With 11.3million job openings, employees have options. As you plan your compensation strategy and total rewards program, you'll want the latest data-driven insights about the labour market. Notably, when asked what they were doing to offset market inflation for their employees, only 38% indicated that they would provide an ad hoc off-cycle wage review and/or adjustment, while a similar percentages indicated that they were not planning to do anything. Download now to learn about all these trends in compensation strategy and more as the new normal continues to evolve. Developing a compensation strategy for remote employees will be central to their long-term retention. We have seen this manifest through an emerging shift in approach to compensation setting for low wage workers. 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%. Under the 'Manage Cookies' option in the footer, accept the Functional cookies to allow the video to play. US salaries are going up, but compensation budgets for next year and salary projections are expected to lag inflation, according to the "2023 US Compensation Planning Survey" released by Mercer. The tight labor market with high numbers of job openings, low numbers of unemployed workers, and heightened turnover may force employers to respond. Simply revisit the survey and click the submit button to confirm previously entered data. Employers are increasingly using off-cycle increases to combat retention concerns, along with other issues. And a quarter of employers plan to give increases in the range of 5%-7% in 2023. Through its market-leading businesses including Marsh,GuyCarpenterandOliverWyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. This snapshot survey is conducted four times per year and provides up-to-date salary increase budget data for 100+ markets across the globe. US Compensation Planning Survey & Compensation Data | Mercer Most employees today see compensation as a blackbox and dont understand how their pay is set. With the potential for price hikes to be temporary, employers may alternatively consider lump sum awards to offset rising prices. And of course, the reason is the tight labor market. For example, the US median increases have risen from 3.0% (during the middle of 2021) to 3.5% (as of now). From that lens, we are seeing that salaries across the board have increased 4.1%, but there are some significant differences by industry. Beyond budget numbers, we have recently started looking at the per capita increase, which is simply a calculation of the change in total salaries from one point to another divided by the number of employees. Excluding companies that have implemented wage freezes, it is a 1.2% improvement from 5.3% this year but still below the 6.9% in 2019. Mercer is a business of Marsh McLennan (NYSE: MMC), the worlds leading professional services firm in the areas of risk, strategy and people, with 81,000 colleagues and annual revenue of over US$19 billion. Aon Survey projects 9.4% avg salary increment in 2022, up from 8.8% in Be a part of our global team dedicated to building brighter futures for employers and their people. The typical practice is a 1.5X difference in increase percentages between these performers (e.g, an outstanding performer receives a 4.5% increase vs. a competent performer receiving 3.0%). This survey digs into the why and how of talent global mobility programs within your company's overall strategy. Employers' compensation budgets are set to rise 3.3% for merit budgets and 3.5% for total budgets in 2022, a survey by HR consulting firm Mercer found a slight increase from the 2.8% merit and . The Federal Reserve has already begun taking aggressive action for this to happen. Salary projections to lag inflation: Mercer Currently, employers are projecting a salary increase of 4.1% for 2023, slightly up from the 4% actual increase employees got this year. Participate to get your free snapshot report! The projected increment is higher than the pre-pandemic levels of 2019 by 50 basis points. Slightly higher than the pre-pandemic levels, the projected salary . First look at increase budgets for North America. 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. Take a proactive approach to managing your workforce in a competitive job market. In summary, wages are going up, but inflation is not the trigger. Resources: Leading in the New Shape of Work. 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 in France, Russia, India and South Korea are all forecasting . Mercers approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. This Video is unable to play due to Privacy Settings. 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. Worldwide Benefit & Employment Guidelines, Salary increase budgets for 2023 provide updated amounts if they have changed, Salary increase budgets for 2024 provide updated amounts if they have changed. Actual and projected pay increase data at the city and national levels. Please use one of these supported browsers to ensure the best experience on this site: Participate to get the latest salary increase budget data! Participate to receive a free country report for all markets where you provide data! Our whitepaper analyzes some of the big trends for 2022, such as improving employee wellness and leveraging remote work in your strategies . Compensation budgets to rise slightly, but won't keep pace with Participate by February 3 | Results publish early March, Participate by May 5 | Results publish early June, Participate by August 11 | Results publish early September, Participate by November 17 | Results publish mid December. Weve combined annual compensation survey data and recent rewards and benefits pulse surveys to provide anticipated salary increases for 2022. Employers plan 4.1% pay raises for 2023 - HR Dive Follow Mercer on LinkedIn and Twitter. Discover whats next in the world of rewards from Korn Ferrys Client Partner, Ben Frost. Explore Mercers latest thinking to see how were helping to redefine the world of work, reshape retirement and investment outcomes, and unlock real health and well-being. Regardless of the compensation increase figure you look at, none are rising near the level of inflation creating much angst foremployees. Heres our take on 3 ways organizations should face the unexpected and thrive. To be considered a participant, confirmation of the data is required in each edition, even if your data has not changed. 