The recovery in the construction sector will account for almost all of the job growth in the goods-producing sectors over the projection period. The manufacturing sector, while projected to experience employment declines, remains the dominant sector within the goods-producing sectors in terms of both employment and output. This increase also is more than three times the increase in employment experienced in the previous period, in which only 124,900 jobs were added. Merit increase budgets are tracking at 3.2%*, while total increase budgets, which also include other types of budgeted base pay increases, such as promotion awards, are tracking at 3.5%. Is your compensation mix appropriate in this unique environment? The November Salary Increase Budget Survey shows that almost half of respondents (46%) said that the . Employment in the industry is projected to fall by 30,900, to reach a level of 78,600 in 2022. This could put some organizations in a predicament, as the data indicates many merit increase budgets are already skewing much higher than normal. I would explain that there are a wide range of salaries paid for any given job and that our range midpoints are pegged to the market (the going rate), and that this is our target pay level for people who are fully qualified for and fully performing the role. (See table 1.) Real output is expected to increase from $15.9 billion in 2012 to $18.3 billion in 2022, an increase of $2.4 billion, at 1.4 percent annually. This resilience, along with the newly enacted Affordable Health Care Act, changing demographics, and advances in technology, should continue to drive employment growth in this sector. The exception is Brazil, which is projecting a 6.2% salary budget increase in 2022 compared to 7.1% in 2021. Salary data for a broad cross-section of jobs within 5 US geographic regions. While real output is projected to grow, employment in this sector is projected to decline. U.S. employers expect to pay an average 3.4% raise to their workers in 2022, according to a Willis Towers Watson survey. 24 USDA agricultural projections to 2022, Report OCE-2013-1 (Office of the Chief Economist, World Agricultural Outlook Board, U.S. Department of Agriculture, Interagency Agricultural Projections Committee, Long-term Projections Report, February 2013), http://www.ers.usda.gov/media/1013562/oce131.pdf. Consider the following to support employee retention in this challenging environment: SalaryExperts July 2022 National Compensation Forecastprovides important additional insight into the current economic environment to support in your compensation decisions. Despite a 2.5% pay increase for much of the department's unionized workforce that summer, the starting hourly wage for corrections officers was still nearly $9 below what FedEx was offering. (See tables 5 and 6.). Richard Henderson, "Industry employment and output projections to 2022," Although the output increase of $72.8 billion over the projection period is larger than the increase of $51.1 billion seen in the previous decade, it is slower than the 20022012 increase, which had a lower starting point. The civilian labor force is projected to grow from 155 million in 2012 to 163.5 million in 2022, an annual growth rate of 0.5 percent. Actual and projected pay increase data at the city and national levels. (See tables 3, 4, and 5.) Even though output is expected to increase in all goods-producing sectors, the percentage of nominal output that these sectors contribute to the economy is expected to decline. Consider a lump-sum payment or a one-time retention bonus to offset inflation in 2022. Pandemic recovery is a key driver of projected job growth in some sectors. As labor markets tighten and inflation rises in certain countries, all eyes are on salary budgets and, so far, they seem to be inching above prior years. Employers project average annual salary increases of 3% for executives, management, professional employees and support staff in 2022, a survey by benefits consulting firm Willis Towers Watson found. The goods-producing sectors, excluding agriculture, are projected to increase their real output from $5.6 trillion in 2012 to nearly $7.4 trillion in 2022, an annual rate of increase of 2.7 percent. Clients depend on us for specialized industry expertise. 34 Ian King, PC shipments fall for 5th quarter even as U.S. decline slows, Bloomberg News, July 2013, http://www.bloomberg.com/news/2013-07-10/pc-shipments-shrank-11-percent-in-second-quarter-gartner-says.html. While 44% of organizations reported not changing their projections from earlier in the year, almost 1 out of 4 (23%) reported that their 2022 projections are higher now than anticipated earlier in 2021. Currently, inflation is exerting an upward force on compensation, but we have not seen evidence of compensation growth subsequently pushing up inflation. We apologize for the inconvenience. The demand for increased network and computer systems security, mobile technologies, and custom programming services, along with the growing use of electronic health records, is expected to drive employment and output growth in the computer systems design and related services industry. Only Australia, India, Italy, United States and Brazil saw average increase budgets in 2021 above those in 