Companies gave employees an average pay increase of 2.8% in 2021. Notably, raises are returning to pre-pandemic levels. For example, instead of trying to apply a single global plan, group countries based on their economic, labor market conditions, or statutory requirements (e.g., mandatory indexation, collective bargaining). Trends that will drive 2023 rewards decisions. At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Following its recent withdrawal from the European Union, the United Kingdom topped the group at 1.5 percentage points higher in 2022 compared to 2021, with increase budgets of 4.3% in 2022 compared to 2.8% in 2021. Companies are now budgeting an overall average increase of 3.4% in 2022, compared with the average 3.0% increase they had budgeted in June 2021. This sounds like a simple question, but a clear answer isnt always easy. 2023 employee pay trends - Willis Towers Watson Only Australia, India, Italy, United States and Brazil saw average increase budgets in 2021 above those in 2020. Clients depend on us for specialized industry expertise. | Average increase of salary budgets in 2023 forecasted by the 15 largest economies. Editors note: At the time of publication, WTW has reported that salary budgets in the U.S. are showing median salary budget 2021 actuals and 2022 projections of 3% (with more than 1,000 companies reporting). Turbulence Ahead: Will 2022 Break Compensation Budgets? - SHRM 2023 Actuarial Insurance Consulting Graduate Programme, Life Many large U.S. employers followed Amazons lead of paying hourly workers $15 per hour, even as Amazon announced that its average hourly wage would go up to $18 per hour. Labor market and inflationary pressure fueling higher-than-projected increases. 2023 looks to be a 'banner year' for salary increases For example, you may want to retain critical roles and resolve inequity issues. The Salary Budget Planning Report is compiled by WTWs Data Services practice. 2022 will see salaries and other aspects of life return to some sense of normality and more companies implementing regular salary reviews and higher increases than in 2021. Have feedback on this article? According to the survey, employer concerns over their ability to hire and retain talent far outweighed other factors for boosting salary increases. Its easy to forget that salary increase budgets are driven by several factors and, as such, should be viewed as one piece of a larger picture. Also, remember that every organization will have its own set of goals and priorities. In countries that are experiencing historically high inflation (e.g., U.S., UK), in addition to higher salary budgets that may still lag inflation, organizations may need more creative solutions, such as targeting by talent segment or offering one-time cost-of-living adjustments. White Plains, New York. The United States is projecting an average increase of 3.4% compared to 3.1% in 2021 and 3% in 2020, which is the highest since 2008. Share this article. ARLINGTON, VA, January 13, 2022 - Fueled by tight labor markets, U.S. employers are boosting their original salary increase projections for 2022 as the Great Resignation shows no signs of abating. As noted, unemployment in January and February 2020 before the pandemic took hold was lower than it is today. Increased budgets are evident across most of the worlds largest economies. Supplemental tactics including sign-on bonuses, equity and cash retention, and recognition enhancements plus employee experience drivers such as enhanced career enablement, emphasis on mental wellbeing, focus on DEI [diversity, equity and inclusion], and learning and reskilling opportunities can combine to improve the effectiveness of a compensation program. Click to return to the beginning of the menu or press escape to close. Only 3% of employers freezing salaries. On the other hand, companies recognize they need to boost compensation with sign-on, referral and retention bonuses; skill premiums; midyear adjustments; or pay raises. Organizations in France, Russia, India and South Korea are all forecasting salary increase budgets that are more than half a percentage point higher in 2022 compared to the prior year. Companies are now budgeting an overall average increase of 3.4% in 2022, compared with the average 3.0% increase they had budgeted in June 2021. Comparing average salary increases for the top 15 largest economies, Figure 2. Workers could see average raises of 4.1% in 2023 the largest pay bump 2022-2023 is shaping up to be . The second-gen Sonos Beam and other Sonos speakers are on sale at Best Buy. The 2021 headline salary increase is 1.9%, significantly lower than last year's planned increase of 2.5%, but with inflation at only 0.4%, the 2021 'real' increase