Wage increase budgets reach their highest level in 20 years
WorldatWork annual survey finds average salary increase budgets were 4.1% in 2022 and projected at 4.1% in 2023
SCOTTSDALE, Ariz., September 1, 2022 /PRNewswire/ — WorldatWork’s “2022-23 Salary Budget Survey” has revealed that salary increase budgets have reached their highest level in 20 years. Salary increase budgets in United States averaged 4.1% in 2022 with a median of 3.8% and is expected to average 4.1% in 2023.
Now in its 49th year, WorldatWork’s Salary Budget Survey is the longest-running survey of its kind and provides CEOs, CFOs and HR professionals with robust year-over-year data to design competitive compensation and total rewards strategies that attract and retain high performers. The data covers nearly 14 million employees from 19 countries and provides previous years’ data on salary increase budgets dating back to 1974 (US). An easy-to-use online reporting tool allows users to explore and create custom reports based on industry and geography (in the US and Canada) allowing them to make informed projections of their organization’s salary budget.
In the spring of 2021, U.S. respondents predicted that total salary increase budgets for 2022 would increase slightly from the 2021 average of 3% to an average of 3.3%, while the median forecast (3%) showed no change from 2021 actual median increase of 3%.
The higher predicted average of 3.3% suggests that a portion of respondents expected significantly higher increase budgets in the future, perhaps because they expected to offset salary increases which have been delayed or postponed in previous years and to cope with increasing labor market pressure. A special “WorldatWork Salary Budget Quick Poll” conducted in January 2022 reported that more than half of respondents had increased their salary increase budget projections for 2022 in the past six months – 5% more than twice and 49% up to twice.
“Organizations of all kinds, from government entities to global multinationals to small businesses, rely on this annual survey to benchmark and plan salary increase budgets to maintain the workforce they need. need,” said Sue Holloway, Director, WorldatWork. “The rapid increase in salary increase budgets over the past two years, combined with today’s unstable economic environment, is forcing HR professionals to harness data and think strategically when make recommendations on the 2023 compensation budget and negotiate with CFOs.”
When asked how certain they were of their 2023 salary increase budget forecasts, almost half of respondents (48%) felt moderately certain and more than a quarter (26%) felt felt slightly certain. Almost equal proportions said they were not at all certain (13%) and very certain (12%) while only a few (2%) felt extremely certain. WorldatWork will conduct a special survey in the fall to check if the projections change over the year.
Examples of results:
- Salary increase schedule. The average time between raises across all employee categories returned to the historical average of 12 months, with the average for executives just over 12.3 months.
- Proportion of workforce receiving raises. On average, participating organizations reported granting at least some base salary increases (e.g., general raise/COLA, merit raise) to 88% of employees in 2022.
- Canada expects similar increases. The average total salary increase budget in Canada was 3.7% in 2022 (median of 3.2%), an increase of more than one percentage point from the 2.6% increase budgeted in 2021 and exceeding the 2022 projection (2.9%) by 0.8 percentage points.
- Sharp increase in budgets reported in India. India again saw the largest salary increase budget among the countries in this survey. With an average total increase of 10.1%, salary increase budgets slightly exceeded their pre-pandemic level of 9.9%
- The UK up significantly from pre-pandemic levels. UK pay rise budgets averaged 3.8% in 2022, topping pre-pandemic levels of 3.1% last seen in 2018 and 2019.
- Big budget jump in Brazil. Brazil saw the largest year-over-year increase in salary increase budget, from 4.3% in 2021 to 6.7% in 2022.
About the study
WorldatWork collected survey data for the “2022-2023 Salary Budget Survey” from May 2 to June 16, 2022. The survey was completed by 2,113 organizations, many of which provided data for multiple countries, resulting in 4,759 complete survey responses. Members were asked to respond for the United States and 18 other countries: Australia, Belgium, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Netherlands, Russia, Singapore, Spain, Sweden, Swiss and the UK.
About WorldatWork
WorldatWork brings together the best professionals from around the world to provide leading education, leadership and community dedicated to improving the employee experience and organizational performance. For more than 65 years, WorldatWork has set the standard for best practice in rewards, professional development and human capital leadership. Over 90% of Global 500 companies trust and rely on WorldatWork training and certified professionals to optimize their employee reward, engagement and retention efforts.
Media Contact:
Chris RoeMarketing director
4803046847
[email protected]
SOURCE WorldatWork