2020. This projected growth makes this industry one of the largest and fastest growing in terms of output. Real output in this industry is projected to increase from $148.6 billion in 2012 to $221.4 in 2022. The projected rise in production is due to expected higher domestic and export demand.25 Real output is projected to increase by $36.4 billion, an annual rate of increase of 2.1 percent, to reach $194.5 billion in 2022. Telecommunications is the industry with the largest employment in the information sector, accounting for almost a third of the sectors employment in 2012. For more than 20 years, Salary.com has empowered confident decisions by aligning compensation practices with recruiting, performance, and development initiatives through easy-to-access data and meaningful insights. The shift to more outpatient services, the increasing population of elderly people seeking to maintain some level of independence, and improvements in technology allowing younger patients shorter rehabilitation stays are expected to make this industry one of the largest and fastest growing among all industries. With the construction industry recovering, forestry is one of the industries within the agriculture, forestry, fishing, and hunting sector that is expected to see an increase in both employment and output. Kevin OConnell, director of total rewards and HR operations for Samsung Semiconductor, shared that the company doubled their normal salary adjustment budget for 2022, in addition to establishing a competitive merit increase budget. Current & projected data on pay increases, structure adjustments, and more. (See table 3.) This increase is lower than the $40.3 billion increase in real output that occurred during the previous decade. Although continued technological advances are expected to drive output growth, productivity gains will more than offset any rise in employment demand from that growth, resulting in employment declines. The 2-3 Percent Raise is on the Decline If employees purchasing power erodes too much, they will seek alternative income sources or cost-saving opportunities. 11 This set of BLS projections is based on the 2007 North American Industry Classification System (NAICS). Government wage and salary workers are excluded. Real output is projected to increase from $365.1 billion in 2012 to $393.0 billion in 2022. This month, WorldatWorks Salary Budget Follow-up Pulse Poll collected more than 250 responses from compensation professionals representing organizations of different sizes and across multiple industries, indicating an average 2022 merit increase of 3.7% and 3.5% median, significantly above predictions just six months ago. The annual increase of 2.6 percent for employment also makes construction one of the fastest growing industries. Additionally, the total salary increase budget for 2023 is projected to increase even further to 4.3 percent. The health care and social assistance sector will account for almost a third of the projected job growth from 2012 to 2022. ), Because economic growth during the present recovery has remained relatively slow compared with that of past recoveries, the expectations about the path of future GDP growth and the labor force participation rate have shifted. However, manufacturing is not projected to see the postrecession rebound in employment seen in other sectors. Real output in the insurance carrier industry is expected to increase from $412.1 billion in 2012 to $511.8 billion in 2022. Compensation is going up. (See table 1.) However, double-digit inflation rates would cause concern. For example, in the 2010-2020 projections, the number of wage and salary jobs in construction was projected to grow from 5.5 million in 2010 to almost 7.4 million in 2020, an annual rate of increase of 2.9 percent. . The annual rate of increase of 2.4 percent also is faster than the 0.2-percent annual increase experienced during the 20022012 period. The health care and social assistance sector11 is expected to add the largest number of jobs and become the sector with the largest number of jobs by 2022, overtaking the state and local government sector, which accounted for more jobs in 2012. By contrast, manufacturing is expected to experience a slight decline in employment because of productivity gains, international trade, and consolidation of firms. Actual and projected pay increase data at the city and national levels. 19 For more information, see Tabitha M. Bailey and William J. Hussar, Projection of education statistics to 2021 (U.S. Department of Education, National Center for Education Statistics, Washington, DC, January 2013), http://nces.ed.gov/pubs2013/2013008.pdf. How much larger will increase budgets be for 2023? In a series of brief surveys, you'll access key data points like annual increase budgets, structure adjustments and incentive usage that meet your immediate compensation planning needs. I n midyear 2021, most salary increase budget projections were pegged at around 3 percent to 3.2 percent for 2022. Base pay may increase by an average of 3.9% in 2022, the largest one-year projected hike since 2008, according to The Conference Board's latest wage survey of 240 companies, the majority of . Finally, consider other payments you may have made during the year, like retention bonuses or