Employers rethink work and rewards to address labor, inflation worries
Attraction and retention challenges persist in the face of ongoing inflation
66% of organizations have increased recruitment efforts in 2022. Only 6% decreased recruitment activity.
Employers are most likely to experience difficulties attracting or retaining talent in these groups:
- 71% - Talent with digital skills
- 66% - Professionals (non-management)
- 61% - Non-exempt hourly employees
Percentages indicate “to a moderate or great extent”
Organizations use financial and non-financial levers to address talent challenges
- 86% - Hiring people higher in the relevant salary range
- 84% - Providing increased workplace flexibility
- 81% - Offering sign-on bonuses
- 55% - Increasing/Targeting use of training opportunities
- 65% - Offering retention bonuses
- 47% - Using spot rewards
Percentages indicate “taking action”
Employers use a range of approaches to tackle competitive compensation pressures
On average, organizations have taken one action and are planning/considering two additional actions
Action taken | Planning action | Considering action | |
---|---|---|---|
Further increased/Will increase the focal annual salary budget for 2022 | 23% | 14% | 30% |
Budgeted/Will budget additional funds to make salary adjustments throughout year as needed | 22% | 13% | 33% |
Have used/Will use retention bonuses more extensively | 21% | 7% | 30% |
Adjusted/Will adjust the salary ranges (minimums, midpoints, maximums) more aggressively | 18% | 16% | 30% |
Have increased/Will increase variable compensation | 8% | 6% | 24% |
Have/Will deliver more frequent salary adjustments | 7% | 7% | 24% |
- 4.0% - spent/will spend
- 3.0% - initial budget
Base salary increased by about 1% of payroll
*Based on respondents who’ve increased or plan to increase their focal annual salary budgets
75% of organizations that delivered or are planning to deliver salary adjustments more frequently are doing so for targeted groups
These organizations are most likely to target:
- 63% - Professionals (non-management)
- 49% - Non-exempt hourly employees
- 48% - Talent with digital skills
- 46% - Managers (excluding executives)
How many times per year are employers delivering increases?*
- 55% - As needed
- 29% - Two times
- 10% - Other
- 3% - Three times
- 3% - Four times
Organizations that enhanced or are planning to enhance retention bonuses focus on:
- 82% - Managers (excluding executives)
- 80% - Professional (non-management)
- 52% - Talent with digital skills
Organizations that increased or plan to increase the use of variable compensation focus on:
- 80% - Managers – off-cycle long-term incentives
- 76% - Professionals (non-management) – spot bonuses
*Based on employers providing or planning to provide increases more frequently
Actions to take now!
- Refine your compensation philosophy and outline the purpose of each element of pay
- Review and update salary structures while assessing internal pay equity concerns
- Define the talent and work strategy to optimize compensation spend
- Enhance HR and manager capability to address talent and rewards challenges
Source: The 2022 Mid-year Compensation Survey, North America results. A total of 884 employers participated in the survey, which was conducted between May 26 and June 7, 2022. Respondents employ 15 million employees across a range of industries.
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Infographic: Employers rethink work and rewards to address labor, inflation worries | .2 MB |