is at 1.5% compared to 0.4% last year. Defined Contribution Pensions Consultant - Dublin - Willis Towers Watson The report summarizes the findings of WTW's annual survey on salary movement and reviews practices as a means of helping companies with their compensation planning for 2022 and beyond. . From determining how work gets done and how its valued to improving the health and financial wellbeing of your workforce, we add perspective. Winning the talent race will require employers to continue to be creative and comprehensive with their Total Rewards strategy," said Lesli Jennings, senior director, Work & Rewards, WTW. of organizations around the world reported that 2022 salary budgets were higher than their 2021 compensation planning cycle. Belgium), your salary increases will need to follow the guidelines. High unemployment started to ease in the summer of 2020 and was back below 7% by the end of the year. The report provides data on actual salary budget increase percentages for the past and current years, along with projected increases for next year. And a quarter of employers plan to give increases in the range of 5%-7% in 2023. That's the finding from a new survey by . Dont underestimate the importance of this education and communication effort. Attracting and retaining employees remains a major challenge for employers. Click to return to the beginning of the menu or press escape to close. While companies are boosting salary budgets, bigger pay raises alone wont be enough to help address their attraction and retention challenges. Determine strategic goals that align with both your compensation philosophy and your organizations business strategy. However, bowing to public pressure and succumbing to gut instinct wont serve anyone in the long term. Salaries in the Asia Pacific are likely to rise next year, according to the latest figures from Willis Towers Watson, and the increase will be the highest among regions globally. Salary Surveys - WTW - Willis Towers Watson For instance, as a result of recognizing that labor shortages, and not inflation, are the primary driver of growing salary budgets, many employers are targeting certain segments such as hourly workers, digital talent and workers with in-demand skills to receive higher pay.". However, the duration and scale are unknown. Case in point: WTW's July 2022 Salary Budget Planning Survey results show that 96% of companies globally increased salaries (compared to 63% in 2020), and overall budgets have increased significantly over prior years. In 2020, we saw financial outcomes of extremes that resulted in some industries having significant financial gains and others huge losses. Figure 1. By More than ever, making the most of your capital means solving a complex risk-and-return equation. While the overall A&E marketplace is relatively stable, most A&E professional liability carriers have reported an increase in severity of claims. Thats almost a full percentage point higher. Dont risk underinsurance protect yourself against inflation now, Global Semiconductor Industry Survey Report, Top 5 employee compensation trends for 2021, Executive Compensation and Board Advisory, Financial, Executive and Professional Risks (FINEX), Preparing for the EU Shareholders Rights Directive. It also means going beyond a one-size-fits-all approach to pay increases and calls for differentiation among countries, at-risk or critical talent, representing a multi-factor approach that goes beyond pay to optimize total rewards. December 13, 2022 As part of a specialist Defined Contribution (DC) team which advises . A total of 1,004 U.S. employers responded. That's a far cry from just a couple of years ago. A quarterly newsletter containing insights and resources related to construction risk in the United Kingdom. It will be interesting to observe whether these nations are, in fact, able to maintain these levels. However, also consider that the rate was 3.5% in January and February 2020, and then went up slightly in March 2020 to 4.4%. This is up from the average 2.7% increases companies granted this year. In July 2022, organizations in the 15 largest economies projected increases of 4.6% in 2023, however the December 2022 SBP tells a different story, with 2023 projections closer to 5.5%. A total of 725 UK firms took part in a global study about salary budgets and recruitment by advisory, broking, and solutions business Willis Towers Watson (WTW), which revealed that 2022's pay increase is set to be more than the 2.4% average this year. The survey was conducted in October and November 2021. According to the survey, employer concerns over their ability to hire and retain talent far outweighed other factors for boosting salary increases. 