Economic Impact of Pandemic on Salary Budgets in 19 Countries Revealed

Report Indicates Bounce Back in Some Countries and Industries in 2022

August 11, 2021

Scottsdale, Arizona – Approximately half of organizations in the U.S., Canada, India and the United Kingdom reported negative impacts due to the economic fallout from the global pandemic, according to the WorldatWork 2021-2022 Salary Budget Survey, the longest-running survey of its kind. Now in its 48 th year, the 136-page report provides CEOs, Chief Financial Officers and HR professionals with robust, year-over-year data to design competitive compensation plans and Total Rewards strategies that attract and retain high-performing employees. The data covers nearly 14 million employees from 19 countries and provides previous years’ data on salary increase budgets going back to 1984 (U.S.). An easy-to-use Online Reporting Tool enables users to drill down and build customized reports according to industry and geographic area (in the U.S. and Canada) allowing them to make informed salary budget projections at their organizations.

For the first time since its launch in 1973, in addition to covering the U.S., the survey provides in-depth insights into salary budget planning in Canada, India and the UK. In addition to the global pandemic impact on salary budgets, the detailed survey covers base salary increases, merit budgets, salary structure adjustments, promotional increases, variable pay, lump sum awards, compensation philosophy and more.

“Organizations of all kinds, from government entities to global multi-nationals to modest enterprises, rely on this annual survey to benchmark and plan salary increase budgets to maintain the workforces they need,” said Sue Holloway, Director, WorldatWork. “With differences in how and when organizations and industries recover from the pandemic, and with labor shortages across various industries, we anticipate a great deal of flux in salary budgets over the next few years.”

Sample Data:

  • Most of the 19 countries reported marginal shifts in salary increase budgets compared to 2020. China saw the greatest swing, dropping from 6.2% to 5.5% in 2021. India had the largest overall increase budget in 2021 (8.7%); Switzerland had the smallest (2.2%).
  • The U.S. national total salary budget increase is projected to be 3.3% in 2022, up from 2.9% in 2020 and 3.0% in 2021, signaling economic recovery and an increasingly tight labor market. Moreover, in 2021, organizations that reported a 0% salary increase budget dropped by half in most employee groups from 2020 levels, which were nearly 10 times higher than in 2019. 
  • The pandemic negatively impacted about 30% of organizations’ salary increase budgets in the U.S., Canada, India and the UK; fewer than 10% of organizations expect their salary budget increases to be negatively impacted by the pandemic in 2022.
  • Roughly 25% of U.S. and Canadian organizations froze pay in 2021; around 20% of organizations in India and the UK froze pay.
  • In the U.S., the pandemic’s impact on salary increase budgets varied significantly across 20 industries. For example, while Mining, Quarrying, and Oil and Gas Extraction led salary increase budgets over several years, it saw a large fall from 3.1% last year to 2.3% this year. Educational Services saw the largest upward shift from 1.5% in 2020 to 2.5% in 2021.
  • Most U.S. metro areas reported a slight increase in their averages, with a few drops in cities like Baltimore, Denver and Seattle.
  • Consistent with previous years, salary budget increases in the U.S. continue to be greater in smaller organizations.

Methodology

WorldatWork collected survey data for the “WorldatWork 2021-2022 Salary Budget Survey” from May 24 – June 30, 2021. The survey report was based on 4,085 responses. Members were asked to respond for the U.S. and 18 other countries: Australia, Belgium, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Netherlands, Russia, Singapore, Spain, Sweden, Switzerland and the United Kingdom.

About WorldatWork

WorldatWork is the leading global nonprofit organization for professionals engaged in the critically important practice of Total Rewards. We serve those who are responsible for cultivating inspired, engaged, productive, and committed workers in effective and rewarding workplaces.

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