Organizations are planning salary increases and closely examining their total rewards packages for the year ahead in response to changing workforce demands. The International Foundation surveyed U.S. employers and found that 68% plan to offer salary increases for all workers in 2023.
Seventeen percent of employers reported an increase for certain classes of workers and 13% haven’t decided. The remaining 2% said they aren’t planning an increase.
The average projected salary increase is 3.9%. Employers reported:
- 0-2.5% salary increase —14%
- 3% salary increase —20%
- 3.5% salary increase —13%
- 4% salary increase —24%
- 4.5% salary increase —5%
- 5% salary increase —12%
- 5.5% salary increase —3%
- 6% or more salary increase —9%
Factors at play to determine salary increases include performance measures (57%), job level (44%), collective bargaining status (35%), employee classification (35%), department (26%), full-time/part-time status (22%), and service time (17%).
Employee needs are continuing to evolve and benefits are in the spotlight as a key tool for retention, engagement, and recruitment. Organizations are examining benefits and compensation as a whole, taking a total rewards approach. Employers are planning the following changes for 2023:
- Employee wellbeing (e.g., wellness/mental health/financial) (66%)
- Work culture and work/life benefits (e.g., DEI, community service, child/elder care, flexible work options) (57%)
- Learning and development (e.g., manager/skill-based training, educational assistance, student loan repayment) (48%)
- Health care benefits (35%)
- Retention (e.g., service awards, recognition, phased retirement) (34%)
- Paid leave (e.g., vacation, holidays, sick leave, parental, maternity, adoption, family, sabbaticals) (32%)
- At-work perks (e.g., casual dress code, transportation benefits, fitness, childcare, clinics) (27%)
- Incentive pay (e.g., year-end/sign-on/performance/discretionary/retention bonuses, profit-sharing, stock options) (24%)
- Retirement benefits (e.g., defined contribution, defined benefit, deferred compensation) (24%)
- Voluntary (employee-pay-all) benefits (15%).
For more information and access to the full survey report, visit www.ifebp.org/salaryTR.