57% of organizations reported that their budget for the 2022 cycle is higher than their 2021 compensation planning cycle. 3.8%, 2008: 3.7%, 2009: 2.2%, 2010: 2.5%, 2011: 2.8%, 2012: 2.9%, 2013: 3%, Figure 1. Click to return to the beginning of the menu or press escape to close. While current pay budgets have risen to 4.2%, in 2022 more than two-thirds of companies (70%) spent more than they originally planned on pay adjustments for the past 12 months. of respondents in the Willis . Why? More than ever, making the most of your capital means solving a complex risk-and-return equation. Salary budget increases have remained relatively stable (arguably stagnant) in the past decade. The 2021 General Industry Salary Budget Survey was conducted by Willis Towers Watson Data Services between April and June 2021. On the one hand, employers need to continue effectively managing fixed costs as they rebound from the pandemic. This is noteworthy, as it is above 2020s increase of 3.8%. Benefits Administration and Outsourcing Solutions, Executive Compensation and Board Advisory, Financial, Executive and Professional Risks (FINEX). Jan 2022 - Present 1 year 3 months. 2022 Trends in employee pay - WTW - Willis Towers Watson The average salary for Actuarial Analyst at companies like WILLIS TOWERS WATSON in the United States is $78,127 as of October 27, 2022, but the range typically falls between $68,656 and $87,599. From determining how work gets done and how its valued to improving the health and financial wellbeing of your workforce, we add perspective. With attraction and retention issues persisting, employers should consider the overall employee experience and not just salary increases, said Lesli Jennings, North America leader, Work Rewards and Careers, WTW. . Indian employees likely to see 10% median salary increase in 2023: WTW Editor's note: At the time of publication, WTW has reported that salary budgets in the U.S. are showing median salary budget 2021 actuals and 2022 projections of 3% (with more than 1,000 companies reporting). For more countries, budgets for the upcoming cycle have changed from increases projected earlier in 2020. Expect 9-10% salary hikes this year; Deloitte says pay increment Yet, salary increases still will need to be allocated in line with market conditions and influenced by clear business priorities. That's according to a new survey by WTW (Willis Towers Watson, NASDAQ: WTW), a leading global advisory, broking and solutions company. According to WTWs John Bremen, despite overall population growth (11.9%) and labor force growth (4.5%), the labor force shrank 3.4% from 2010 to 2020 among the historical entry-level talent pool (workers ages 16 to 24). This projection is followed by 2023 projections in the United Kingdom (4.0%), Germany (3.8%), and Spain (3.6%). The best place to start? The report summarizes the findings of WTWs annual survey on salary movement and reviews practices as a means of helping companies with their compensation planning for 2023 and beyond. Labor markets and inflation have made 2022 another year of unexpected changes. Photo by Chris Welch / The Verge We saw only moderate changes in 2021 salary budget projections when employers were planning for 2022. Of the 15 largest economies, 10 countries had increases in 2021 that were in line or just (on average 0.1 percentage points) below those in 2020. Remember that a one-size-fits-all approach wont work. Hatti Johansson Oil and gas industry companies, as well as leisure and hospitality industry companies, are budgeting significantly lower salary increases for employees (2.4%). Read more at The Business Times. To address ongoing challenges, organizations are deciding how to focus their compensation spend for the greatest impact. Consider other important components of your employer-employee deal, including bonuses, long-term incentives, health and wellness benefits, career progression, and learning and development opportunities. The report summarizes the findings of WTWs annual survey on salary movement and reviews practices as a means of helping companies with their compensation planning for 2022 and beyond. Canadian employers planning larger pay raises for 2022 - WTW Given the crescendo of these questions, this article helps explain why projections are what they are, and serves as food for thought about how to think of salary budgets as a barometer of overall compensation spend in the future. HR pros plan for the highest pay increases in nearly 20 years, By Salary increases for 2022 going up | HRMorning From determining how work gets done and how its valued to improving the health and financial wellbeing of your workforce, we add perspective. Organizations in France, Russia, India and South Korea are all forecasting . What