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. To find out what creative approaches you can be taking, contact us here. Salary increments on the rebound to pre-pandemic levels - Mercer The last remaining legacy of this historical practice is reflected in some labor contracts and collective bargaining agreements where wage increases remain indexed toCPI. In March 2022, only 38% indicated that they were providing off-cycle increases, but in this pulse survey, 64% of participants report that they provide off-cycle increases. Increases are forecast at 2.8 per cent, excluding freezes, nearly identical to the 2.7 per cent increase recorded in 2019. Scroll down for more information on this survey. Mercer is a business of Marsh McLennan (NYSE: MMC), the worlds leading professional services firm in the areas of risk, strategy and people, with 83,000 colleagues and annual revenue of approximately $20 billion. Its a mind-boggling number when you think about it: Half a trillion dollars on airport projects over just a few decades. For example, the US median increases have risen from 3.0% (during the middle of 2021) to 3.5% (as of now). 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. Lastly, take the opportunity to become more transparent around pay. Plus, why CEOs are losing confidence in their direct reports. Now part of the Mercer QuickPulse TM survey series to give you the latest insights in compensation planning and total rewards. 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. 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. Salary Projections for 2022 - McConnell Consulting Inc. This Video is unable to play due to Privacy Settings. This is according to the annual Total . Planned 2022 Salary Increases for US Workers are Trending Upward . Salaries in APAC continue to rise amid tight labor market and growing The average 2023 merit increase budget, including zeros, reported by survey participants came in at 3.4%, compared to the 3.2% actually delivered in 2022. This snapshot survey is conducted four times per year and provides up-to-date salary increase budget data for 100+ markets across the globe. Theres one thing certain about the future of work: unpredictability. At this same time last year, we asked survey participants to indicate what month they will have a finalized annual increase budget for the coming year. Now part of the Mercer QuickPulse TM survey series to give you the latest insights in compensation planning and total rewards. The Video could not be loaded because the privacy settings are disabled. 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. Mercers approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. The Leader in Executive Compensation Consulting | Salary Survey | Pearl . For more information, visit mercer.com. However, should the economic situation continue to decline, that may change this outcome. Companies in the U.S. are planning to increase employee salaries by an average of 4.1% overall in 2023, WTW's recent Salary Budget Planning Report found. One in three organizations say they have, or plan to take, a living wage approach for hourly wages, according to Mercers Compensation Planning Survey. Many employers are reporting an increase in attrition rates as employees begin to look for more appealing offers, both in their current industry and in new ones altogether. This was most pronounced in industries such as retail, where wages increased an average of 7.7percent per employee, largely due to companies increasing their internal minimum wage in response to a fast-moving job market. Pay Raises Are Coming In 2022 - TheStreet Workspan Daily provides fresh news, every weekday. 46% of . Indonesia, 21 December 2021 - Salary increments in Indonesia are on the rebound to pre-pandemic levels, with median pay increases projected to hit 6.5% in 2022. While wage increases are inevitable, there's more to the solution. Participate in as many of the markets listed below, as you like. Given the current climate, salary projections for 2022 are lower than expected, according to Normandin Beaudry. 1 Mercers 2021 E3 Salary Movement Snapshot survey was conducted in July and August 2021 that polled 1,730 organizations globally. Please see ourPrivacy Policyfor details. Likewise, we are seeing an increase in the total increase budget for 2023: 4.2% for 2023, compared to 3.8% in 2022. Mr Swani added, Despite the impact of the pandemic on global unemployment, employers in many markets are having difficulty finding talent especially with very limited talent mobility across countries due to border restrictions, and companies are looking to attract and retain their employees with more competitive compensation and benefit packages.. Hiring across the region has also accelerated in the second half of 2021, as businesses shift their attention from reducing staff to hiring more, albeit still not at pre-pandemic levels. Many employees could be in for pay hikes of 5% or more in 2022 - CNBC Visit the US & Canada Participation Station! In 2020, inflation was a low 1.4% but salary increase budgets in 2020 and 2021 were higher (between 2.5% and 2.8%). At this same time last year, we asked survey participants to indicate what month they will have a finalized annual increase budget for the coming year. But whats the difference between tolerable stress and toxic stress? Across industries, Financial Services is leading the market at 4.0% merit and 4.7% total