Our whitepaper analyzes some of the big trends for 2022, such as improving employee wellness and leveraging remote work in your strategies . 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. 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. Now is the time for employers to close any gaps in competitiveness and keep a close pulse on the market for fast-moving market segments. Our national magazine, with long and short form articles on critical leadership issues. While pay is a driving factor for many workers, it is not the only one. Heres our take on 3 ways organizations should face the unexpected and thrive. Actual and projected pay increase data at the city and national levels. The future of rewards is shifting. With the potential for price hikes to be temporary, employers may alternatively consider lump sum awards to offset rising prices. 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. The consumer price index rose 8.5 percent over the last 12months the highest inflation the US market has seen in more than 40years. To be considered a participant, confirmation of the data is required in each edition, even if your data has not changed. View our expertise through the lens of your existing organizational culture to determine what kinds of solutions may work best for your remoteteam. The infographic also showcases our Quarterly Remuneration . As a result of the last two years of adapting and evolving, organizations globally have charted new business and talent strategies, and this has had a significant impact on the direction of reward programs. These are the highest budgets weve seen since the 2008 financial crisis. By using our site, you agree that we can place cookies on your device. 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. Across industries, Financial Services is leading the market at 4.0% merit and 4.7% total increases. The pandemic had the effect of thrusting inequality into the spotlightnot just in healthcare or law enforcement, but in the workplace, as well. We recommend employers consider three actions: First, while employers may not need to take broad-scale action on compensation due to inflation, action is warranted based on the conditions of the labor market. Could the results create an entirely new approach to succession planning? Weekly leadership messages from our CEO Gary Burnison, capturing the mood and the moment with storytelling and insights. These include the Hospitality, Airlines, Retail and Luxury Goods sectors.. 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. Time is limited. With more states requiring external publication of pay ranges on job postings, it is critical that organizations build their own story around compensation because without the right context, employees will create their own narrative, added Mason. 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. 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. Many companies took immediate action following the minimum wage announcement, according to Mercer Turkey CEO Dincer Guleyin. This is the sixth in a series of global pulse surveys from Korn Ferry designed to gather insights into how organizations are adapting their reward programs in response to a rapidly changing world, and to assess how their plans for future rewards programs are evolving. 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. Participation is simple, with just one survey for all four editions. 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 . To find out what creative approaches you can be taking, contact us here. 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. Most organizations globally are reporting an uptick in their median total salary increase budgets for 2022 vs what they had planned in 2021. When comparing the average base pay per employee from 2021 to 2022, wages increased an average of 4.9percent. 2 World Economic Outlook, International Monetary Fund, April 2021. 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. NEW YORK, September 30, 2022--Today, Mercer released the results of its 2023 US Compensation Planning Survey revealing that while salaries are going up, 2023 compensation budgets and salary . Organizations in France, Russia, India and South Korea are all forecasting . Take an inclusive approach to benefits. While pay transparency might be in the news more and more, employers have been slow to modify their communication of pay ranges. 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.. How will you use this information to develop your proposal, knowing its preliminary? The 2023 survey is now open. This Video is unable to play due to Privacy Settings. You need numbers to get the conversation started. Given the continued impact of the pandemic on business conditions, accelerating inflation, and labor supply and demand imbalances, organizations felt compelled to adjust their compensation increase budgets in the latter part of 2021 and early 2022. That challenge of attrition rates can prove to be an opportunity with the right perspective. To participate, go to the survey and enter your email address to begin participation. Determine the right incentive program for your company by evaluating eligibility, targets and actual incentive data for STI, sales and LTI. Slightly higher than the pre-pandemic levels, the projected salary . Understanding where your offer may not be competitive enough can give you insights into what employees truly want out of their workplace. This snapshot survey is conducted four times per year and provides up-to-date salary increase budget data for 100+ markets across the globe. There are several findings that are worth noting from our survey of global practices. The survey is available in English, Portuguese and Spanish. 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. Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. If you would like more details on the Mercer QuickPulse or US Compensation Planning Survey please contact us at 800-333-3070. Employee benefits consulting and brokerage, Mental health's impact on work and home life, Mental health and how to improve employee access and support, Pension evolution: Retirement and investment video series, Addressing workforce diversity, equity and inclusion (DEI), Moving mobile employees ahead of inflation, Reshaping the future: Take stock & solidify - Feb 2, 2023, Mercer Global Investment Forums 2022 - Canada, Webinar replay: Global Talent Trends 2022, global pandemic survey on labour market challenges. However, there is some variation by industry: In order to accommodate the increasing annual increase budgets, salary structures are increasing as well. Only 3% of participants responded that they did not use factors and instead provided an across the board increase, which would indicate that increasing pay across the board for inflation or cost of living is a prevalent practice. Need compensation planning data in Canada? The US Compensation Planning Survey includes data from more than 1200 US organizations of varying sizes across 15 industries. Mr Swani added, Adopting skills-based pay approaches, either by replacing or complementing existing job-based models, creates a competitive edge in todays changing business environment by supporting the attraction, development and retention of critical skills. Marsh McLennan is the leader in risk, strategy and people, helping clients navigate a dynamic environment through four global businesses. 