Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. Time is limited. Sky-rocketing prices have begun to raise many questions from US employers on how to manage compensation budgets in times of high inflation. According to the International Monetary Fund, Asia Pacific remains the fastest growing region in the world, but the gap in economic recoveries across the region is widening, with risks tilted to the downside due to uncertain pandemic dynamics as well as vaccine coverage and efficacy against new virus variants. Mercer's researchers found that as of October 2021: 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. Not only will this help better manage employee expectations around their pay in todays difficult market, it will also help prepare and respond to heightened pay transparency requirements amidst ever-changing statelaws. Participation is simple, with just one survey for all four editions. One in three organizations say they have, or plan to take, a living wage approach for hourly wages, according to Mercers Compensation Planning Survey. Please use one of these supported browsers to ensure the best experience on this site: Participate to get the latest salary increase budget data! Access to the free individual reports will be provided once each edition is published. 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. Not only can doing so enhance retainment, it can also save your organization money in the longrun. 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. 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. In these instances, companies may take action to offset the rising cost of inflation, such as lump sum awards for employees or more frequent salary reviews. Sustained merit salary increase of 4.5% for 2022, also forecasted for 2023 . 2 World Economic Outlook, International Monetary Fund, April 2021. So many things in our world are changing. Notify me when the next survey opens! For more information, visit mercer.com. Dont let pay be the reason your employees start to explore other opportunities. Bolstering the financial health of your employees can be accomplished through channels other than simple wage increases. Organizations should take care in interpreting this forecast data as there is a significant variance in company practices regarding the types of pay increases that are included in these projections. The short answer is: they havent. 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. While pay transparency might be in the news more and more, employers have been slow to modify their communication of pay ranges. 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. 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. Employers are budgeting an average of 3.8% for merit increases compared to the 3.4% actually delivered this year and 4.2% for their total budget increase for 2023. And the Workspan Podcast offers timely insights from experts in a . 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. Increases are forecast at 2.8 per cent, excluding freezes, nearly identical to the 2.7 per cent increase recorded in 2019. While nearly 80% of organizations reported that they are just in the preliminary stages of determining their 2023 annual . Recent articles reported by our team on important business-news developments. Separate promotion budgets still dont seem to be the norm only 18% indicated that they have them. We are seeing markets that have kept COVID-19 under control reporting higher than average pay raises. Start by examining your organizations work-life balance, opportunities for internal promotions and benefits packages. If you need more assistance, we have team members standing by to help. Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. 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. In 2020 when the pandemic began, Fusco adds, just . When comparing the average base pay per employee from 2021 to 2022, wages increased an average of 4.9percent. Please note: To be considered a participant, confirmation of the data is required in each edition, even if your data has not changed. 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. All Rights Reserved. Understanding where your offer may not be competitive enough can give you insights into what employees truly want out of their workplace. First look at increase budgets for North America. 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%. First off, use this as directional information and combine it with additional sources. Give us a call at 1-855-286-5302 or email [email protected]. Determine the right incentive program for your company by evaluating eligibility, targets and actual incentive data for STI, sales and LTI. Everything you need to know about salary increases, economic indicators, mandatory pay schemes and more. 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. Likewise, we are seeing an increase in the total increase budget for 2023: 4.2% for 2023, compared to 3.8% in 2022. These are the highest budgets weve seen since the 2008 financial crisis. Only 2% 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. Welcome to the Workspan Family of Content. Across the industries surveyed, the Chemicals industry is expected to see the biggest rebound in salary increment at 5.5% in 2022, up from 4.9% in 2021. Flex work and full-time remote work are increasingly part of the employee value proposition. Top-performing individuals can be enticed with multi-year bonuses or lump sums to reflect current market premiums. Despite what was projected in 2021 for 2022 salary increases, it has gone up. 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. 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. This year, Mercer's Total Remuneration Survey (TRS) also saw higher projected increments across most of the 18 1 industries surveyed. Likewise, employees with small children have also had a pandemic experience that is vastly different from those who have teenagers or no children. Please see ourPrivacy Policyfor details. Employers who successfully reshape their workforce and total rewards models would gain an advantage in retaining talent and keeping employees engaged and productive even as they move beyond the pandemic. Together, were redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. The projected increment is higher than the pre-pandemic levels of 2019 by 50 basis points. Review statutory and supplemental benefit details for social security, retirement, medical, death, disability and more. As a result, forecasted increases are likely understated to actual total increase practices by as much as 25-33% of the overall budget. A separate Grant Thornton survey of 1,500 full-time U.S. employees found that 51% would give up a 10% to 20% salary increase . 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. Employers are increasingly using off-cycle increases to combat retention concerns, along with other issues. 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. Other industries such as High Tech and Consumer Goods also saw increases over prior year. The Leader in Executive Compensation Consulting | Salary Survey | Pearl . How much larger will increase budgets be for 2023? You need numbers to get the conversation started. 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. Cost of labor is a function of supply and demand, and is typically measured through compensation surveys that contain the going rate for jobs. 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. Its hard to say. Now part of the Mercer QuickPulseTM survey series to give you the latest insights in compensation planning and total rewards. 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. As we look to 2023, Korn Ferry talent acquisition experts offer their thoughts on what the coming year will bring to the job market. This snapshot survey is conducted four times per year and provides up-to-date salary increase budget data for 100+ markets across the globe. 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). 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. 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. Banking and Financial organizations tend to openly communicate their structure information, even without being asked, more so than other industries. 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%). 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. Ensure your incentive programs are competitive. Compensation practices & salary increase projections for 2022. 2022 by Mercer that polled 636 organizations across 15 industries in Thailand between April and June this year. Share. 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. Commenting on the industry salary trends, Mr Swani said, Industries that were relatively immune to the impact of the pandemic, such as Consumer Goods, Chemicals, Life Sciences and High Tech, are providing merit salary increases as usual. Plus, why CEOs are losing confidence in their direct reports. This snapshot survey is conducted four times per year and provides up-to-date salary increase budgets for 100+ markets across the globe. Then, collect and incorporate the unique factors of your organization that will influence the budgets (e.g., financial performance, hiring needs, etc.). From that lens, we are seeing that salaries across the board have increased 4.0%, but there are some significant differences by industry. 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. The pace of change in the market may also warrant employers to make adjustments outside of the traditional annual paycycles. Industry-wise, financial services is . Participate to get your free snapshot report! 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. The survey is available in English, Portuguese and Spanish. Could the results create an entirely new approach to succession planning? 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. Likewise, we are seeing an increase in the total increase budget for 2023: 4.2% for 2023, compared to 3.8% in 2022. This survey ran from December 2021 to January 2022 and it reflects responses from 5,042 participants in 116 countries. 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). New York, October 6, 2021 Employer-sponsored health plans face many unknowns in developing cost projections for 2022. As a SBS participant, you will receive free access to individual reports for all available markets in which you have submitted data. Most employers reported that the pay increases are in direct response to . Resources: Leading in the New Shape of Work. Separate promotion budgets still dont seem to be the norm only 24% indicated that they have them. The pandemic had the effect of thrusting inequality into the spotlightnot just in healthcare or law enforcement, but in the workplace, as well. Of those companies that indicated COVID-19 had a high impact on their .