NFP Compensation Insights | June 2023
Mid-Year Look into Salary Increase Trends
We are halfway through the year and it’s a good time to assess how compensation increases have panned out this year so far. 2023 has seen the largest pay increases since 2008, however, they are below what organizations originally projected. Data also suggests an overall slowdown in compensation as it relates to incentives and market adjustments.
In this month’s Compensation Insights, we take a look at what the survey data has revealed and what we can take away moving forward. Pressures are still high, but companies are taking a more strategic, less reactionary approach to compensation. We hope you find this information helpful as you think about future compensation decisions. As always, don’t hesitate to reach out to NFPCC for expert advice and guidance with your pay programs.
We are well into the middle of the year and most companies have made it through the daunting period of performance reviews and annual raises. So how have increases played out so far? Mercer’s recent survey revealed that 2023 annual merit increases averaged 3.8 percent, while total compensation – which includes base salary, incentive pay, and any other type of variable compensation – increased by 4.1 percent. The averages are below what U.S. organizations projected in November but above the 2022 compensation increases, according to Mercer’s U.S. Compensation Planning pulse survey.
Pay Transparency Increases Retention by 30 Percent or More, According to New Research
Recently released research from Payscale finds that pay transparency is correlated with decreased likelihood that employees will seek a new job.
This is excellent news for employers, who have been increasingly nervous about expanding pay transparency legislation requiring them to publish pay ranges to job advertisements.
From Compensation to Benefits: 3 Ways HR can Unlock the Potential of Total Rewards
Employees today want more equitable workplaces, and they’re willing to leave their job to find an employer that offers what they’re looking for. Unfortunately, there is no silver bullet for creating an equitable workplace — it requires a multi-faceted approach. But one way to start is by investing in a total rewards program, which can help organizations attract top talent, foster a great employee experience, and secure a competitive advantage.
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Syncing Employee Needs with Culture and Cost
By incorporating data collected from thousands of employers, with fresh insights and expert perspectives from NFP’s National Practice Leaders, the NFP US Benefits Trend Report examines challenges employers are facing and responds with comprehensive, actionable insights.