Salary.com is the leading SaaS provider of compensation market data software, and analytics, bringing more of the trusted data and intuitive software organizations need to get pay right. But is it enough? "This data signals continued economic recovery and an increasingly tight labor market," the . Water, sewage, and other systems is the only industry within the utilities sector projected to see an increase in employment. . This increase represents a rebound from the output loss of $200.0 million seen in the 20022012 period. Culture, including recognition, is another key factor, she said. make sure you're on a federal government site. 11 This set of BLS projections is based on the 2007 North American Industry Classification System (NAICS). Employment in the industry is projected to grow by 600, from 9,000 in 2012 to 9,600 in 2022, an annual rate of increase of 0.6 percent. One-stop, member-exclusive portal for the entire suite of indicators. Organizations in France, Russia, India and South Korea are all forecasting . Adult Basic and Secondary Education and ESL Teachers Planned 2022 Salary Increases for US Workers are Trending Upward Along with these developments, the demand for assembly-line workers has declined. (See table 2. (3) Includes agriculture, forestry, fishing, and hunting data from the Current Population Survey, except for data on logging, which are from the Current Employment Statistics survey. (See table 4.) The situation in this challenging labor market certainly tests an organizations prior compensation decisions. This annual growth rate is faster than the growth rate of 1.1 percent experienced between 2002 and 2012. While projected to increase, employment in the goods-producing sectors is expected to continue its downward trend as a share of total employment. 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. The increase in the amount of Web broadcasting and virtual meetings, which reduce business costs, is expected to drive demand for this industrys output. This industry also is projected to see one of the largest increases in employment over the projection period, adding 186,600 jobs, an annual growth rate of 2.1 percent, to reach a level of just over 1.0 million jobs in 2022. Turbulence Ahead: Will 2022 Break Compensation Budgets? - SHRM Although the total number of jobs in these sectors was smaller in 2012 than it was in 2002, it will grow over the next decade, with most of the projected growth occurring in the construction sector. (See table 6.) World economic growth, which is expected to boost the need for food and feed in the next decade,24 is likely to result in increased real output in the agriculture, forestry, fishing, and hunting sector. Real output in the communications equipment manufacturing industry will be driven by increased demand for smartphones, smartphone applications, and wireless communications devices. Additionally, the total salary increase budget for 2023 is projected to increase even further to 4.3 percent. (See table 2.) Although continued technological advances are expected to drive output growth, productivity gains will more than offset any rise in employment demand from that growth, resulting in employment declines. (See table 1.). The projected increase of $99.7 billion is one of the largest increases in real output over the 20122022 period. Federal government websites often end in .gov or .mil. The expected job loss in the Postal Service accounts for more than 40 percent of the job losses within the federal government sector. Discover our practice guidance and recommendations to tackle bullying and harassment in the workplace. Next year's planned pay increases would be the highest on record since 2008. Projections for 2022 salary increase budgets jumped almost a full percentage point from 3.0 in April to 3.9 in November. However, the expected increase of 158,800 jobs is smaller than the increase of 238,000 jobs seen between 2002 and 2012. The annual increase of 3.6 percent makes this industry one of the fastest growing in terms of real output. In fact, most markets pushed their original forecasts to budgets that are higher than have been seen in nearly 20 years. The facilities support services industry provides operating staff to perform support services, such as janitorial, maintenance, and reception services, within a clients facility. Monthly Labor Review, (See table 5.) (See table 5. Organizations have had to adjust their projections as global labor market challenges have unfolded. The latest research, expert advice, and compensation best practices all in one place. Thank you for subscribing to our Labor Markets Blog. 2022 Trends in employee pay - WTW - Willis Towers Watson However, rising inflation in Argentina and Venezuela made these countries the exceptions to the rule, with increases of 7.3 and 279.9 percentage points higher in 2021 vs. 2020. The market-leading CompAnalyst SaaS platform accelerates compensation workflows, delivers real-time data, and powers accurate, equitable, and competitive compensation. For more information, please visit the company website at www.salary.com. Real output in this sector is projected to increase by $69.2 billion over the projection period, to reach $376.5 billion in 2022. The health care and social assistance sector is projected to have the most job growth, adding almost 5.0 million jobs. Although the recession ended in 2009, total nonagricultural wage and salary employment tends to lag output in recovery and