If you would like more details on the Mercer QuickPulse or US Compensation Planning Survey please contact us at 800-333-3070. Participation is simple, with just one survey for all four editions. Heres our take on 3 ways organizations should face the unexpected and thrive. All Mercer events about talent, investment, and health issues. As the US reverses restrictions on immigration, experts say firms may find more tech talent, which could reshape their business. 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. 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%). Chinas potential in the life sciences sector is undisputed, given its long history and tradition in medicine. Given the typical budget approval process at any organization, we get it. Manage your transportation benefits efficiently and effectively. If you need more assistance, we have team members standing by to help. their associated costs. Our national magazine, with long and short form articles on critical leadership issues. Time is limited. 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. This, combined with a strong job market, has heightened employee expectations for increased compensation this year; and employers are responding. Excluding companies that have implemented wage freezes, it is a 1.2% improvement from 5.3% this year but still below the 6.9% in 2019. 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. Only 10% of US organizations say that recessionary concerns are having a high impact on their salary increase budgets right now. 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. 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 . 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. Forgotten your login user name or password? 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. 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. Learn about healthcare offerings that help you create an inclusive benefits program to meet the needs of all employees. 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. How will you use this information to develop your proposal, knowing its preliminary? 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%. This snapshot survey gathers salary increase data for 150+ markets across the globe. 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. In our Inside Employees Minds research, covering monthly expenses was the number one concern of low wage workers, and it has become an even greater challenge amidst inflation as workers face escalating gas prices and more expensive grocery bills. 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. 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. Create a solid foundation for your pay structure. This is according to the annual Total . You need numbers to get the conversation started. Scroll down for more information on this survey. Actual and projected pay increase data at the city and national levels. 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. Bolstering the financial health of your employees can be accomplished through channels other than simple wage increases. 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. Companies in the U.S. are planning to increase employee salaries by an average of 4.1% overall in 2023, WTW's recent Salary Budget Planning Report found. Salary data for a broad cross-section of jobs within 5 US geographic regions. The disconnect in compensation budgets and rising inflation is creating frustration with workers, who have seen all of their wage gains eroded by rising costs. Overall salary increments projected for 2023 to average 4.8% across markets in Asia Pacific, but real salary increases are nominal. Consider whether starting wages require a boost either overall or in select high-cost markets. 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. The Video could not be loaded because the privacy settings are disabled. As you plan your compensation strategy and total rewards program, you'll want the latest data-driven insights about the labour market. Access everything you need to know about salary increases, economic indicators, mandatory pay schemes and more with our Global Compensation Planning Report (GCPR). 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). The last remaining legacy of this historical practice is reflected in some labor contracts and collective bargaining agreements where wage increases remain indexed toCPI. 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. If you have previously participated in the 2023 SBS survey, you can return to the survey, and enter your email address to receive the link to your existing survey submission. However, no one is planning to freeze salaries, even with looming fears of an economic downturn. The exception is Brazil, which is projecting a 6.2% salary budget increase in 2022 compared to 7.1% in 2021. Plus, why CEOs are losing confidence in their direct reports. Please see ourPrivacy Policyfor details. Compensation practices & salary increase projections for 2022. Participate to receive a free country report for all markets where you provide data! The Retail industry is expecting the biggest jump to 12.6%, from 8.1% in 2021, followed closely by the . 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. Mercerbelieves in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. 46% of . Ensure your incentive programs are competitive. Determine the right incentive program for your company by evaluating eligibility, targets and actual incentive data for STI, sales and LTI. The hot job market has led many employers to resort to off-cycle increases (outside the annual merit cycles) and adjustments to starting wages. Evaluate IT position salaries with this in-depth survey. For more data and insights from Mercers Total Remuneration Survey 2021, please see here. 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 . Together, were redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Flex work and full-time remote work are increasingly part of the employee value proposition. According to Sunit Patel, Mercer's chief actuary for health and benefits, "One issue is that people have been deferring or cancelling care for the past two years and, while that lowers cost in the short term, it can increase cost over the longer term when medical conditions . 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. Japan, New Zealand and Australia are the lowest at 2.3%, 2.6% and 2.8% respectively. With all that said, what are we looking at for 2023 preliminary budget projections? As expected, this year, the majority of organizations are planning to provide salary increases in 2022. 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. Over half (53%) of organizations said they will comply with local laws and have no plans to broaden transparency beyond what is required. Contact Us. 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. 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. We are seeing markets that have kept COVID-19 under control reporting higher than average pay raises. More than 72% indicated their budgets are finalized between October and January, with most selecting November or December. 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. This Video is unable to play due to Privacy Settings. 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. Theres one thing certain about the future of work: unpredictability. Developing a compensation strategy for remote employees will be central to their long-term retention. This Video is unable to play due to Privacy Settings. "May you live in interesting times" is an English expression claimed to be a translation of a traditional Chinese curse. These include the Hospitality, Airlines, Retail and Luxury Goods sectors.. Mercer's 2021 Total Remuneration Survey (TRS) also saw projected overall wage increases across all 18 industries 1 surveyed.. Business sentiment for 2022 remains positive as companies expect to . How will you use this information to develop your proposal, knowing its preliminary? except for those from the High Tech industry, can also expect higher bonus payouts this year, based on Mercer's mid-2022 forecast. This will continue to drive dissatisfaction with compensation programs and pressure employers to increase wages in the months ahead. The 2023 limits will reflect increases in the Consumer Price Index for All Urban Consumers (CPI-U) from the third quarter of 2021 to the third quarter of 2022. 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. Take an inclusive approach to benefits. So many things in our world are changing. For example, some companies have been considering stipends or allowances to help workers combat the rising gasprices. 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%; In 2020, inflation was a low 1.4% but salary increase budgets in 2020 and 2021 were higher (between 2.5% and 2.8%). However, there is some variation by industry: In order to accommodate the increasing annual increase budgets, salary structures are increasing as well. As skills begin to overshadow education or experience, more companies are implementing skills-based pay practices to attract new talent and retain critical skills. Banking and Financial organizations tend to openly communicate their structure information, even without being asked, more so than other industries. The average merit increase will be 3.8%, compared to 2022's 3.4%, and the total increase budget will be 4.2%. 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. 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. 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. Individual performance is still the most common factor that employers use to determine the size of an individuals annual increase. Salary increase planning made easy. 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). While pay is a driving factor for many workers, it is not the only one. 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. Its hard to say. 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. Everything you need to know about salary increases, economic indicators, mandatory pay schemes and more. Under the 'Manage Cookies' option in the footer, accept the Functional cookies to allow the video to play. Within the survey, each topic can be accessed via the drop-down menu icon at the top of the page. However, there is some variation by industry: In order to accommodate the increasing annual increase budgets, salary structures are increasing as well. You can review more of the survey findings here. Source: Mercers global pandemic survey on labour market challenges and return to the worksite. And the Workspan Podcast offers timely insights from experts in a . This certainly applies to HR Management in 2021. 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. If you would like more details on the Mercer QuickPulse or US Compensation Planning Survey please contact us at 800-333-3070. . 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. Another way to boost their wealth without breaking the bank: expand the purpose of group savings plans to allow workers to save for a variety of goals, both short- and long-term. SBS is not available to purchase for participants or non-participants; however, there are a number of purchase options available for Global Compensation Planning. 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. The Great Resignation has overwhelmed nearly every industry except two. 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. The new type of job that ChatGPT is making companies scramble to fill. Will annual increase budgets be higher when we run the survey again in November? However, should the economic situation continue to decline, that may change this outcome. 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? Buy or Participate TRS - The Key to Designing Competitive Pay Packages worldwide.

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