increases. You may access your survey submission at any time to make updates. Source: Mercers 2021 Health on Demand report, 50% of Canadian employers facing higher than usual levels of attrition reported that limited career advancement was a driver, 27%reported a desire for industry change, 27%reported burnout and poor work-life balance as a key cause. This reality tends to advantage employees in terms of real spending during low . With minimal impact on productivity, collaboration or employee development, more employers are also willing to offer either part-time remote working (76%), flex-time (75%) or full-time remote working arrangements (32%) as part of their future of work policy, up 46%, 12% and 22% respectively in relation to pre-pandemic levels. Organizations should also remember that pay is only one tool in their toolkit; take a broader view of total rewards and implement benefits that help meet workers needs particularly those that are low to no cost, but of high value like flexible working, or financial wellness programs.. U.S. employers 'again' boosting 2022 pay raises, WTW survey Mercer, an American asset management firm, projected an increase of 9% in salaries across industries in 2022. 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. Providing more flexibility around days off for caregiver support could be one way to show the parents on your team that their wellness matters to the entire organization. Access information and participation materials for a range of compensation and benefits surveys conducted in the US and Canada. For more information, visit mercer.com. Separate promotion budgets still dont seem to be the norm only 18% indicated that they have them. Mercer's researchers found that as of October 2021: It can be difficult to keep up with relevant compensation trends and how they impact your organization. Compare your company to the market with base salary and total cash compensation data for up to 50 benchmark jobs. And Statistics Canada is now reporting CPI at 4.1% (Year-over-year August), the . Compensation is going up. But, is it enough? | Mercer US A competitive leave policy is a benefit to everyone. While pay is a driving factor for many workers, it is not the only one. The future of rewards is shifting. 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. Next year's planned pay increases would be the highest on record since 2008. With all that said, what are we looking at for 2023 preliminary budget projections? We continue to stand at a crossroads in the world of work. Within the survey, each topic can be accessed via the drop-down menu icon at the top of the page. To address this question, its helpful to examine how compensation budgets have been impacted by inflation in years past. Survey respondents are typically HR professionals, and their organizations cover a broad range of of size, geography, and ownership structure. Employers are also recognizing the value of knowing what skills reside within the organization, how demand for skills can swiftly shift with the market, and the importance of deploying or developing existing employees to meet changing needs. Employers have an opportunity to share with employees not only how pay levels are set, but also information on the market range for their role. This would lead us to believe that although they are providing off-cycle increases, inflation is not the driving factor. 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. The Video could not be loaded because the privacy settings are disabled. While in todays period of high inflation this may seem disadvantageous to workers, the reality is that over the last two decades, this approach has delivered larger compensation increases to workers than it would have if budgets were indexedtoCPI. Ensure your incentive programs are competitive. Just always keep in mind that you will likely see a change from the September to the November publication of the projected budget numbers. Take this opportunity to seal any cracks in your competitive position, increase pay transparency, and reassure employees that their pay is aligned with the external market even if they dont see their pay moving at the rate ofinflation. As expected, this year, the majority of organizations are planning to provide salary increases in 2022. By participating in the survey, you will automatically receive the results for free when they publish. As the US reverses restrictions on immigration, experts say firms may find more tech talent, which could reshape their business. This high rate of employees receiving increases results in the typical organization not being able to significantly differentiate increases between competent and outstanding performers. Top-performing individuals can be enticed with multi-year bonuses or lump sums to reflect current market premiums. 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 . 2023 Mercer (Canada) Limited. Stay on top of the latest leadership news with This Week in Leadershipdelivered weekly and straight into your inbox. In the 1980s, most employers moved away from cost of living wage increases and instead focused on cost of labor the market rate for the job being performed. Salary Increase Projections 2023 - SHRM Despite what was projected in 2021 for 2022 salary increases, it has gone up. Your total rewards program for the new normal. Salaries expected to rise faster in 2022 | Mercer Hong Kong These include the Hospitality, Airlines, Retail and Luxury Goods sectors.. their associated costs. Simply revisit the survey and click the submit button to confirm previously entered . It's time to get connected. ARLINGTON, Va., Jan. 13, 2022 (GLOBE NEWSWIRE) -- Fueled by tight labor markets, U.S. employers are boosting their original salary increase projections for 2022 as the Great Resignation shows no . Likewise, we are seeing an increase in the total increase budget for 2023: 3.9% for 2023, compared to 3.4% in 2022. Our national magazine, with long and short form articles on critical leadership issues. There are several findings that are worth noting from our survey of global practices. Talent All Access gives you both with quick to find and easy to digest content. Notably, when asked what they were doing to offset market inflation for their employees, only 34% indicated that they would provide an ad hoc off-cycle wage review and/or adjustment, while a similar percentages indicated they that were not planning to do anything. Mercer's Total Remuneration Survey 2023 is a salary and benefits study that offers in-depth reports and benchmarks for total compensation analysis. 