As 2021 winds down, a tight labor market, inflation and various other
compensation concerns are confronting organizations amid salary budget planning
and financial forecasting for 2022. For these reasons, Workspan Daily’s
“Compensation Crossroads” series will provide current
salary data, expert insights and actionable plans to better prepare
compensation professionals during this tumultuous time.
WorldatWork’s “Salary Budget Quick Poll” confirms that organizations have evaluated the environment and are increasing their previously planned salary budgets to address the competitive labor market and inflation. This increased spending is still falling short of what the majority of responding compensation professionals say they feel is needed to stay competitive in the talent wars.
As of Monday, the first 114 compensation professional respondents reported an average salary budget increase of 3.6% average and 4.0% median. Still, that’s about 1 percentage point shy of increases (4.8% average and 5% median) they say is necessary to maintain/attract needed talent.
WorldatWork’s “2021-2022 Salary Budget Survey,” which was released in August, reported 3.3% average and 3.0% median for 2022 planned salary budget increases.
“Retention of top talent is a top priority and addressing compression and internal equity with the higher attraction salaries adds to a challenging compensation landscape,” said Alicia Scott-Wears, compensation content director at WorldatWork. “With the flood of resignations and the inflation reports released, it is not surprising that compensation professionals and organizations as a whole are having to reassess the salary budget spend in addressing the issues that have plagued the last six months.”
The Salary Budget Quick Poll is part of WorldatWork’s ongoing efforts to provide members with the most current and relative data to help navigate these rapidly changing times. WorldatWork members can participate in the pulse survey into early January.
More than half of respondents have increased their 2022 salary budgets in the past six months — 6.8% by more than 2X and 47.6% by up to 2X.
Almost all report difficulty in attracting/retaining talent with 25.2% reporting it “very difficult” and 68.9% “somewhat difficult.”
Here are the responses so far by question:
1. What salary budget increase do you feel is necessary to properly maintain and attract the needed talent in your organization for 2022?
- 4.8% average
- 5.0% median
2. What is the actual increase that your organization is budgeting?
- 3.6% average
- 4.0% median
- 6.8%: significantly higher (more than 2X)
- 47.6%: somewhat higher (up to 2X)
- 43.7%: about the same
- 1.5%: lower
4. Is your organization having difficulty attracting/retaining talent?
- 25.2%: Yes, very difficult
- 68.9%: Yes, somewhat difficult
- 5.8%: No
About the Author
Jim Fickess writes and edits for WorldatWork.