are you trying to achieve with salary increases? The group of hyper-inflation countries (e.g., Argentina, Turkey) experiencing hyperinflation of 30% or more are in a different category altogether. Set aside salary budget projections to look at real wage growth. How inflation influences pay practices, Limit the Use of My Sensitive Personal Information. Beyond competitive salaries, which are table stakes at the moment, companies also need to focus their spend on a diverse set of health, wealth and career programs to drive employee engagement, said Hartmann. While salary budget projections may still be the best way to understand how others are setting salary budgets for the coming year, are they really the best barometer to reflect pay outcomes in times of extreme labor market changes? In addition, two-thirds of respondents (67%) have provided more workplace flexibility, while 61% have already put broader emphasis on diversity, equity and inclusion (DEI). Salaried employees are likely to get a bigger pay hike in 2023, with companies budgeting for an overall median increase of 10%, according to the Willis Towers Watson Salary Budget Planning Report. 2021 was another year of change, with tightening labor markets pushing salary increases around the world. ARLINGTON, VA, July 20, 2021 Pay raises are making a comeback. January 12, 2022. That's according to a new survey by WTW (Willis Towers Watson, NASDAQ: WTW), a leading global advisory, broking and solutions company. More than ever, making the most of your capital means solving a complex risk-and-return equation. Organizations should prioritize their actions based on the needs of both employers and employees and pay close attention to market data to inform any changes.. Average Willis Towers Watson Salary | PayScale Also, take a Total Rewards perspective. But increased salary budgets only make it more critical for organizations to have a clear strategy for awarding pay increases as effectively as possible, prioritize critical employees and hot jobs, and differentiate for performance. For those industries that were losers in the pandemic, going from a 1% or 2% salary budget back to 3% is a huge increase, even though it isnt telling that story in the overall salary budget data. Lori Wisper Together, we unlock potential. Employers looked to 2021 with optimism and an eye toward recovery, but many organizations around the world had to adjust to tumultuous business conditions that emerged from the pandemic. Our salary surveys provide robust, detailed salary data for all industries and countries, covering executives and employees at all levels. Willis Towers Watson Survey. Avg Price Recovery. This makes it more critical for organizations to have a clear strategy for awarding pay increases as effectively as possible. In fact, most markets pushed their original forecasts to budgets that are higher than have been seen in nearly 20 years. . In addition to pay pressures, three in four respondents (75%) also are experiencing problems with attracting and retaining talent a figure that has nearly tripled since 2020. Copyright 2023 WTW. According to the survey, companies project average salary increases of 3.0% for executives, management and professional employees, and support staff in 2022. These are followed by Germany, Spain, United Kingdom, China, Canada and Mexico, which have a projection of 4 percentage points higher in 2022 compared to 2021. If so, then focus your actions on leveraging salary budgets to adjust any major diversity, equity and inclusion issues (including a fair pay analysis) and prioritizing in-demand and business-critical talent. Willis Towers Watson survey on salary trends published in October had projected a median increase of 9.3% in salaries in 2022, as against an increase of 8.1% in 2021. We have answers. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance. 2009-Project 2011 Data: World at Work Surveys Only. That projected wage growth is faster than actual raises paid in the prior . KORN FERRYS SALARY INCREMENT REWARD SURVEY - The Economic Times The Verge - Wyyo.lehmannwerbung.de UBS Adjusts Willis Towers Watson's Price Target to $248 From $235, Maintains Neutral Ra.. Willis Towers Watson Public : WTW Appoints Leigh Ann Rodgers Western Region Client Strateg.. Goldman Sachs Upgrades Willis Towers Watson to Buy From Neutral, Price Target is $290. Asia-Pacific companies planning larger pay raises in 2022: Willis Remember to segment your workforce, for example by employee level (e.g., hourly, professional, executive), performance level or jobs in which youre having trouble attracting and retaining talent. That's according to a new survey by WTW (Willis Towers Watson, NASDAQ: WTW), a leading global advisory, broking and solutions company. 