- The percentage of employers that increased compensation funding has gone down significantly over the last two years, according to survey results from Salary.com published Nov. 30. In 2020, 18.1% of organizations surveyed upped funding for merit increases, down from 24% in 2019 and 28% in 2018, the high point in Salary.com’s data which goes back to 2012.
- While the study asserted that a strong compensation communication strategy is important, survey data revealed that many employers are falling short in this area. Nearly 4 in 10 said they have no formal compensation strategy; of those with a philosophy, many fail to communicate it widely. Three-quarters (74%) said they do not provide any training to managers on how to discuss compensation.
- The survey also covered the impact of COVID-19 on headcount and other workforce actions. After remote work, which a vast majority of employers (92%) adopted, 30% enacted layoffs; furloughs were the next-most common action at 27%. Twenty-two percent decreased hours and roughly the same amount instituted salary freezes, while 16% made salary reductions.
The coronavirus pandemic has kept compensation in flux as employers react to unique, rapidly-changing times. That said, it appears most companies are making at least slight increases in 2021, according to an August survey from Willis Towers Watson and data released in September by Salary.com. However, a survey from Gallagher suggested 2021 salary growth may be negatively impacted by the pandemic.
Remote work, too, may drive lower salaries, at least at major employers whose workers are fleeing cities. Business leaders are considering pay adjustments for employees based on where they live, according to a Willis Towers Watson survey from earlier this year.
Employees seem to be aware, however, that compensation increases may be minimal or nonexistent, according to August survey results from Randstad.
When it comes to salary strategies, equity in compensation has received a great deal of attention in recent years. Practices such as pay banding and pay transparency can make a positive impact, experts previously told HR Dive. Some employees have even gone as far to take transparency efforts into their own hands.