January 18, 2023, 0 Comments
If You’re Not Planning on Raising Salaries to Remain Competitive, You Need to Be
The latest Salary Budget Planning Report by Willis Towers Watson shows employers plan to increase their salary budgets by 4.6% in 2023. The main reasons include inflationary pressures (77%) and the tight labor market (68%).
Due to increasing economic challenges, 21% of respondents who are increasing their salary budgets plan to fund them by offering the compensation plans and benefits their employees value most. Seventeen percent are increasing prices. Twelve percent will restructure and reduce staff.
Find out why you should be planning to raise salaries to remain competitive in 2023.
Inflation Is Impacting the Job Market
Market conditions caused the majority of companies to spend more than planned on salaries in 2022. The survey respondents spent 4.2% more that year than the previous year.
Employees with in-demand skills likely will see the biggest salary increases. Because hiring for these skills is critical or difficult, a larger portion of the salary budget increases will be devoted to them.
Some employees’ take-home pay will be significantly above average. The amount depends on the employee’s performance and the going market rate for a role.
Existing employees may receive a salary increase based on the compensation being offered to new hires. Employees who are not paid in line with the market are likely to seek jobs elsewhere.
Pay Transparency Laws Affect Salary Ranges
Pay transparency laws may impact the salaries employees earn. Companies located or doing business in states such as New York and California are required to provide a good faith pay range with the minimum and maximum base salary or hourly wage in job postings.
These laws are designed to let employers know how much they should be offering for specific roles. The laws also provide a guide for employees and job seekers to have realistic expectations for compensation. As a result, salaries may increase based on individual circumstances.
Competitive Salaries Attract and Retain Talent
Employers are encouraged to pay close attention to their company’s needs and market data to determine appropriate employee salary levels. This helps attract and retain talent in the tight labor market.
Need Help Determining Salary Ranges?
The growing economic challenges are forcing employers to increase employee salaries to keep up with the cost of living. Providing higher salaries helps your company attract and retain talent in the tight labor market.
If you need help determining appropriate salaries for current or prospective employees, talk with the professionals at Arlington Resources. We can provide guidance to help your company stay competitive.