This year, Mercer's Total Remuneration Survey (TRS) also saw higher projected increments across most of the 18 1 industries surveyed. . 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. Our whitepaper analyzes some of the big trends for 2022, such as improving employee wellness and leveraging remote work in your strategies . 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. Survey participation: March 13 March 24. With 11.3million job openings, employees have options. 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. Its hard to say. 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. This certainly applies to HR Management in 2021. 1 Mercers 2021 E3 Salary Movement Snapshot survey was conducted in July and August 2021 that polled 1,730 organizations globally. As a result, forecasted increases are likely understated to actual total increase practices by as much as 25-33% of the overall budget. 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. There are several findings that are worth noting from our survey of global practices. The total base salary increase budget includes other base pay increases such as promotions and cost of living adjustments, in addition to merit increases. Mercer's researchers found that as of October 2021: Dont let pay be the reason your employees start to explore other opportunities. Under the 'Manage Cookies' option in the footer, accept the Functional cookies to allow the video to play. 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 . This survey ran from December 2021 to January 2022 and it reflects responses from 5,042 participants in 116 countries. This Video is unable to play due to Privacy Settings. Not only can doing so enhance retainment, it can also save your organization money in the longrun. A competitive leave policy is a benefit to everyone. 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. 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. 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. 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. 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. You need numbers to get the conversation started. Will annual increase budgets be higher when we run the survey again in . . Still, only 30% of companies will communicate an employees grade/band upon request. 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%). . For this survey, there is a particular focus on salary increase projections for 2022. Determine the right incentive program for your company by evaluating eligibility, targets and actual incentive data for STI, sales and LTI. Ensure your incentive programs are competitive. Need help? We are seeing markets that have kept COVID-19 under control reporting higher than average pay raises. Additionally, to keep it in perspective, the majority of employers did report that the percentage of employees receiving off-cycle increases is typically less than 30%. 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. . 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. In this survey, you may submit all selected markets in a single submission. Just always keep in mind that you will likely see a change from the September to the November publication of the projected budget numbers. Separate promotion budgets still dont seem to be the norm only 24% indicated that they have them. The Great Resignation has overwhelmed nearly every industry except two. 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%. Given the typical budget approval process at any organization, we get it. 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. Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Contact Us. Under the 'Manage Cookies' option in the footer, accept the Functional cookies to allow the video to play. What are they doing right? For more information, visit mercer.com. Of the 62% that plan to adjust structures in 2023, we expect to see the structures increase by 3.0%, which is just above the average actual adjustment of 2.9% reported in March of 2022. Ensure your incentive programs are competitive. Merit increase budgets are tracking at 3.2%*, while total increase budgets, which also include other types of budgeted base pay increases, such as promotion awards, are tracking at 3.5%. The Retail industry is expecting the biggest jump to 12.6%, from 8.1% in 2021, followed closely by the . Need compensation planning data in US? 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. The Video could not be loaded because the privacy settings are disabled. 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. While pay transparency might be in the news more and more, employers have been slow to modify their communication of pay ranges. 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 . That challenge of attrition rates can prove to be an opportunity with the right perspective. 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. There are several findings that are worth noting from our survey of global practices. Organizations in France, Russia, India and South Korea are all forecasting . Increases are forecast at 2.8 per cent, excluding freezes, nearly identical to the 2.7 per cent increase recorded in 2019. 2 World Economic Outlook, International Monetary Fund, April 2021. Then, collect and incorporate the unique factors of your organization that will influence the budgets (e.g., financial performance, hiring needs, etc.). What can corporate leaders learn from the coaches manning the sidelines? The exception is Brazil, which is projecting a 6.2% salary budget increase in 2022 compared to 7.1% in 2021. 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. 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. Its hard to say. This reality tends to advantage employees in terms of real spending during low . However, this will change with the annual inflation figure, which was announced on Monday. Sustained merit salary increase of 4.5% for 2022, also forecasted for 2023 . 