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. 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. Based on the average of five firms gathering compensation data ( Normandin Beaudry, Mercer, Pa yscale, LifeWorks, and Eckler ), projected increases to Canadian salaries in 2023 are expected to be approximately 3.8%. 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.. As a SBS participant, you will receive free access to individual reports for all available markets in which you have submitted data. 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. You are using a browser version that we do not support. Despite what was projected in 2021 for 2022 salary increases, it has gone up. 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%). 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. To be considered a participant, confirmation of the data is required in each edition, even if your data has not changed. Together, were redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. 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. Banking and Financial organizations tend to openly communicate their structure information, even without being asked, more so than other industries. Bolstering the financial health of your employees can be accomplished through channels other than simple wage increases. These products are all included in Talent All Access Portal+, but can also be purchased separately. 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. Puneet Swani, Mercers Career Business Leader for Asia, Middle East, Africa and the Pacific, said, The projected salary increments highlight a divergence in pay progression between emerging and developed economies. 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. Senior Principal Kurt Groeninger talks about creating the foundation for your ESG strategy by setting up the right infrastructure for your organization. Despite an influx of legislation aimed at increasing pay transparency, the survey found employers have been slow to modify their communication of pay ranges outside of state mandates. Contact Us. This would lead us to believe that although they are providing off-cycle increases, inflation is not the driving factor. 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. This year, Mercer's Total Remuneration Survey (TRS) also saw higher projected increments across most of the 18 1 industries surveyed. Almost two-thirds of employers plan to award raises in 2023 that are larger than last year, Willis Towers Watson found in a survey of more than 1,400 U.S. companies conducted in April and May. Recession fears dont seem to be impacting increase budgets, Employers are increasing pay outside of the annual cycle. This survey remains open January to November each year. except for those from the High Tech industry, can also expect higher bonus payouts this year, based on Mercer's mid-2022 forecast. Current information on important topics related to compensation planning. The labor shortage was reported as the top driver for increases in compensation budgets for employers, which aligns with long-standing practices focused on paying based on demand for labor, not inflation or cost of living. For example, twice per year compensation increases have become the norm inArgentina. Actual increases were higher than predicted. SBS is not available to purchase for participants or non-participants; however, there are a number of purchase options available for Global Compensation Planning. But whats the difference between tolerable stress and toxic stress? Will annual increase budgets be higher when we run the survey again in November? November 2022 results. 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%. To address talent attraction and retention issues, organizations are putting greater emphasis on flexible work and pay-for-skills approaches. Participants will receive a complimentary executive summary report of the results! 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. Compensation practices & salary increase projections for 2022. Resources: Leading in the New Shape of Work. As a result, forecasted increases are likely understated to actual total increase practices by as much as 25-33% of the overall budget. While wage increases are inevitable, there's more to the solution. With all that said, what are we looking at for 2023 preliminary budget projections? The actual average merit increase delivered so far in 2021 was 2.8%, but that number dips to 2.5% when including those companies that did not deliver increases. "May you live in interesting times" is an English expression claimed to be a translation of a traditional Chinese curse. For more information, visit mercer.com. This high rate of employees receiving increases results in the typical organization not being able to significantly differentiate increases between competent and outstanding performers. their associated costs. Nearly two-thirds (64%) of employers in the United States have budgeted for higher employee pay raises than last year, according to a report from Willis Towers Watson (WTW). First off, use this as directional information and combine it with additional sources. Industry-wise, financial services is . Executives, management and professional . If you have participated in this survey within the past year, you will receive an email reminder during the participation period for each edition. Its hard to say. 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%. 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 30 million viewers are expected to watch football this Thanksgiving. 