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. 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. Other factors commonly considered include internal equity and current salary compared to midpoint or market value. Please note: To be considered a participant, confirmation of the data is required in each edition, even if your data has not changed. If you need more assistance, we have team members standing by to help. 41% of organizations will have a higher salary increase budget in 2022 than 2021. Most employers reported that the pay increases are in direct response to . That's a far cry from just a couple of years ago. Missing your live results access code? Most employees today see compensation as a blackbox and dont understand how their pay is set. 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. The average 2023 merit increase budget, including zeros, reported by survey participants came in at 3.8%, compared to the 3.4% actually delivered in 2022. Stay ahead of everchanging regulations. However, no one is planning to freeze salaries, even with looming fears of an economic downturn. Still, only 30% of companies will communicate an employees grade/band upon request. 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. Slightly higher than the pre-pandemic levels, the projected salary . 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. Not only can doing so enhance retainment, it can also save your organization money in the longrun. We use cookies to improve your experience. 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. Given the current climate, salary projections for 2022 are lower than expected, according to Normandin Beaudry. We are creating a new Remuneration Trends and Insights website. Stay on top of the latest leadership news with This Week in Leadershipdelivered weekly and straight into your inbox. Actual increases were higher than predicted. This survey digs into the why and how of talent global mobility programs within your company's overall strategy. What metrics will be used to nurture their soft skills and leadership abilities? While pay transparency might be in the news more and more, employers have been slow to modify their communication of pay ranges. Cost of labor is a function of supply and demand, and is typically measured through compensation surveys that contain the going rate for jobs. For more information, visit mercer.com. 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%. 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. By using our site, you agree that we can place cookies on your device. 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. . It seeks to understand the drivers for talent international mobility, where mobility management fits in the organization, the organization and responsibilities of the Mobility function, digitalization & technology and framework trends. Participants will receive a complimentary executive summary report of the results! The industries predicted to have the biggest salary increases in 2022 compared to what their increases were in 2021 are: Retail and wholesale trade: 2.8% to 3.6%; Finance: 2.7% to 3.5%; 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. Survey participation: March 13 March 24. Your total rewards program for the new normal. If you would like more details on the Mercer QuickPulse or US Compensation Planning Survey please contact us at 800-333-3070. . Other industries such as High Tech and Consumer Goods also saw increases over prior year. Within the survey, each topic can be accessed via the drop-down menu icon at the top of the page. 3 ways to emphasize the human dimension and focus on your people amid digital transformation. First off, use this as directional information and combine it with additional sources. September 22, 2022 Canada, Toronto Today Mercer released the results of its 2023 Compensation Planning Survey revealing that inflation continues to put significant pressure on the compensation budgets and salary projections of Canadian employers.. Canadian employers report they are budgeting 3.4 per cent for merit increases and 3.9 per cent for their total budget increase for 2023. However, industries negatively impacted by the pandemic and more vulnerable to uncertainties like borders opening up and the return of tourism, are seeing the impact on their operations, business performance and eventually compensation. And the Workspan Podcast offers timely insights from experts in a . Singapore, November 15, 2022- Salary increases in Singapore are expected to surpass pre-pandemic levels with increments to average 3.75% in 2023, compared to 3.65% in 2022 and 3.60% in 2019. Resources: Leading in the New Shape of Work. Small amounts of short-term stress can boost performance. 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. The combination of wage growth and the rise in inflation is reflected in the projection of salary increase budgets for 2022, climbing to 3.9% in November from the 3% reported in April 2021. While nearly 80% of organizations reported that they are just in the preliminary stages of determining their 2023 annual increase budget, the survey found that overall salaries are going up. 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. The projections for 2022 salary increase budgets jumped almost a full percentage point, from 3 percent in April to 3.9 in November. While inflation currently sits at about 7%, salary increase projections are just over half that. 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. 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.. This Video is unable to play due to Privacy Settings. Under the 'Manage Cookies' option in the footer, accept the Functional cookies to allow the video to play. 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. How can they be made to feel like they belong in your organization when not sharing office space and coffeebreaks? Personalized benefits plans are a great way to account for these discrepancies. Today, Mercer released the results of its 2023 US Compensation Planning Survey revealing that while salaries are going up, 2023 compensation budgets and salary projections for US employers are expected to lag behind inflation. Ensure your incentive programs are competitive. If you would like more details on the Mercer QuickPulse or US Compensation Planning Survey please contact us at 800-333-3070. This calculation gives us a look at how much average salaries are changing due to hiring rate increases and off-cycle adjustments. 