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Compensation Best Practices Panel
The document summarizes key points from Payscale's 2022 Compensation Best Practices Report. It discusses labor challenges such as higher turnover and difficulties attracting talent. It also covers pay increases that are higher than usual, with average increases over 3% for some industries. Additionally, it addresses pay equity being a priority for more organizations and compensation strategies becoming more formalized. Overall it analyzes compensation trends and challenges based on a survey of thousands of respondents.
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Compensation Best Practices Panel
- 1. 2022 Compensation Best PracticesPanel Thursday, March 17th
- 2. Agenda ▪ Overview ofCBPR TOPIC DEEP DIVES • Labor Challenges • Pay Increases • Pay Equity • Comp Strategy & Future
- 3. CBPR Overview Payscale’s 2022Compensation Best Practices Report is a 60+ page analysis of compensation trends and charts taken from our survey of 5,578 respondents gathered responses from November 2021 to January 2022. Cuts of the data include: ▪ Company Size (1-99, 100-749, 750-4,999, 5K-49,999, 50K+) ▪ Industries (15) ▪ Top Performers vs. Non-Top Performers ▪ Compensation Team vs. No Compensation Team 13th Year! “I love this report and can't wait to dig in.” -Teri Zipper, Managing Partner, Sapient Insights
- 4. Structure of theReport
- 5. Today's Panelists Bill ColemanRuss Wakelin Ruth Thomas Amy Stewart Chief Experience Officer Chief Data Officer Principal Consultant & Pay Equity Strategist Senior Content Marketing Manager & Author of CBPR Senior Director of HR Lexi Clarke
- 6.
- 7. Poll: Are YouExperiencing Labor Challenges?
- 8. Have you experiencedlabor shortages or trouble attracting talent in 2021 that is greater than previous years? Answered “Yes” by company size Overall
- 9. Are you concernedabout rising inflation in 2021 eroding the value of pay increases? Overall
- 10. 24% Average Turnover 36% Average VoluntaryTurnover 12% 40% 49% Lower than previous years About the same as previous years Higher than previous years How did your voluntary turnover in 2021 compare to previous years
- 11. What is yourorganization doing to attract and retain talent? We asked organizations what they are doing to attract and retain talent in the current economy for salaried or high wage workers versus low or minimum wage workers. For both groups, the most popular strategy is to raise wages or salaries.
- 12. Percentage of organizationswho answered 4 or 5 that they are confident in the ability of their compensation packages to attract and retain talent. About half Compared to before the COVID-19 pandemic, how likely are you to prioritize your health and wellbeing over work? 2022 Microsoft Work Trends Index
- 13.
- 14. Poll: Are YouGiving Pay Increases That Are Higher Than Usual?
- 15. Do you thinkyou are losing more talent than prior years due to insufficient pay increases? Given the volatile state of the economy, have you adjusted your 2022 pay increase budget beyond what you previously planned? Percent of organizations that participated in giving pay increases
- 16. When providing payincreases, do you make a distinction between merit increases, market adjustments, and increases for inflation? 40% combine into one increase 31% line-item for each increase type 24% make no distinction 6% are unsure Which of the following is factored into base pay increases?
- 17. Average base payincreases over 3% given to employees in 2022 compared to previous years Distribution of pay increases planned in 2022 compared to previous years
- 18. Industries most likelyto give pay increases over 3 percent Industries least likely to give pay increases over 3 percent Technology Engineering & Science 58% 55% Retail & Customer Service Government 40% 36% Nonprofits Healthcare & Social Assistance 32% 32% Food, Beverage & Hospitality Education 32% 25% Finance & Insurance Agencies & Consultancies 48% 48% Construction Real Estate & Rentals 48% 47% Energy & Utilities 40% Manufacturing 44%
- 19. Excluding promotions, whatwill be the highest base pay increase given to any employee in 2022? 0% 2% 5% 9% 2% 3% 9% 19% 8% 10% 17% 8% 7% 2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Highest Pay Increases Excluding Promotions Percentage of Organizations Nearly 12% for orgs with over 50,000 employees
- 20.
- 21. Pay equity intentis on the rise. For the first time in the history of CBPR, pay equity analysis is now something a majority of organizations are planning on doing. Is pay equity analysis a planned or current initiative at your organization?
- 22. Why is payequity a planned or current initiative? (rank top 3 in order of importance)
- 23. Are you concernedabout new legislation related to pay equity or pay equity reporting?
- 24. Little progress hasbeen made on pay transparency, which requires pay equity Almost 60% of orgs want to be at least a 3 on the pay transparency spectrum and 35% currently evaluate themselves as such (3-5). Last year, 55% wanted to be at least a 3 on the spectrum in 2021 and 34% of respondents evaluated themselves as such — so not much progress.
- 25. Pay equity requiresmeasurement – you can’t assume you don’t have gaps Do you know what your pay gaps are? Are you doing something to address your pay gaps?
- 26. Our customers arelikely to be more mature and have more compensation best practice because they partner with us - but there is room to grow. 41% of Payscale customers are advancing or optimizing their pay practices compared to 23% of non- Payscale customers.
- 27. Comp Strategy &Future CBPR 2022
- 28. More organizations are recognizinga need for a strategic approach to compensation. 86% of orgs say they have a compensation strategy or are working on one — a 10% increase from last year and a 16% increase from previous years (when this stat hung out at 70% YOY). However, only about half of orgs are confident in their strategy. Does your company have a formal compensation strategy/philosophy?
- 29. Which sources doyou use to obtain market data in 2022? Sources ranked by how much you trust and rely on them for market pricing
- 30. Did you makesignificant changes to your compensation data strategy in 2020 or 2021? Importance of compensation activities in the next few years compared to today
- 31. How will youprioritize the following compensation activities in 2022 compared to previous years? 61% 46% 45% 44% 40% 39% 39% 38% 37% 33% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Developing comp strategy and structures Conducting manager training on pay communications Understanding pay equity and DEIB Revising total rewards packages Investing in new sources of pay data Increasing pay transparency Getting approval for pay increases Preparing for a remote or hybrid workforce Getting more from comp software Creating variable pay structures Higher Priority Lower Priority Unchanged
- 32. Greatest challenges andinvestments for HR going into 2022 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ESG Job Description Management Modernizing HR software Benefits Workplace Policies Workplace Environment Performance Management Learning & Development Employee & Labor Relations Workforce Planning Fostering Company Culture Engagement Compensation Retention Recruiting Higher Investment More Challenging
- 33.