96% Indicators show that employers are continuing to return to a more-normal salary review process this year as compared with the freezes of 2020. More than ever, making the most of your capital means solving a complex risk-and-return equation. And in the 15 largest economies, that 2023 projection is 1.5 percentage points higher than the 4.0% actual increase in 2021 and the 5.0% average actual increase granted in 2022. Most organizations in the 15 largest economies experienced a dip in 2021 compared to their 2020 actual budgets, increasing their salary budgets by an average of 4.0% among those granting increases. ARLINGTON, VA, January 13, 2022 Fueled by tight labor markets, U.S. employers are boosting their original salary increase projections for 2022 as the Great Resignation shows no signs of abating. In Europe, projections for 2023 salary increases are also well above 2022 actuals with the highest increases in Belgium (10.5%), the United Kingdom (5.1%), Germany (4.6%) and Spain (3.6%). They also are looking at how to focus their salary budgets for the greatest impact, with 2022 projections showing that 96% of companies globally will increase salaries and far fewer will implement salary freezes than in 2021 or 2020. Prioritizing and segmenting increases is vital for an appropriate return on investment. Your ability to manage risk is key to your thriving in an uncertain world. Please note that the data is from multinational organizations with operations in Russia; data from local Russian organizations was not collected in 2022. In response to a tight labor market, employers are planning to up employee salaries in the biggest projected hike in 15 years, new data from Willis Towers Watson finds. Finally, it will be more important than ever to educate both managers and employees on cost of living and inflation versus the cost of labor. The wage increases workers in South Africa can expect in 2022 Davonne Stephens - Financial & Placement Associate - Willis Towers "As with their responses to the pandemic, employers are looking to be resilient and adaptable in their approach. Address your talent issues with a disciplined salary review process. Early Fall may signal the beginning of autumn colors, pumpkin spice everything, and sweater weather for some. Companies are now budgeting an overall average increase of 3.4% in 2022, compared with the average 3.0% increase they had budgeted in June 2021. Clients depend on us for specialized industry expertise. All rights reserved. Market data provides a good start for navigating the year ahead. Among organizations that are planning to grant increases, average salary increases of 4.3% are forecasted (vs. 4.0% actual increases in 2021) for the top 15 economies in the world. July 20, 2022. January 3, 2023. This feels comparatively low especially if you look back at April 2020 when unemployment spiked at 14.8%. By Zoe Wickens 14th January 2022 9:04 am. Results from our latest Salary Budget Planning Survey suggest that 96% of companies globally will increase salaries. Clients depend on us for specialized industry expertise. However, we have not seen a labor market like this one in quite some time if ever. Again: We ask why? Salary ranges can vary widely depending on many important factors, including education, certifications, additional skills, the number of years you have . 2021 salary increases were notably softer than initially expected, with most markets dialing down their original forecasts to be more in line or slightly below 2020 salary budgets. Thats because employees get promoted, they get counteroffers and retention monies, and equity increases. While it is common for the final increases for the year and projections for the following year to change over time as organizations learn more about the factors affecting increases (e.g., unemployment, supply and demand of labor), the change typically is not this dramatic. You will need to make it a point to help them see beyond salary increases to other actions that have an impact on the workforce. The United States is projecting an average increase of 4.6% in 2023, which is above the 2022 average actual increase of 4.2% the highest since 2008 and higher than 3.1% in 2021 and 3% in 2020. Salary budgets are not quite as responsive to changes in the labor market as we might think. This translates to . Gonzalo brings in-excess of 15 years of high-profile B2B global sales experience, diverse international business development, enterprise key account management, and vast HR consulting expertise, most recently selling SaaS solutions in the talent management world with Korn Ferry/Qualtrics, Great Place to Work, Culture Amp and Willis Towers Watson.<br><br>Prior to taking up his current post at .