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. Increases are forecast at 2.8 per cent, excluding freezes, nearly identical to the 2.7 per cent increase recorded in 2019. Most organizations globally are reporting an uptick in their median total salary increase budgets for 2022 vs what they had planned in 2021. This calculation gives us a look at how much average salaries are changing due to hiring rate increases and off-cycle adjustments. Natural resources company Vedanta had a simple challenge: conduct a succession process that moves at the pace of business. Listening to your employees about their concerns and acting upon them is central to creating an effective DEI strategy. As you plan your compensation strategy and total rewards program, youll want the latest data-driven insights about the labour market. Likewise, we are seeing an increase in the total increase budget for 2023: 3.9% for 2023, compared to 3.4% in 2022. As a result, while painful, at this point the US inflation levels have not risen to the level we typically see for wide-scale intervention in compensationprograms. Executives, management and professional . 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. While wage increases are inevitable, there's more to the solution. The future of rewards is shifting. Simply revisit the survey and click the submit button to confirm previously entered . 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. Then, collect and incorporate the unique factors of your organization that will influence the budgets (e.g., financial performance, hiring needs, etc.). 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. 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%. By. But is it enough? Across industries, Financial Services is leading the market at 4.0% merit and 4.7% total increases. This snapshot survey is conducted four times per year and provides up-to-date salary increase budget data for 100+ markets across the globe. Individual performance is still the most common factor that employers use to determine the size of an individuals annual increase. Follow Mercer on LinkedIn and Twitter. Complete/update all the tabs identified below, prior to the deadline for each edition, to ensure you receive access to the results! 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. That's according to Mercer's newly released 2023 US Compensation Planning Survey, which revealed that employers are budgeting an average of 3.8% for merit increases in 2023, compared to the 3.4% delivered in 2022 - and 4.2% for their total increase budget for next year (compared to 3.8% this year). To address this question, its helpful to examine how compensation budgets have been impacted by inflation in years past. 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. Our look at pressing problems and solutions for board directors. The survey findings indicate that organizations globally are in the process of making, or are considering, significant changes in their salary increase budgets for 2022. We are in the midst of a labor shortage in the US, and wages are moving up especially for hourly pay. 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.. 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. Chinas potential in the life sciences sector is undisputed, given its long history and tradition in medicine. This would lead us to believe that although they are providing off-cycle increases, inflation is not the driving factor. Salary Projections for 2022. Update your submission as needed, and click the Submit button! Senior Client Partner, ESG & Global Leader Total Rewards. Individual performance is still the most common factor that employers use to determine the size of an individuals annual increase. Given the typical budget approval process at any organization, we get it. When comparing the average base pay per employee from 2021 to 2022, wages increased an average of 4.9percent. However, with teams spread across a country or globally, employers need to overcome key challenges in fostering a sense of organizational values and processes. Now part of the Mercer QuickPulse TM survey series to give you the latest insights in compensation planning and total rewards. Organizations that recognize the specific lifestyles of their employees will have a head start in attracting and retaining toptalent. While wage increases are on the horizon in almost every industry, employees are looking for more than just financial compensation for theirwork. Despite a divergent economic outlook across markets in Asia Pacific, companies in the region are forecasting an average 4.8% increase in overall salaries in 2023, according to the annual Total Remuneration Survey (TRS) 2022 conducted by Mercer. As skills begin to overshadow education or experience, more companies are implementing skills-based pay practices to attract new talent and retain critical skills. View our expertise through the lens of your existing organizational culture to determine what kinds of solutions may work best for your remoteteam. Banking and Financial organizations tend to openly communicate their structure information, even without being asked, more so than other industries. This high rate of employees receiving increases results in the typical organization not being able to significantly differentiate increases between competent and outstanding performers. As you plan your compensation strategy and total rewards program, you'll want the latest data-driven insights about the labour market. 