recognition awards. This decline is both larger and faster than the one that occurred during the 20022012 period, in which the industry lost 126,600 jobs. This increase is smaller than the increase seen in the previous decade, in which the sector added 288,200 jobs, at an annual rate of 4.6 percent. However, that rate is slower than the annual rate of decline of 4.8 percent experienced during the 20022012 period. The number of agricultural workers, which includes wage and salary workers, self-employed people, and unpaid family workers, is expected to decline by 223,500. This growth in output contrasts with the loss of $34.6 billion, at 1.5 percent per year, which occurred during the previous decade. Employment in local government educational services is projected to increase by 454,400, to reach more than 8.2 million in 2022, representing one of the largest increases in employment among all industries. By contrast, the industry added only 25,000 jobs between 2002 and 2012. Keep in mind, although your comment is automatically approved, it can still be removed if deemed inappropriate. (See table 5.) The November Conference Board Salary Increase Budget Survey portends a 3.9% jump in wage costs for firms in 2022, compared to 3% reported in April. Retail trade. 57% of employers have hard-to-fill vacancies, and 29% anticipate significant problems in filling hard-to-fill vacancies over the next six months. According to the latestContractor Compensation Quarterly (CCQ) published byPAS, Inc., construction executive staff wage increases came in at 5.5% for 2022 and are also projected to rise by an average 4.7% by 2023 year-end. Download our latest report for these findings and more. One common theme to remember: Even with an increased budget, it is important to segment your workforce as you consider your goals. While real output is expected to continue to increase, its growth rate may continue to slow as consumers shift from personal computers to cheaper tablets.34 Employment in this industry is projected to fall by 39,900, one of the largest declines in employment among all industries, to reach a level of 118,700 in 2022. Richard Henderson is an economist in the Division of Industry Employment Projections, Office of Occupational Statistics and Employment Projections, Bureau of Labor Statistics. Contact our, If you are current affiliate member, Multi-year membership purchase is not applicable to you. This increase is larger than the 59,900 jobs added between 2002 and 2012. (See table 4.) This increase is slightly larger than the increase of 142,600 experienced during the 20022012 period. ), Agriculture, forestry, fishing, and hunting. And those with degree-level or equivalent qualifications are highest in demand. Real output in this sector is projected to increase by $69.2 billion over the projection period, to reach $376.5 billion in 2022. Most organizations in the 15 largest economies experienced a dip in 2021 compared to their 2020 actual budgets, increasing their salary budgets by an average of 4.0% among those granting increases. This increase is only slightly larger than the 12,000 jobs added between 2002 and 2012. This increase is larger and faster than the increase of $57.3 billion, at 2.0 percent annually, experienced during the 20022012 period. You are now being redirected to the payments page. The increase of $7.5 billion over the projection period is smaller than the increase of $11.8 billion that occurred during the previous 10-year period. Between 2002 and 2012, this industry experienced the largest decrease in employment within the sector, losing 422,900 jobs. Survey data reveals Salary.com popular among mid-market and enterprise-size companies. (See table 1.) Real output in the communications equipment manufacturing industry will be driven by increased demand for smartphones, smartphone applications, and wireless communications devices. Average US Pay Increase Projected . The increase of 781,700 jobs, at an annual rate of 2.2 percent, makes this industry one of the largest and fastest growing in terms of employment. (See table 5.) While the prevailing salary increase rate remains at three percent, the percent of organizations giving 2-3 percent increases has dropped to its lowest point since 2019. We may lose good talent if we dont have the right tools and compensation levels in place, OConnell said, adding that it also risks demotivating existing employees and employee engagement can suffer amongst people who see others getting ahead by getting offers elsewhere and either leaving the organization or getting retention packages.. If you are a current Affiliate member, you may be eligible to receive additional discount on your WorldatWork membership. The projected increase of $99.7 billion is one of the largest increases in real output over the 20122022 period. Real output in the lessors of nonfinancial intangible assets industry, which contains businesses primarily engaged in assigning asset rights (such as patents, trademarks, and brand names), is projected to increase by $56.9 billion, to reach $182.8 billion in 2022. . 