Compensation adjustments, bonuses and greater workplace flexibility top list of employer actions
Under pressure from challenging labor market conditions and inflation, North America employers are making changes to their work and reward programs as they battle to attract, retain and engage workers, according to a new survey by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. These changes include paying employees more, giving increases at more frequent intervals, enhancing workplace flexibility and boosting training opportunities.
The WTW 2022 Mid-year Compensation Survey found two in three respondents (66%) have increased hiring activity since the beginning of the year. Still, roughly two in three employers are having difficulty attracting and retaining employees with digital skills (71%) and professional employees (66%). And 61% are having difficulty hiring and keeping hourly employees.
“Employers are leaving no stones unturned in their battle to find and keep talent,” said Lesli Jennings, North America leader, Work, Rewards and Careers, WTW. “While making enhancements to compensation programs can support employers’ immediate recruitment and retention efforts, employers recognize they will need to pull levers in addition to compensation and reinforce a connection to the overall employee experience.”
To help attract and retain employees, the survey revealed the following actions employers are taking:
- 86% are hiring employees at the higher end of salary ranges.
- 84% are increasing flexibility in where employees work (e.g., home versus office) and how they work.
- 81% are offering sign-on bonuses to attract talent.
- 65% are using retention bonuses to keep employees. Organizations that are enhancing the use of retention bonuses are most likely to target such bonuses to managers (82%) and professionals (80%).
- 55% are increasing training opportunities.
In addition to these changes, employers are also revising their salary budgets in an effort to hire and keep workers:
- More than four in 10 respondents (44%) are planning or considering boosting their current salary budgets; 23% already have.
- Nearly half of respondents (46%) are planning or considering adjusting salary budgets throughout the year on an as-needed basis; 22% already have.
- More than three in 10 (31%) respondents are planning or considering making more frequent salary adjustments throughout the year; 7% already have.
- Nearly half of respondents (46%) are planning or considering adjusting salary ranges (i.e., minimums, midpoints and maximums) more aggressively; 18% already have.
“While talent challenges may seem especially acute now, employers must consider the long-term implications of their actions, particularly around the sources of funding for higher compensation and concerns over internal equity between rewards for new hires and rewards for employees of longer standing. Salary compression is a real issue for many employers, and our survey results show that it could continue with hiring employees in the higher salary range. Employers can take actions to address these concerns, such as refining their overall compensation philosophy, raising salary ranges and reviewing — or rethinking — their strategy on how work gets done and rewarded,” said Lori Wisper, leader, Work and Rewards Global Solutions, WTW.