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. Discover which types of transportation benefits are commonly offered and who is eligible to receive them with Mercer's survey on Transportation Policies. Most organizations globally are reporting an uptick in their median total salary increase budgets for 2022 vs what they had planned in 2021. This snapshot survey is conducted four times per year and provides up-to-date salary increase budget data for 100+ markets across the globe. More than 30 million viewers are expected to watch football this Thanksgiving. 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. That challenge of attrition rates can prove to be an opportunity with the right perspective. Access everything you need to know about salary increases, economic indicators, mandatory pay schemes and more with our Global Compensation Planning Report (GCPR). 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. Total increases were slightly higher at 2.9%, decreasing to 2.6% when factoring in those not providing increases. For more data and insights from Mercers Total Remuneration Survey 2021, please see here. Everything you need to know about salary increases, economic indicators, mandatory pay schemes and more. Will annual increase budgets be higher when we run the survey again in November? Moreover, only 2.8% of Asia Pacific employers indicated they have plans or are considering to implement further layoffs and workforce reductions next year, compared to 7.8% in 2021. 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 . 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. These are the highest budgets weve seen since the 2008 financial crisis. 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.. Please see ourPrivacy Policyfor details. Mercers approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. In addition, Mercer also conducts regular pulse surveys throughout the year to keep up with the impact of the rapidly changing business environment and compensation and workforce trends. Savy employers are starting to do the same, expanding their labour market beyond regional boundaries. 2022 by Mercer that polled 636 organizations across 15 industries in Thailand between April and June this year. The last remaining legacy of this historical practice is reflected in some labor contracts and collective bargaining agreements where wage increases remain indexed toCPI. The UK has . Japan, New Zealand and Australia are the lowest at 2.5%, 3.1% and 3.3% respectively. 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. For more information, visit mercer.com. This will continue to drive dissatisfaction with compensation programs and pressure employers to increase wages in the months ahead. Enter the characters shown in the image. To address talent attraction and retention issues, organizations are putting greater emphasis on flexible work and pay-for-skills approaches. Manage your transportation benefits efficiently and effectively. 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. More than 72% indicated their budgets are finalized between October and January, with most selecting November or December. Theres an increased use of select cash compensation programs in the new war for talent and increased utilization of select non-financial reward programs. The average 2023 merit increase budget, including zeros, reported by survey participants came in at 3.8%, compared to the 3.4% actually delivered in 2022. 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. Welcome to the Workspan Family of Content. Engaging articles centering on business issues our clients have tackled. Under the 'Manage Cookies' option in the footer, accept the Functional cookies to allow the video to play. If you experience any issues accessing your survey, please contact us. Could the results create an entirely new approach to succession planning? By participating in the survey, you will automatically receive the results for free when they publish. Under the 'Manage Cookies' option in the footer, accept the Functional cookies to allow the video to play. 2 World Economic Outlook, International Monetary Fund, April 2021. Mercer's researchers found that as of October 2021: From job search strategies to networking and interview tips, our coaches and tools are here to help. Likewise, employees with small children have also had a pandemic experience that is vastly different from those who have teenagers or no children. As long as the economy and the job market remains strong, were likely to see continued upward pressure on wages, particularly with hourly workers and in certain industry sectors. 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. 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 . 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. Corporate & Investment Banking / Global Markets. And a quarter of employers plan to give increases in the range of 5%-7% in 2023. However, they dont paint the full picture of wage increases. Discover which types of transportation benefits companies typically offer and understand Will annual increase budgets be higher when we run the survey again in November? Developing a compensation strategy for remote employees will be central to their long-term retention. Download now to learn about all these trends in compensation strategy and more as the new normal continues to evolve. 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. The fierce competition for talent and the anticipated economic recovery is putting pressure on salary increases for next year. Survey: Transportation Policies | Extended to March 3, Survey: Strategic mobility management | Participate by March 17, Survey: Long-term international assignment policies and practices | Participate by March 17, Survey: Salary Budget Snapshot E2 | Participate by May 5. WorldatWork projected a national total salary budget increase average at 3.3% for 2022, which the firm's director of Total Rewards content, Alicia Scott-Wears, said "signified not only . Share. All country salary values are the median increases presented at headline values, unless otherwise stated. New York, October 6, 2021 Employer-sponsored health plans face many unknowns in developing cost projections for 2022. Regardless of the compensation increase figure you look at, none are rising near the level of inflation creating much angst foremployees.