From determining how work gets done and how its valued to improving the health and financial wellbeing of your workforce, we add perspective. In another sign of a tight labor market, U.S. companies plan to give workers their largest pay bump in 15 years in 2023, with an average hike of 4.1%. This includes both monetary and nonmonetary actions to attract and retain employees particularly for critical or high-performing talent. And in the 15 largest economies, that 2023 projection is 1.5 percentage points higher than the 4.0% actual increase in 2021 and the 5.0% average actual increase granted in 2022. Nearly three in four respondents (74%) cited the tight labor market for increasing their budgets from prior projections, while only one-third cited anticipated stronger financial results (34%) and inflation or the rising cost of supplies (31%). As inflation continues to rise and the threat of an economic downturn looms, companies are using a range of measures to support their staff during this time, said Hatti Johansson, research director, Reward Data Intelligence, WTW. All rights reserved. This is up from the average 2.7% increases companies granted this year. | Roughly the same number (17%) will raise funds by increasing prices, and 12% will resort to company restructures and reducing staff head counts. 2021), President, Chief Executive Officer & Director. Copyright 2023 WTW. Your ability to manage risk is key to your thriving in an uncertain world. Together, we unlock potential. News provided by. However, companies in the Distribution, Health Care or Food Manufacturing businesses either kept salary budgets at 3% or perhaps even raised them. Salary ranges can vary widely depending on many important factors, including education, certifications, additional skills, the number of years you have . Only 3% of employers freezing salaries. At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. History shows that salary budgets dropped in prior recessions and never actually recovered to pre-recession levels, as shown in Figure 1. Defined Contribution Pensions Consultant - Cork - Willis Towers Watson Copyright 2023 WTW. While 44% of organizations reported not changing their projections from earlier in the year, almost 1 out of 4 (23%) reported that their 2022 projections are higher now than anticipated earlier in 2021. This sounds like a simple question, but a clear answer isnt always easy. The global pandemic affected the U.S. economy beginning in early 2020. A total of 1,220 companies representing a cross section of industries participated. We would have faced a steady decline in available workers rather than the drastic layoffs and unemployment increases that we experienced in spring 2020. Unparalleled salary benchmarking database Each year, we collect salary data on over 35 million employees in more than 11,000 organizations, across more than 130 countries. The United States is projecting an average increase of 3.4% compared to 3.1% in 2021 and 3% in 2020, which is the highest since 2008. Willis Towers Watson. Cant keep them. Results from WTWs July global salary budget survey, By End of main navigation menu. of respondents in the Willis . ARLINGTON, VA, January 13, 2022 Fueled by tight labor markets, U.S. employers are boosting their original salary increase projections for 2022 as the Great Resignation shows no signs of abating. Employers in Asia Pacific (APAC) are budgeting for an overall average salary increase of 5.08% for executives, management & professional employees, and support staff this year, according to Willis Towers Watson's latest Salary Budget Planning Survey report. Explore these additional resources to expand your approach to salary planning in 2023. Copyright 2023 WTW. The 2021 General Industry Salary Budget Survey found only 3% of companies are not planning to boost salaries next year, a drop from 8% that didnt give raises this year. Benefits Administration and Outsourcing Solutions, Executive Compensation and Board Advisory, Financial, Executive and Professional Risks (FINEX). . Thats according to the latest Salary Budget Planning Report by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. This year, that adaptation has been in response to rising global inflation and labor market pressures, both of which had a significant impact on how organizations finalized their 2022 pay budgets. Payscale's Salary Budget Survey is open for participation for 2022-2023 Most organizations globally are reporting an uptick in their median total salary increase budgets for 2022 vs what they had planned in 2021. Click to return to the beginning of the menu or press escape to close. Within some industries, base . U.S. employers planning larger pay raises for 2022, Willis For example, you may want to retain critical roles and resolve inequity issues. Also, the United Kingdom, Spain and Mexico saw increase budgets of 1.0 to 1.2 percentage points higher in 2022 compared to 2021. After all, you cant respond to everything happening in the market, all at once. Business Support Assistant - Lisboa - Willis Towers Watson Long story short, prioritizing and segmenting rewards actions will be vital for an appropriate return on investment. Then it completely skyrocketed when COVID-19 hit. COVID-19 also affected the financial health of different industries to the extremes. Click to return to the beginning of the menu or press escape to close. And projections from the report show that compensation and HR professionals are expecting even higher increases in 2023. If so, then focus your actions on leveraging salary budgets to adjust any major diversity, equity and inclusion issues (including a fair pay analysis) and prioritizing in-demand and business-critical talent. Companies gave employees an average pay increase of 2.8% in 2021. After establishing your increases budget based on market data intelligence, it is critical to align your priorities. Compensation practices & salary increase projections for 2022 - Korn Ferry In North America, 100% of countries are expected to see an overall increase in salaries in 2022, but in the Middle East & Africa, that isn't the case. UK employers to give staff 2.9% pay rise in 2022 However, roughly one-third of participants have revised their 2022 projections upward and the 2022 average projected increase (as . Salary Surveys - WTW - Willis Towers Watson The group of hyper-inflation countries (e.g., Argentina, Turkey) experiencing hyperinflation of 30% or more are in a different category altogether. Updated 12:01 PM EDT, Fri July 15, 2022 . Salary increases rarely match sudden increases in inflation, and the time horizon or duration of inflation or labor market shortages affects decisions in uncertain times. The 2021 General Industry Salary Budget Survey was conducted by Willis Towers Watson Data Services between April and June 2021. Finally, there is a certain psychology that says those in leadership that managed through the Great Recession of 2008 to 2010 still have a hangover mindset driving their conservative approach to increasing fixed costs. Willis Towers Watson Survey. Today, a discussion on salary budget projections in the U.S. cannot exclude the notion of how or, more importantly, whether inflation should be factored into salary increase budgets. Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success-and provide perspective that moves you. It is important to take a total rewards perspective. 2021. of companies globally increased salaries. Clients depend on us for specialized industry expertise. To address ongoing challenges, organizations are deciding how to focus their compensation spend for the greatest impact. Email author Lori Wisper and continue the conversation. Companies are now budgeting an overall average increase of 3.4% in 2022, compared with the average 3.0% increase they had budgeted in June 2021. To Stay Competitive, Companies Are Increasing Pay in 2022 Then, start narrowing how to achieve those goals by setting priorities. 2021.Last Update: May 30, 2022. are making to help attract and retain employees is boosting salary increase budgets for 2022. . One common theme to remember: Even with an increased budget, it is important to segment your workforce as you consider your goals. Approximately 18,000 sets of responses were received from companies across 130 countries worldwide. From determining how work gets done and how its valued to improving the health and financial wellbeing of your workforce, we add perspective. Looking at 2022, greater scrutiny on the labor market will continue among both employers and employees. This translates to an average salary increase of 9.8% in 2023, compared to the actual 9.5% increase paid out in 2022. Executives, management and professional . But increased salary budgets only make it more critical for organizations to have a clear strategy for awarding pay increases as effectively as possible, prioritize critical employees and hot jobs, and differentiate for performance. Or they can utilize all of these options, especially with millions of Americans quitting their jobs, changing careers or postponing looking for employment.. Compensation Strategy & Design|Total Rewards, Benefits Administration and Outsourcing Solutions, Executive Compensation and Board Advisory, Financial, Executive and Professional Risks (FINEX). Davonne Stephens - Financial & Placement Associate - Willis Towers More than ever, making the most of your capital means solving a complex risk-and-return equation. Step 3: Confirm contact preferences*. Mar 2015 - Present8 years 1 month. Unlike the financial crisis of 2008 to 2010, when virtually every industry was impacted the same way, the economic fallout of 2020 was a health crisis certainly, but financial systems remained sound and strong. Working shoulder to shoulder with our clients, we uncover opportunities for sustainable successand provide perspective that moves you. Distributed by Public, unedited and unaltered, on 13 January 2022 14:20:02 UTC. High unemployment started to ease in the summer of 2020 and was back below 7% by the end of the year. Winning the talent race will require employers to continue to be creative and comprehensive with their Total Rewards strategy, said Lesli Jennings, senior director, Work & Rewards, WTW. From determining how work gets done and how its valued to improving the health and financial wellbeing of your workforce, we add perspective. WTW's latest Salary Budget Planning Report, based on a survey conducted between April and June 2021, found . Winning the talent race will require employers to continue to be creative and comprehensive with their Total Rewards strategy," said Lesli Jennings, senior director, Work & Rewards, WTW. Inflation, Talent Wars Spark Highest Salary Hikes Since 2007: Survey However, roughly one-third of participants have revised their 2022 projections upward and the 2022 average projected increase (as opposed to median) is 3.4%. 2021 was another year of change, with tightening labor markets pushing salary increases around the world. Consider segmenting by employee level (e.g., hourly, professional, executive), performance level or even by areas in which youre having trouble attracting and retaining (e.g., digital talent). How inflation influences pay practices, Limit the Use of My Sensitive Personal Information. The Verge - Wyyo.lehmannwerbung.de Among organizations that are planning to grant increases, average salary increases of 4.3% are forecasted (vs. 4.0% actual increases in 2021) for the top 15 economies in the world. Thats because employees get promoted, they get counteroffers and retention monies, and equity increases. Address your talent issues with a disciplined salary review process. Average Willis Towers Watson Salary | PayScale In 2023, compensation and HR professionals will need to continually monitor labor markets and economic conditions and be flexible enough to act quickly when needed. Share this article. Editors note: At the time of publication, WTW has reported that salary budgets in the U.S. are showing median salary budget 2021 actuals and 2022 projections of 3% (with more than 1,000 companies reporting). In the end, these analyses would confirm salary growth that eclipses the 3% salary budget. Employers looked to 2021 with optimism and an eye toward recovery, but many organizations around the world had to adjust to tumultuous business conditions that emerged from the pandemic. Frontline hourly workers: Cant get them. Hatti Johansson If so, then your priorities would be to adjust any major diversity, equity and inclusion issues using salary budgets even some fair pay analytics and consider in-demand and business-critical talent. 4.9% Even the 1.0% jump we saw from 2021 to 2022 is significant in terms of organizations total spend on compensation. Willis Towers Watson survey on salary trends published in October had projected a median increase of 9.3% in salaries in 2022, as against an increase of 8.1% in 2021. The most cited reasons for the higher projections were: Resilience tempered with cautious optimism will be the 2022 mantra for employers, with most looking to increase salaries and provide bonuses for employees particularly for critical or high-performing talent. Industrial manufacturing: 2.6% to 3.4%. Also, take a Total Rewards perspective. This translates to an average salary increase of 9.8% in 2023, compared to the actual 9.5% increase paid out in 2022. From determining how work gets done and how its valued to improving the health and financial wellbeing of your workforce, we add perspective. The average actual salary increase hit 4.9% in 2022, as compared to a 4.0% actual increase amount in 2021, among those organizations that granted increases in the top 15 economies around the world.