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. 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. This certainly applies to HR Management in 2021. The Leader in Executive Compensation Consulting | Salary Survey | Pearl . September 30, 2022 New York, United States 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. Follow Mercer on LinkedIn and Twitter. First off, use this as directional information and combine it with additional sources. Likewise, employees with small children have also had a pandemic experience that is vastly different from those who have teenagers or no children. The short answer is: they havent. Mercerbelieves in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. 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 . 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. 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. Slightly higher than the pre-pandemic levels, the projected salary . Please use one of these supported browsers to ensure the best experience on this site: Participate to get the latest salary increase budget data! 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 . 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. However, no one is planning to freeze salaries, even with looming fears of an economic downturn. According to Mercers US Compensation Planning Survey, the average 2022 merit increase budget is 3.4percent, with total increases (including other types of base pay increases, such as promotional awards) reaching 3.8percent. 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. Time is limited. 2023 Mercer (Canada) Limited. For example, the US median increases have risen from 3.0% (during the middle of 2021) to 3.5% (as of now). What are they doing right? 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. Overall salary increments projected for 2023 to average 4.8% across markets in Asia Pacific, but real salary increases are nominal. As a result, forecasted increases are likely understated to actual total increase practices by as much as 25-33% of the overall budget. The Retail industry is expecting the biggest jump to 12.6%, from 8.1% in 2021, followed closely by the . The exception is Brazil, which is projecting a 6.2% salary budget increase in 2022 compared to 7.1% in 2021. The 2023 survey is now open. While inflation currently sits at about 7%, salary increase projections are just over half that. This, combined with a strong job market, has heightened employee expectations for increased compensation this year; and employers are responding. 41% of organizations will have a higher salary increase budget in 2022 than 2021. Bringing you the most up-to-date information on remuneration trends and insights on the current rewards environment, key economic data affecting pay decisions, topical HR issues and more. Sign up to be notified when the next pulse survey opens for participation. 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%). Share. BY Jim Wilson 19 Jul 2022. Visit the US & Canada Participation Station! 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. Current information on important topics related to compensation planning. 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. So many things in our world are changing. The UK has . Corporate & Investment Banking / Global Markets. The study found that employers primary response to inflation is a reactionary one of providing ad-hoc off-cycle wage reviews and/or adjustments (reported by 38% of employers). Give us a call at 1-855-286-5302 or email surveys@Mercer.com. Mercer noted that total . Ensure your incentive programs are competitive. 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. Slightly higher than the pre-pandemic levels, the projected salary . 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. For more information, visit mercer.com. While wage increases are inevitable, there's more to the solution. With 11.3million job openings, employees have options. Marsh McLennan is the leader in risk, strategy and people, helping clients navigate a dynamic environment through four global businesses. This Video is unable to play due to Privacy Settings. Wages are on the rise. For example, the US median increases have risen from 3.0% (during the middle of 2021) to 3.5% (as of now). Top-performing individuals can be enticed with multi-year bonuses or lump sums to reflect current market premiums. 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. Engaging articles centering on business issues our clients have tackled. Now part of the Mercer QuickPulse TM survey series to give you the latest insights in compensation planning and total rewards. Resources: Leading in the New Shape of Work. This Video is unable to play due to Privacy Settings. A majority of organizations are granting a significant percentage of their employees a salary increase this year (i.e., at least 90% of employees will receive an increase). 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. This would lead us to believe that although they are providing off-cycle increases, inflation is not the driving factor. Total increases were slightly higher at 2.9%, decreasing to 2.6% when factoring in those not providing increases. 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% . If you would like more details on the Mercer QuickPulse or US Compensation Planning Survey please contact us at 800-333-3070. . Excluding companies that have implemented wage freezes, Pakistan (9%) has the highest projected salary increase in 2022, followed by India (8.7%) and Bangladesh (7.8%). There are several findings that are worth noting from our survey of global practices. The projected salary increments reflect guarded optimism as Thailand's Gross Domestic Product (GDP) is expected to grow by 3.8% in 2023, the highest in . Theres an increased use of select cash compensation programs in the new war for talent and increased utilization of select non-financial reward programs. Learn about healthcare offerings that help you create an inclusive benefits program to meet the needs of all employees. 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. In February this year, services firm Aon revised its salary increment trend to 9.9% versus an average of 9.4% that it had forecast in September 2021. 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. However, there is some variation by industry: In order to accommodate the increasing annual increase budgets, salary structures are increasing as well. 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. 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. Other factors commonly considered include internal equity and current salary compared to midpoint or market value. This is according to the annual Total . Enter the characters shown in the image. Singapore, November 17, 2021 -Salary increases in Singapore are rebounding to pre-pandemic levels, with increments expected to average 3.5% in 2022, compared to 3.3% in 2021 and 3.6% in 2019. 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. By partnering with Korn Ferry, Keystart has begun to act transparently on employee feedback, leading to enablement and engagement throughout the business. Likewise, we are seeing an increase in the total increase budget for 2023: 4.2% for 2023, compared to 3.8% in 2022. An email notification will be sent to participants once access has been granted; this email will contain instructions on how to access the results. Theres one thing certain about the future of work: unpredictability. Simply revisit the survey and click the submit button to confirm previously entered data. 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. 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. Savy employers are starting to do the same, expanding their labour market beyond regional boundaries. 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. Understand how features such as eligibility, performance measures, timing, payout and governance will help you design and structure the best sales incentive plans for your company.