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. Under the 'Manage Cookies' option in the footer, accept the Functional cookies to allow the video to play. 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. 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: 3.9% for 2023, compared to 3.4% in 2022. 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. Given the current climate, salary projections for 2022 are lower than expected, according to Normandin Beaudry. "2023 promises to be another banner year for employees seeking salary increases," says Chris Fusco, senior vice president of compensation at Salary.com. Now part of the Mercer QuickPulse TM survey series to give you the latest insights in compensation planning and total rewards. Stay on top of the latest leadership news with This Week in Leadershipdelivered weekly and straight into your inbox. 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. Employers are increasingly using off-cycle increases to combat retention concerns, along with other issues. The tight labor market with high numbers of job openings, low numbers of unemployed workers, and heightened turnover may force employers to respond. The average merit increase will be 3.8%, compared to 2022's 3.4%, and the total increase budget will be 4.2%. This Video is unable to play due to Privacy Settings. Guleyin stated that the average wage increase expectation for 2022 for the 673 companies surveyed stood at 32%. You need reliable compensation planning insights to help you navigate through this unique labor market.In a series of brief surveys, you'll access key data points like annual increase budgets, structure adjustments and incentive usage that meet your immediate compensation planning needs. 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. 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. Sky-rocketing prices have begun to raise many questions from US employers on how to manage compensation budgets in times of high inflation. Savy employers are starting to do the same, expanding their labour market beyond regional boundaries. The top three sectors with the highest salary increase projected for 2022 are technology, e-commerce, and IT-enabled services. 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. For example, Life Sciences, High Tech and Other Manufacturing are all showing base pay changes over 5%, while Healthcare and Insurance/Reinsurance are coming in under 3%. Other factors commonly considered include internal equity and current salary compared to midpoint or market value. 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. When comparing the average base pay per employee from 2021 to 2022, wages increased an average of 4.9percent. To find out what creative approaches you can be taking, contact us here. New York, October 6, 2021 Employer-sponsored health plans face many unknowns in developing cost projections for 2022. The short answer is: they havent. 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 . 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. Salary data for a broad cross-section of jobs within 5 US geographic regions. Enter the characters shown in the image. This high rate of employees receiving increases results in the typical organization not being able to significantly differentiate increases between competent and outstanding performers. Simply revisit the survey and click the submit button to confirm previously entered data. 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. 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. 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). 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. Our whitepaper analyzes some of the big trends for 2022, such as improving employee wellness and leveraging remote work in your strategies for both compensation and recruitment. Across industries, Financial Services is leading the market at 4.0% merit and 4.7% total increases. Discover which types of transportation benefits are commonly offered and who is eligible to receive them with Mercer's survey on Transportation Policies. 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. Then, collect and incorporate the unique factors of your organization that will influence the budgets (e.g., financial performance, hiring needs, etc.). 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. Still, only 24% of companies will communicate an employees grade/band upon request. 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. Mercers approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Together, were redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Within the survey, each topic can be accessed via the drop-down menu icon at the top of the page. 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. 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. You may access your survey submission at any time to make updates. And Statistics Canada is now reporting CPI at 4.1% (Year-over-year August), the . Engaging articles centering on business issues our clients have tackled. 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. Review statutory and supplemental benefit details for social security, retirement, medical, death, disability and more. These include the Hospitality, Airlines, Retail and Luxury Goods sectors.. This is according to the annual Total . except for those from the High Tech industry, can also expect higher bonus payouts this year, based on Mercer's mid-2022 forecast. 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. Now part of the Mercer QuickPulse TM survey series to give you the latest insights in compensation planning and total rewards. Simply revisit the survey and click the submit button to confirm previously entered data. Participation is simple, with just one survey for all four editions. Participate to get your free snapshot report! To address talent attraction and retention issues, organizations are putting greater emphasis on flexible work and pay-for-skills approaches.