did not start to grow until 2011. The majority of the employment growth in this sector is expected to occur in industries that are connected to the construction sector. Real output is expected to increase from $15.9 billion in 2012 to $18.3 billion in 2022, an increase of $2.4 billion, at 1.4 percent annually. (See table 5.) Minimum wage legislation sweeping the country is a big factor. US Compensation Planning Survey & Compensation Data | Mercer This is noteworthy, as it is above 2020s increase of 3.8%. ), Because economic growth during the present recovery has remained relatively slow compared with that of past recoveries, the expectations about the path of future GDP growth and the labor force participation rate have shifted. Combatting factors that are influencing 2022 salary increases and the The median expected basic pay increase has risen from 4% to 5%, the highest since the time series started in 2012. Find out how salary increase rates are projected to change in the coming months. It is likely that severe labor shortages will continue through 2022. Despite a 2.5% pay increase for much of the department's unionized workforce that summer, the starting hourly wage for corrections officers was still nearly $9 below what FedEx was offering. Prioritizing and segmenting increases is vital to ensure an appropriate return on investment. Real output in the wholesale trade sector is projected to experience the fastest growth among all major service-providing sectors, growing at 3.7 percent per year, from $1.1 billion in 2012 to almost $1.6 billion in 2022. Because employment in 2010 was still suffering from the effects of the recession, the 2010 base-year value is, in most instances, lower than the 2012 base-year value. The continued replacement of copper wires with fiber-optic cables, the need for increased download speeds for wireless communication, and new technologies are expected to drive demand for output in this industry. The CPS also provides the data for self-employed and unpaid family workers, and agriculture, forestry, fishing, and hunting workers. The projected output growth is faster than that in any other major sector of the economy. (See table 2.) The fast growth in residential construction can be attributed to a low starting point occasioned by the latest recession.28 The need of new housing to accommodate a growing population and to replace older housing also will play a role in this investment increase.29 The health of the housing markethealth gauged by measures such as foreclosure rates and housing startsis a reliable indicator of economic recovery. Results from our latest Salary Budget Planning Survey suggest that 96% of companies globally will increase salaries. These increases will be driven by a growing number of people reaching retirement age and by younger workers seeking advice on retirement planning. The construction sector is projected to see one of the largest and fastest increases in real output, an increase of $386.3 billion, from $773.8 billion in 2012 to almost $1.2 trillion in 2022, an annual rate of increase of 4.1 percent. This difference is due to the sectors large employment base. Increased pressure to reduce government spending and budget deficits will contribute to employment declines in the federal government. And those with degree-level or equivalent qualifications are highest in demand. However, you may be may eligible to receive additional discount on your one year WorldatWork membership. Customers are the primary stakeholder group creating pressure for organizations to invest or act on, The Great Resignation of 2021 has continued into 2022, with quit rates reaching levels last seen in the 1970s. The Associated General Contractors of America (AGC) is the leading association for the construction industry. It is difficult to assess how long this challenging labor market and inflationary cycle will last. This would slow GDP growth to below current expectations by economists (3.9 percent year-on-year, according to a Bloomberg Consensus Survey). This increase is almost the same as the increase of $30.6 billion, an annual rate of increase of 2.2 percent, experienced during the 20022012 period. For example, in the 20102020 projections, the number of wage and salary jobs in construction was projected to grow from 5.5 million in 2010 to almost 7.4 million in 2020, an annual rate of increase of 2.9 percent.10 In the 20122022 projections, the number of construction jobs is expected to increase from 5.6 million in 2012 to 7.3 million in 2022, an annual rate of increase of 2.6 percent, which is lower than the projected rate for 20102020. The Associated General Contractors The maximum earnings subject to Social Security taxes in 2023 is $160,200, up from $147,000 in 2022. March 2022 Results. Because wholesale trade has a large employment base, employment in this sector has an annual growth rate of only 0.8 percent. WorldatWork is a United States 501(c)(3) tax exempt organization. Sources:1Bureau of Labor Statistics212-Month Projection International Monetary Fund World Economic Outlook3ERI Economic Research Institute (projected increase budget)4Mercer Pulse Survey (total increases including 0%)5Willis Towers Watson (actual average increase)6Pearl Meyer Poll (implemented total base salary increases). (See table 6.) Employment fell by 0.6 percent between 2007 and 2008 and by another 4.4 percent between 2008 and 2009. Employers project average annual salary increases of 3% for