 4.0% merit and 4.7% total increases. In 2020 when the pandemic began, Fusco adds, just . A separate Grant Thornton survey of 1,500 full-time U.S. employees found that 51% would give up a 10% to 20% salary increase . This reality tends to advantage employees in terms of real spending during low . Not only can doing so enhance retainment, it can also save your organization money in the longrun. The UK has gone from 2.5% to 3.0% (from the middle of 2021 to now), Australia from 2.4% to 3.0%, Brazil from 6.1% to 7.4%, Turkey from 18% to 30%, Ukraine from 6.5% to 10.3%, and Russia from 5% to 7.5%. Employers plan 4.1% pay raises for 2023 - HR Dive Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Its hard to say. For example, Life Sciences, High Tech and Other Manufacturing are all showing base pay changes over 5.6%, while Healthcare and Insurance/Reinsurance are coming in under 2.7%. When it comes to compensation decisions, employers are caught in the middle of recessionary concerns, a tight labor market, and shifting employee expectations due to inflation. Slightly higher than the pre-pandemic levels, the projected salary . We were prompted to initiate this survey when it became increasingly clear from our clients toward the latter part of 2021 that early compensation increase projections for 2022 may no longer be relevant. The US Compensation Planning Survey includes data from more than 1200 US organizations of varying sizes across 15 industries. Heres our take on 3 ways organizations should face the unexpected and thrive. Contact Us. According to Mercer's US Compensation Planning Survey, the average 2022 merit increase budget is 3.4 percent, with total increases (including other types of base pay increases, such as promotional awards) reaching 3.8 percent. 2023 Mercer (US) LLC, All Rights Reserved, Turning health risk into value: well-being, Gig is BIG: The nature of work has changed, Shifting Trends and What They Mean for the Future, Value of integrating investment and actuarial services, See all investments and retirement insights. While wage increases are inevitable, there's more to the solution. Employers are responding by developing DEI policies, all with the goal of making their organizational culture feel more welcoming to people with a wide range of backgrounds. Start by examining your organizations work-life balance, opportunities for internal promotions and benefits packages. It can be difficult to keep up with relevant compensation trends and how they impact your organization. Pay trends to expect in 2022 - WTW - Willis Towers Watson Salary increments to surpass pre-pandemic levels, says Mercer This is our annual Compensation Planning Outlook for 2022. Even though recovery is uneven across the region, companies are showing renewed business confidence as well as getting used to working with the pandemic and this is reflected in the rebound in salary increments.. BY Jim Wilson 19 Jul 2022. The Healthcare industry is lagging behind the market at 3.3% merit and 3.6% total increases. Participants will receive a complimentary executive summary report of the results! Lets dive a little deeper into some of these trends in compensation planning. A competitive leave policy is a benefit to everyone. In February this year, services firm Aon revised its salary increment trend to 9.9% versus an average of 9.4% that it had forecast in September 2021. By partnering with Korn Ferry, Keystart has begun to act transparently on employee feedback, leading to enablement and engagement throughout the business. Given the financial uncertainty that currently exists combined with the tight labor market, employers should consider setting flexible budgets and prioritize investments in critical and fast-moving segments, such as their hourly workforce," said Lauren Mason,Senior Principal in Mercer's Career practice. Employers must increase focus on pay for skills across the employee life cycle that is aligned with overarching rewards and talent strategies to future-proof their workforces for whatever upheavals that may come.. 2023 Mercer (US) LLC, All Rights Reserved, About Mercers US Compensation Planning Survey, Turning health risk into value: well-being, Gig is BIG: The nature of work has changed, Shifting Trends and What They Mean for the Future, Value of integrating investment and actuarial services, See all investments and retirement insights, 2022 US Compensation Planning Survey, March edition, Analysis of Mercers 2022 Mercer Benchmark Database. except for those from the High Tech industry, can also expect higher bonus payouts this year, based on Mercer's mid-2022 forecast. These include: Increased utilization of select non-financial reward programs. Our whitepaper analyzes some of the big trends for 2022, such as improving employee wellness and leveraging remote work in your strategies . Its hard to say. Evaluate IT position salaries with this in-depth survey. India (9.4%) has the highest salary increase in 2022, followed by Vietnam (7.4%) and Indonesia (6.7%). Mercer, an American asset management firm, projected an increase of 9% in salaries across industries in 2022. But whats the difference between tolerable stress and toxic stress? Companies turn to off-cycle salary adjustments | Mercer ASEAN This survey digs into the why and how of talent global mobility programs within your company's overall strategy. As it stands today, 44% of organizations do not communicate any information regarding an employees current compensation grade or band, and only 21% of employers make available compensation bands for all jobs outside the employees current role. These products are all included in Talent All Access Portal+, but can also be purchased separately. Be a part of our global team dedicated to building brighter futures for employers and their people.