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. Theres one thing certain about the future of work: unpredictability. For most employers, cost of living increases are a thing of the past. This Video is unable to play due to Privacy Settings. In the August edition of Mercers 2022 Canada Compensation Planning Survey pulse, 84% of the almost 600 participant organizations reported that they are just in the preliminary stage of determining their 2023 annual increase budget. In the near future, jobs are no longer going to be the organizing unit of work but skills would be. Mercers 2022 Global Talent Trends found that organizations are increasingly placing emphasis on the sustainability of human capital, with one in three executives believing that delivering on good work standards such as fair pay or worker protection will deliver the greatest ROI, and nearly nine in 10 HR leaders say that delivering on good work standards is a priority for HR. Start by examining your organizations work-life balance, opportunities for internal promotions and benefits packages. Review statutory and supplemental benefit details for social security, retirement, medical, death, disability and more. Access everything you need to know about salary increases, economic indicators, mandatory pay schemes and more with our Global Compensation Planning Report (GCPR). 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. In the US, however, its more likely the high inflation we are seeing today will be temporary, driven by supply shocks from COVID lockdowns and the Russia/Ukraine crisis, and that well see a return to more normal levels of inflation. The days of a standardized one-size-fits all employee benefits package could be drawing to a close. Talent All Access gives you both with quick to find and easy to digest content. This survey explores trends with regard to long-term assignments (LTA), and how policies and practices to manage them evolved since our last 2020 edition, run during the pandemic. Will annual increase budgets be higher when we run the survey again in . For this survey, there is a particular focus on salary increase projections for 2022. Mercers 2021 Flexible Working Policies & Practices Survey show that 54% of companies in Asia Pacific have implemented or are actively developing a long-term flexible working strategy. Wages are on the rise. Weve combined annual compensation survey data and recent rewards and benefits pulse surveys to provide anticipated salary increases for 2022. 2023 Mercer (Canada) Limited. Ensure your incentive programs are competitive. What can corporate leaders learn from the coaches manning the sidelines? Mercer noted that total . 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. Quebec is expected to see the biggest increases to salary in 2022, according to a survey. 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.. Please use one of these supported browsers to ensure the best experience on this site: Participate to get the latest salary increase budget data! 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. Sustained merit salary increase of 4.5% for 2022, also forecasted for 2023 . Review market practice and statutory requirements of paid and unpaid time off for a selection of core leave programs. . However, no one is planning to freeze salaries, even with looming fears of an economic downturn. Most employers reported that the pay increases are in direct response to . Cost of labor is a function of supply and demand, and is typically measured through compensation surveys that contain the going rate for jobs. Dont let pay be the reason your employees start to explore other opportunities. The Federal Reserve has already begun taking aggressive action for this to happen. Workspan Daily provides fresh news, every weekday. This is up just slightly from 2022 projections of 3% and 3.3%*, respectively, from our August Pulse and an increase over 2021 actual increases of 2.8% . 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). If you experience any issues accessing your survey, please contact us. Lets dive a little deeper into some of these trends in compensation planning. Most employees today see compensation as a blackbox and dont understand how their pay is set. The Total Remuneration Survey, Mercers flagship annual compensation and benefits benchmarking study, identifies current pay practices and benefits policies, as well as budget, hiring and turnover trends for the year ahead. Still, only 24% of companies will communicate an employees grade/band upon request. Access the Canada Compensation Planning Survey for insights to help with pay decisions in that country. 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. Mercers approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercerbelieves in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. As you plan your compensation strategy and total rewards program, you'll want the latest data-driven insights about the labour market. This snapshot survey gathers salary increase data for 150+ markets across the globe. 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. You need numbers to get the conversation started. However, it should be noted that these budget numbers are only preliminary and should be considered to be one of several inputs used to determine an organizations budget. Create a solid foundation for your pay structure. How much larger will increase budgets be for 2023? This is especially true for hourly workers, whose base pay rose on average 6.7%2 in 2022, despite a 3.8%3 total base pay increase budget. 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. 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. With 11.3million job openings, employees have options. Separate promotion budgets still dont seem to be the norm only 18% indicated that they have them. Wages are on the rise. Now part of the Mercer QuickPulse TM survey series to give you the latest insights in compensation planning and total rewards. Participate in as many of the markets listed below, as you like. There are several findings that are worth noting from our survey of global practices. We are seeing markets that have kept COVID-19 under control reporting higher than average pay raises. Mercer's researchers found that as of October 2021: This is according to the annual Total . All Mercer events about talent, investment, and health issues. 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. In the August edition of Mercers 2022 US Compensation Planning Survey pulse, 78% of the almost 1200 participant organizations reported that they are just in the preliminary stage of determining their 2023 annual increase budget. Survey participation: March 13 March 24. 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 slightly higher than this time last year. 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.