executives, management, professional employees and support staff in 2022, a survey by benefits consulting firm Willis Towers Watson found. To make decisions about the value of a job, you need data from a range of sources. The projections come as overall wage growth . Source: U.S. Bureau of Labor Statistics, Employment Projections Program. The sector is projected to see the largest decrease in employment of any of the major service-providing sectors, losing 407,500 jobs between 2012 and 2022, for a decrease of 1.6 percent per year. Software as a Service is expected to become more entrenched within the software publishing business model, increasing consumer and business reliance on software applications accessed on the Internet, as well as remote, rather than local, storage. Macroeconomic factors, such as the labor force, gross domestic product (GDP) and its components, and labor productivity, affect the growth in total employment. Dont just focus on base salary adjustments. The projected employment decline in apparel manufacturing is faster than the 8.2-percent annual decline experienced during the 20022012 period, whereas the employment decline in leather and allied product manufacturing is slower than the 5.2-percent annual decline experienced during the 20022012 period. The apparel manufacturing industry also is projected to see one of the largest decreases in employment, shedding 85,800 jobs (or 50 percent of all jobs in the industry) and reaching a level of 62,300 jobs in 2022. Salary Budget Snapshot Survey Info - Mercer This resilience, along with the newly enacted Affordable Health Care Act, changing demographics, and advances in technology, should continue to drive employment growth in this sector. Current information on important topics related to compensation planning. This employment growth contrasts with the large loss of 6,000 jobs (at an annual rate of 5.0 percent) that occurred in the 20022012 period, which coincided with the recession and the downturn in the construction industry. The majority of the growth in employment can be attributed to an increase in the number of nonagricultural wage and salary workers, who will account for more than 98 percent of projected jobs in the upcoming period. (See table 2.) Rachel Suff, the CIPD's Senior Policy Adviser on employee relations, analyses the CIPDs recent submission to the UK Governments consultation draft Code of Practice on dismissal and re-engagement, Charles Cotton, the CIPD's Senior Policy Adviser on performance and reward, looks at how the gender pay gap varies by sector and employer size, and asks why more employers arent being open about their pay practices, A case study on using evidence-based practice to review selection processes for promoting police officers. Because of several factors, including efforts to reduce budget deficits, the federal government is the only major sector in the economy projected to experience output declines. Real output in the Postal Service also is expected to experience one of the fastest declines over the projection period, falling at 0.6 percent per year, to reach $53.7 billion in 2022. Tools to understand human capital management and corporate performance. "Retention of top talent is a top priority and addressing compression and internal equity with the higher attraction salaries adds to a challenging compensation landscape . The increased demand for asset rights and franchise agreements is expected to drive output growth in this industry. Now mid-year, the labor environment and inflation clearly have challenged the appropriateness of the original 2022 budgets.Although changes to salary increase budgets traditionally have trailed changes in the rate of inflation, this era of 3.0-3.5% salary increase budgets, the pandemic, the war in Ukraine, supply chain issues, low unemployment, tough labor competition, increased unionization, a looming recession, and the Great Resignation all require a competitive compensation plan and may even warrant a mid-year salary increase. (See discussion of construction employment that follows. This increase also is more than three times the increase in employment experienced in the previous period, in which only 124,900 jobs were added. The Conference Board uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. Employment in the industry is projected to reach just over 5.6 million in 2022. The number of agricultural workers, which includes wage and salary workers, self-employed people, and unpaid family workers, is expected to decline by 223,500. Looking at 2022, greater scrutiny on the labor market will continue among both employers and employees. This fall continues the declining trend seen in the previous decade. To Stay Competitive, Companies Are Increasing Pay in 2022, {{ author.WaWAuthor.Certifications.Text }}, Study: Employee Longevity Often Doesnt Pay, Bonuses to Attract and Retain Reached Record Level in 2022, Sales Compensation: Foundation and Core Principles. The service-providing sectors are expected to increase their share of nominal output from 68.3 percent in 2012 to 69.4 percent in 2022. The utilities sector is one of the three service-providing sectors projected to experience an employment decline during the 20122022 period. Health care and social assistance. Real output in this industry is projected to increase from $35.4 billion in 2012 to $42.9 billion in 2022. Older people require more health care services, thus boosting demand for these services. Although this job