41% of organizations will have a higher salary increase budget in 2022 than 2021. This content is exclusively for WorldatWork members. Skill shortage vacancies are a particular problem and currently outnumber labour shortages. (See table 2. BLS projects that GDP will grow at an annual rate of 2.6 percent between 2012 and 2022, a growth rate that is higher than the annual rate of 1.6 percent experienced during the 20022012 period,6 which included the recession that ended in June 2009. Because the recession affected sectors and industries differently, the expected employment growth over the projection period reflects the relative effects of the recession as employment growth continues on or returns to long-term trends. Real output in the industry is expected to rise by $90.4 billion, an annual rate of increase of 2.5 percent, to reach $410.9 billion in 2022. Annual U.S. National Salary Budget Survey, Salary.com Surveys & Consulting | Salary.com, Salary.com Recognized by Analyst Study for Strengths in Data Software, What to Look for When Choosing a Salary Survey Partner, CompAnalyst Market Data: Smart Matches, Fast Prices, and New Insights, Differences Between HR-Reported and Crowd-Sourced Compensation Data, Salary.com Releases JobArchitect, A Tool to Align Organizational Needs. Track the status of job markets across the US through online job listings. The salary increases come at a time when new . Nonagricultural wage and salary employment data are from the BLS Current Employment Statistics survey, except for private household employment data, which are provided by the Current Population Survey (CPS). Employment in the other educational services industry, which comprises business schools and computer and management training, technical and trade schools, other schools and instruction, and educational support services, is projected to increase from 671,500 in 2012 to 830,300 in 2022, an annual growth rate of 2.1 percent, making this industry one of the fastest growing in the economy. (See table 6.) This large output growth can be attributed to the rebound in the construction industry and the housing market, a rebound expected to occur over the 20122022 period.18 The projected 2.8-percent annual growth rate in real output during the projection period is an improvement over the 1.1-percent growth rate experienced in the 20022012 period. Those expectations have since gone by the wayside. (See table 4.) Jeff Robinson, president of PAS, Inc., is a regular sponsor and presenter at AGC's Construction HR and Training Professionals Conference. First look at increase budgets for North America. Survey participation: March 13 March 24, Topics covered: 2023 actual increase budgets, 2023 salary structure adjustments, and a new section on pay transparency. Increased budgets are evident across most of the worlds largest economies. 6 For more information on the projections for the macroeconomic variables, see Maggie Woodward, The U.S. economy to 2022: settling into a new normal," Monthly Labor Review, December 2013, https://www.bls.gov/opub/mlr/2013/article/the-u-s-economy-to-2022-settling-into-a-new-normal.htm. After establishing your increases budget based on market data intelligence, it is critical to align your priorities. All rights reserved. Especially if those higher rates were sustained over an extended period. While these findings are based on UK data, the broader trends and implications should be of interest wherever you are based. Richard Henderson (See table 3.) Output growth is much faster than employment growth in the goods-producing sectors because these sectors tend to be much more productive than are the service-providing sectors. "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 . This product is included in the Talent All Access Portal US Edition, your single source for 20+ best-selling reports at a discount! This increase represents a rebound from the output loss of $200.0 million seen in the 20022012 period. For over 100 years, our cutting-edge research, data, events and executive networks have helped the world's leading companies understand the present and shape the future. Job Loss Risk Index: Which Industries Will Suffer the Greatest Layoffs This Recession? This would slow GDP growth to below current expectations by economists (3.9 percent year-on-year, according to a Bloomberg Consensus Survey). April 2022 National Compensation Forecast, 12-Month Projection International Monetary Fund World Economic Outlook, ERI Economic Research Institute (projected increase budget), Mercer Pulse Survey (total increases including 0%), Willis Towers Watson (actual average increase), Pearl Meyer Poll (implemented total base salary increases). (3) Includes agriculture, forestry, fishing, and hunting data from the Current Population Survey, except for data on logging, which are from the Current Employment Statistics survey. Historically, executive staff predictions are about 0.5% low. (See tables 3 and 4.) There are many different levers involved, he said. Real output in the wholesale trade sector is projected to increase from just over $1.1 trillion in 2012 to $1.6 trillion in 2022, an annual growth rate of 3.7 percent, making this sector the second fastest growing in terms of output. The construction industry was one of the hardest hit industries during the recession that ended in 2009. (See table 3.) (See table 2.) It is now common to see pay increases of 4.0% or more in 2022.
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