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. Marsh McLennan is the leader in risk, strategy and people, helping clients navigate a dynamic environment through four global businesses. 2 World Economic Outlook, International Monetary Fund, April 2021. Consider whether starting wages require a boost either overall or in select high-cost markets. Welcome to the Workspan Family of Content | WorldatWork This certainly applies to HR Management in 2021. Salary Projections to Lag Inflation: Mercer While nearly 80% of organizations reported that they are just in the preliminary stages of determining their 2023 annual . Current & projected data on pay increases, structure adjustments, and more. All Rights Reserved. We are in the midst of a labor shortage in the US, and wages are moving up especially for hourly pay. 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. Update your submission as needed, and click the Submit button! Will annual increase budgets be higher when we run the survey again in . Depending on the industry, we may continue to see budgets increase but some organizations bracing for a recession are likely providing conservative merit increases in an attempt to avoid layoffs later in the year. . We have provided the data excluding those organizations that are not providing an increase. Remuneration Trends & Insights. New compensation data reveals inflation is putting pressure - mercer.ca Under the 'Manage Cookies' option in the footer, accept the Functional cookies to allow the video to play. 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. 2023 Salaries Expected to Lag Behind Inflation: Mercer As we look to 2023, Korn Ferry talent acquisition experts offer their thoughts on what the coming year will bring to the job market. Then, consider benchmarking how your total rewards program stacks up against your competitive set: salary, benefits and those more nuanced qualitative differentiators that speak to your organizational culture. Bolstering the financial health of your employees can be accomplished through channels other than simple wage increases. Internet Explorer is no longer a supported browser on imercer.com. For an optimal experience on imercer.com, please use Chrome, Edge, Firefox, or Safari. More than 93 per cent of Australian organisations are planning salary increases for their workforce in 2022 of 3 per cent, up 0.5 per cent from 2021, according to Mercer's annual Total Remuneration Survey (TRS) . Africa: Algeria, Angola, Cameroon, Egypt, Ethiopia, Ghana, Ivory Coast, Kenya, Morocco, Mozambique, Nigeria, Senegal, South Africa, Tanzania, Tunisia, Uganda, Zambia, Americas: Argentina, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Mexico-Monterrey-Saltillo, Panama, Paraguay, Peru, Puerto Rico, Trinidad and Tobago, United States, Uruguay, Asia Pacific: Australia, Bangladesh, Cambodia, China-Beijing, China-Changsha, China-Changzhou, China-Chengdu, China-Chongqing, China-Dalian, China-Guangdong, China-Hangzhou-Ningbo, China-Hefei-Wuhu, China-Nanjing, China-Qingdao, China-Shanghai, China-Shenyang-Changchun, China-Shenzhen, China-Suzhou, China-Tianjin, China-Wuhan, China-Wuxi, China-Xiamen-Fuzhou, China-Xian, Hong Kong, India, Indonesia, Japan, Macau, Malaysia, Myanmar, New Zealand, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Vietnam, Central & Eastern Europe: Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Latvia, Lithuania, Moldova, North Macedonia, Poland, Romania, Serbia, Slovakia, Slovenia, Ukraine, Uzbekistan, Middle East: Lebanon, Oman, Qatar, Saudi Arabia, Turkiye, United Arab Emirates, Western Europe: Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom. Many companies took immediate action following the minimum wage announcement, according to Mercer Turkey CEO Dincer Guleyin. To participate, go to the survey and enter your email address to begin participation. More than 72% indicated their budgets are finalized between October and January, with most selecting November or December. If you would like more details on the Mercer QuickPulse or US Compensation Planning Survey please contact us at 800-333-3070. Likewise, we are seeing an increase in the total increase budget for 2023: 3.9% for 2023, compared to 3.4% in 2022. Workspan. More centralized review, calibration, and control processes of base salary increases, Greater differentiation in increases between outstanding and competent performers, The use of sustainability, ESG and DEI metrics in incentive plans, Connecting the work the organization does to its mission, vision, and values, Clarifying and communicating employee growth and career development opportunities, Engaging with employees in organization change priorities, Building manager and leader effectiveness to build connections and inclusivity within their teams. However, no one is planning to freeze salaries, even with looming fears of an economic downturn. Hong Kong (3.5%), Singapore (3.5%), Malaysia (4.5%), Philippines (5%) and Thailand (5%) came in below the regional median of 5.4%, while Indonesia came in above at 6.5%. 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 Mercers latest Salary Movement Snapshot Survey1. That's a far cry from just a couple of years ago. 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.