growth is larger than the 518,800 jobs added from 2002 to 2012, it is slower than the 5.8-percent-per-year growth experienced between 2002 and 2012. This increase is slightly larger than the increase of 142,600 experienced during the 20022012 period. More than ever, making the most of your capital means solving a complex risk-and-return equation. The number of people 65 years and older is projected to increase from 41.9 million in 2012 to 58.6 million in 2022, with this age group accounting for 17.3 percent of the population in 2022, up from 13.3 percent in 2012. Arlington, VA 22201 Most organizations globally are reporting an uptick in their median total salary increase budgets for 2022 vs what they had planned in 2021. Variable Compensation. The projected growth rate of 0.7 percent is an improvement over the 0.1-percent annual rate of decline seen between 2002 and 2012. Incorporated by Royal Charter, Registered Charity no. By contrast, the industry added only 25,000 jobs between 2002 and 2012. However, if it becomes an ongoing inflationary cycle that lasts several years, inflation needs to be considered when managing pay increases. Real output in the wholesale trade sector is projected to increase from just over $1.1 trillion in 2012 to $1.6 trillion in 2022, an annual growth rate of 3.7 percent, making this sector the second fastest growing in terms of output. 2022 Salary Increase Budgets Are the Highest Since 2008 This decline accounts for more than 44 percent of the jobs lost in the federal government sector and contrasts with the 218,500 jobs added in the industry during the previous period. While employment is projected to fall, real output in this industry is expected to increase by $59.9 billion, from $218.1 billion in 2012 to $278.0 billion in 2022, an annual growth rate of 2.5 percent. In response to todays tight labor market, more companies are looking at boosting pay this year. Although the number of jobs added over the projection period is greater than the 413,400 jobs added between 2002 and 2012, the projected annual growth rate is slower than the 4.7-percent growth rate experienced during the previous decade. (See table 1.) The mining sector is expected to experience an increase in real output over the projection period. With advances in technology, output is expected to grow faster than employment in this industry. The 2-3 Percent Raise is on the Decline Federal government. 1, 2007, http://www.fda.gov/animalveterinary/newsevents/fdaveterinariannewsletter/ucm085008.htm. . The goods-producing sectors are expected to reverse the trend of declining employment experienced between 2002 and 2012, with a rebounding construction sector accounting for most of the employment growth over the projection period. I would further explain that our pay range is wide, so that it can accommodate employees who are new to or still learning in the role or maybe not fully meeting all expectations, as well as people who contribute above and beyond the expectations for the role If the organization is transparent about pay ranges, I would share the range and where their pay rate falls within it. As a byproduct of chain-weighting, subcategories do not necessarily add to higher level categories. Currently, inflation is exerting an upward force on compensation, but we have not seen evidence of compensation growth subsequently pushing up inflation. The average 2021 salary increase budget jumped from 2.6 percent in the April 2021 survey to 3.0 percent in the November 2021 survey and the projections for 2022 salary increase budgets jumped almost a full percentage point from 3.0 in April to 3.9 in November. The construction industry was one of the hardest hit industries during the recession that ended in 2009. The November Conference Board Salary Increase Budget Survey portends a 3.9% jump in wage costs for firms in 2022, compared to 3% reported in April. However, the annual growth rate of 0.7 percent for employment is lower than the overall growth rate of employment for the economy. Real output in the manufacturing sector is projected to rise from just over $4.4 trillion in 2012 to just over $5.6 trillion in 2022, an increase of nearly $1.2 trillion. Members of The Conference Board get exclusive access to the full range of products and services that deliver Trusted Insights for What's AheadTM including webcasts, publications, data and analysis, plus discounts to conferences and events. The majority of output growth over the projection period is expected to come from the service-providing sectors. ), Agriculture, forestry, fishing, and hunting. (See table 4.) U.S. Bureau of Labor Statistics, (See table 3.) Historically, executive staff predictions are about 0.5% low. General Inquiries: (703) 548-3118 (See table 6.) This content is exclusively for WorldatWork members. Consider the following to support employee retention in this challenging environment: SalaryExperts July 2022 National Compensation Forecastprovides important additional insight into the current economic environment to support in your compensation decisions. Daniel Harding, Plug Powers director of global total rewards, said companies should look at their overall rewards philosophy, not just their base pay, when strategizing pay increases. However, that rate is slower than the annual rate of decline of 4.8 percent experienced during the 20022012 period. However, double-digit inflation rates would cause concern.
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