At MorganHR, we believe that a little recognition can go a long way. As we close out 2022 and begin preparing for 2023, now is an excellent time to take a look at recent compensation trends in the United States. The labor market is one of the most complicated in recent history, with hiring on a steady upward trajectory but an increase in inflation concerns putting many plans off.
It’s no secret that the workforce is changing. Gone are the days when employees would stay with the same company for their entire careers. Nowadays, it’s not uncommon for people to change jobs every few years. And while there are many reasons for this, one of the most significant is the employer-employee dynamic.
Leadership is offering more benefits, but also more flexibility
Thanks to the ever-growing list of employee rights and benefits, employees now have more power than ever before. As a result, employers must work harder to keep their employees happy. Otherwise, they run the risk of losing them to a competitor. This is reflected in the top reasons executives cited for their employees leaving voluntarily. Career change still ranked highest (41%), but poor work-life balance (36%) and disengagement or burnout (30%) were right behind. This shows that employees are no longer willing to put up with an unsatisfactory work situation. They would rather move on to something better. So, if you want to keep your employees happy and prevent them from leaving, you need to create a work environment that is conducive to their well-being.
CEO Benchmarking Report found that 37% of respondents offer new or more generous benefits, while 33% introduced flexible work options. Those responses were closely followed by more frequent days off and changes to roles or job requirements (both 29%) as the top strategies for turning back turnover. It’s more evidence that no one has the perfect answer, but most businesses are trying something to retain their workers. So, what are you doing to keep your employees happy? If you’re not sure, now might be a good time to ask them.
Three out of five organizations plan to increase their payroll budget next year
According to WorldatWork’s Salary Budget Survey, salary increase budgets reached their highest level in 20 years in the United States, rising to an average of 4.1% in 2022 with a 3.8% median. This is good news for employees as they head into negotiations for the coming year. Here’s a closer look at what the data tells us about compensation trends in the United States.
Even with the global pandemic, organizations are planning to increase pay budgets in 2023. In fact, US organizations are projecting an average salary increase budget of 4.1% for 2023, up from 3.9% in 2020 and 3.7% in 2021. These increases come as organizations seek to attract and retain top talent in a highly competitive market. In addition, many organizations are using salary increases as a tool to reward employees for their hard work and dedication during difficult times.
Not all employees will see the same level of increase, however. While the average budgeted salary increase is 4.1%, the median budgeted salary increase is 3.8%. This suggests that there will be some variability in pay increases from organization to organization. In addition, certain groups are more likely to see higher salary increases than others. For example, employees with highly specialized skills or experience are typically rewarded with larger increases than entry-level or early in their careers. Similarly, workers who have performed well above expectations are often rewarded with larger salary increases than those who have met or exceeded expectations but have not gone above and beyond.
Creating a Market-Competitive Employee Experience
A lot has been said about the importance of providing a great employee experience. But what does that really mean? And why is it so important? Quite simply, the employee experience is everything that an employee encounters during their time with a company, from the onboarding process to their day-to-day work tasks and responsibilities, to the way they are managed and developed, to their benefits and compensation. And sometimes, this might weigh even more than their wages.
In order to create a great employee experience, companies need to take a strategic and holistic approach that takes into account all of these different elements. This can be a challenge, especially as companies look to be more market-competitive in their practices and cost savings. However, it is possible to strike the right balance between these two imperatives by focusing on the needs of the current workforce and aligning them with the organization’s talent strategy.
The first step in creating a great employee experience is to understand what your employees need and want. You can’t just assume that you know what’s best for them – you need to ask them directly what would make their working life better. This can be done through surveys, focus groups, or one-on-one interviews. Once you have a good understanding of what your employees are looking for, you can start to put together a plan to improve their experience.
It’s important to keep in mind that not all employees are the same. Different people will value different aspects of their job and have different needs. As such, it’s important to tailor your approach to each individual. Some may appreciate more flexible working arrangements, while others may prefer more development opportunities or better compensation. The key is to find the right mix of elements that will appeal to the majority of your workforce.
The Take-Away
It’s important to remember that the employee experience doesn’t happen in a vacuum – it happens within the context of the overall organizational culture. To truly create a great employee experience, companies need to focus on creating a positive and supportive culture where people feel valued and respected. This can be achieved through initiatives such as training managers on how to best support their team members, encouraging open communication channels between employees and management, and providing opportunities for employees to give feedback on their experiences.
Creating a great employee experience is essential for any organization that wants to attract and retain top talent. However, it’s important to remember that this isn’t something that can be achieved overnight – it requires careful planning and execution. By taking into account the needs of your workforce and aligning them with your talent strategy, you can create an employee experience that will set your company apart from the competition.
Further Steps
We know that your compensation strategy is key to success. That’s why we offer deep experience in base salary benchmarking, incentive program development, and total rewards for you or any other members within the organization who need help with their workforce planning needs! Check out our latest insights on compensation strategy or contact us for other helpful resources.