Changing employee expectations since the 2020 global pandemic and the subsequent Great Resignation continue to have ripple effects across industries, and the Tech, Media and Gaming sector is no exception, according to the results of WTW’s Global Tech, Media and Gaming (TMG) survey results.
In 2022, organizations not only grappled with high attraction and an increased competition for talent, but also inflation rates that hit historical highs in many markets. Given these increasing pressures and the desire to retain key talent, organizations reacted by adjusting their approach to salary budgets and pay adjustments throughout the year.
The demand for higher pay has bled into the talent market with candidates demanding higher pay premiums than ever before. In the Tech, Media and Gaming sector, organizations have experienced different degrees of demand across countries. See Figure 1.
| Intermediate | Career | Specialist | Expert | Recognized Expert | Average | |
|---|---|---|---|---|---|---|
| United States | 0% | 1% | 2% | 2% | 2% | 1% |
| Brazil | 8% | 5% | 7% | 2% | 21% | 8% |
| United Kingdom | -8% | 5% | 9% | 10% | 9% | 5% |
| France | -8% | -5% | 0% | 6% | 15% | 2% |
| China (Beijing) | 10% | 5% | 10% | 59% | 25% | 24% |
For example, China (and Beijing specifically) has led the field with an average, whopping 24% pay premium for new employees. Meanwhile, Brazil and the United Kingdom have seen similar new-hire premiums at an average 8% and 5%, respectively. Additionally, premiums in these five key markets have increased with seniority, a clear indication that it will take more to attract more experienced candidates.
At the other end of the spectrum, France (2%) and the United States (1.4%) had the lowest new-hire premiums on average. In fact, France only saw premiums kick in from P5 (6%) to P6 (15%). However, not all jobs are created equal. Some roles have new-hire premiums that are far above average for the country (see Figure 2):
| Canada |
1. Legal Generalist 2. Machine Learning 3. Development Operations |
|---|---|
| United States |
1. Legal Generalist 2. Machine Learning 3. Cloud Computing Architecture |
| Brazil |
1. Technology Product Development Generalist 2. Strategy Consulting 3. Machine Learning |
| United Kingdom |
1. Product Development: Data Security 2. Technology Consulting: Enterprise Application Integration 3. Media Contract Negotiations |
| France |
1. Corporate Development and Licensing Generalist 2. Government Relations 3. Strategy Consulting |
| Germany |
1. Journalism, Writing/Reporting, News 2. Mergers and Acquisitions 3. Cloud Computing Engineering |
| Italy |
1. Journalism, Writing/Reporting, News 2. IT Outsourcing Project/Program Management 3. Corporate Development |
| China (Beijing) |
1. Journalism, Writing/Reporting, News 2. Digital Multimedia Production 3. Back-End Development |
| India |
1. Full Stack Development 2. Research Generalist 3. Strategy Consulting |
| Japan |
1. Journalism: All Disciplines 2. Technical Training 3. Technology/Systems Consulting: Industry Solutions |
Inflation as well as its effect on cost of living has been a real concern. In November 2022, WTW asked a group of global TMG clients if they were considering or have implemented any cost-of-living adjustments in the form of one-time payments or base pay adjustment. Just 11% responded with “no.”
41% of clients polled said they were considering adjustments, and more than one-third said they already have implemented a one-time payment, base pay adjustment or a combination of both. Another 11% responded “other,” with some stating they were acting on this, but only in hyperinflation markets. Additionally, other factors were being considered, such as country regulations. Turkey, for example, experienced an increase in its minimum wage while also dealing with currency devaluation.
All of this said, high inflation and tight labor markets led to 54% of respondents increasing their projected 2023 pay budget above that of 2022. Others indicated no change in their pay budgets, and some were waiting to confirm how they moved forward pending the economic environment. See Figure 3.
| Higher than 2022 | 54% |
| No change | 21% |
| Lower than 2022 | 7% |
| Not yet set; we're waiting longer than usual | 18% |
We also queried TMG clients about changes to spend on employee benefits in 2022 versus 2021. Nearly one-third indicated their spend was higher, while the majority reported that their employee benefits costs were unchanged.
WTW’s December Salary Budget Planning Report reflects these higher budgets. For example, salary increase budgets in the UK for TMG are projected to reach an average 5.1% which, if it happens, will be the highest figure seen in decades.
We see similar trends in increases in Germany – an average 4.1% in 2022 is expected to rise to 4.7% this year. And in France, 3.7% will move to a projected 4.2%. Looking at the 2023 cycle, 57% of participating companies indicated that they increased original budgets and a further 15% had not yet set a final figure. Certainly, this is in line with conversations we have had with clients, with many delaying final decisions or recognizing that they may still need to adapt. Unsurprisingly, total compensation spend has increased for 76% of organizations. See Figure 4.
| 2023 average overall anticipated salary increases, excluding zeros |
|
| Brazil | 7.7% |
| Canada | 4.4% |
| China | 6.7% |
| France | 4.2% |
| Germany | 4.7% |
| India | 10.3% |
| Italy | 3.9% |
| Japan | 3.7% |
| United Kingdom | 5.1% |
| United States | 3.9% |
Broadly, organizations in the TMG industry are being more targeted with salary adjustments by focusing on key talent and the lowest paid workers (e.g., junior business associates, technical support staff) who are most significantly impacted by the rise in cost of living. This pattern is consistent across Europe, with an average of 50% of TMG employers planning salary adjustments among the lowest paid target groups across France, the United Kingdom, Belgium, Spain, the Netherlands, Italy and Germany.
Compensation is one element, but organizations have been taking other actions to adapt and react to a highly competitive labor market combined with inflationary pressures. Non-monetary actions are topping the list, including a greater focus on workforce flexibility as well as a broader emphasis on diversity, equity and inclusion initiatives and improvements to the overall employee experience.
Additionally, we are seeing organizations in Western Europe increasing their focus on supporting employees’ financial wellbeing by helping with day-to-day finances, including discounts/subsidies, access to savings and investment options directly from pay, and allowing the use of retirement contributions for other, more immediate needs.
While 2023 still has much uncertainty with looming global economic instability, an expectation for inflation to continue and a tight labor market, organizations must continue to think creatively as they develop a total rewards strategy that supports employees while meeting business needs.
