Responses exclude companies not planning merit increases. Merit increases are pay raises given to employees based on their performance and don't include base pay increases based on job promotions or cost-of-living adjustments.Įmpsight's survey projects a mean rise in merit increase budgets for all employees (excluding zero increases) of 3.67 percent and a median increase of 3.50 percent. The survey was conducted between April and July 2022. Approximately 40 percent are forecasting 4 percent or higher.Approximately 35 percent are budgeting 3 percent.
companies reporting a merit increase forecast for 2023: A small number (2 percent) felt extremely certain.Ĭompensation survey and consulting firm Empsight'sĢ022 Policies, Practices & Merit Survey report, which includes 2023 forecasts, shows that of 259 U.S. When asked how certain they felt about their 2023 salary increase budget projections, nearly half of respondents felt moderately certain and just over one-quarter felt slightly certain. "The rapid rise in salary increase budgets over the past couple years, combined with today's volatile economic environment, challenges HR pros to leverage data and think strategically as they formulate 2023 compensation budget recommendations and negotiate with CFOs." Organizations of all kinds, from global multinationals to modest enterprises, "plan salary increase budgets to maintain the workforces they need," said Sue Holloway, director of executive compensation strategy at WorldatWork. If it doesn't, employers could be pressured to raise their salary budgets projections next year, although if the economy continues to slow, they may not have sufficient revenues to do so. Compensation planners may be relying on estimates that the inflation rate will continue to moderate in 2023. Increased 8.5 percent for the 12 months ending in July, a smaller figure than the 9.1-percent increase for the period ending in June but still near a 40-year high. The Consumer Price Index (CPI) for all items Salary Budget Survey 2022-2023: Top-Level Results, WorldatWork, 2022. Salary increase budgets represent the pool of money available annually for base pay adjustments. Outliers, or extreme values on either the high end or low end, have the bigger effect on the mean and less on the median, although for this data there was little difference between the two measures. In the table of survey results below, the mean is the mathematical average, and the median is the middle value after listing expected budget increases in successive order. A subsequent WorldatWork Salary Budget Quick Poll conducted in January 2022 reported that more than half of the respondents had increased their 2022 salary increase budget projections in the previous six months as inflation began to spike.įor 2023, this year's survey, which closed in June and received responses from 2,445 WorldatWork members, is forecasting that salary increase budgets will stay at an average of 4.1 percent.Ĭompanies may also have separate budgets for variable pay bonuses. rose to an average of 4.1 percent in 2022, a 20-year high and much larger than the average 3.3 percent increase that last year's survey of total rewards professionals projected in August 2021. Microsoft’s top executives will also feel the pain, he said.WorldatWork's Salary Budget Survey shows that salary increase budgets in the U.S. This year will look more like business as usual, Nadella wrote.
Last year Microsoft nearly doubled the budget for performance bonuses. In January, Microsoft said it would cut 10,000 jobs, just shy of 5% of its workforce. What the CPI report means for you: Inflation dips to 4.9% core consumer price gains stay elevated “This year the economic conditions are very different across many dimensions.”īirth control pills over the counter FDA panel recommends allowing birth control pill to be sold over the counter “Last year, we made a significant investment in compensation driven by market conditions and company performance, nearly doubling our global merit budget,” Nadella wrote. That platform shift is capitalizing on the growing interest in artificial intelligence, according to an internal email from CEO Satya Nadella obtained by Insider. “While we will not be providing salary increases for our full-time salaried employees this year, we will continue to invest in our employees through promotions, bonus and stock.” “As part of that effort, we are funding our compensation to align with the overall market,” Microsoft said. In a statement to USA TODAY, Microsoft said the technology giant is navigating “a dynamic economic environment and a major platform shift requires us to make critical decisions in how we invest in our people, our business and our future.” Microsoft will not give raises to full-time employees this year and is cutting back on bonuses and stock awards, too, as revenue growth slows.
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