The labor force increase of 8.5 million is smaller than the increase of 10.1 million, an annual growth rate of 0.7 percent, experienced during the previous decade. Variable Compensation. (See discussion of construction employment that follows. However, the projected loss of jobs is both smaller and slower than the loss of 140,100 jobs, at an annual rate of 3.1 percent, seen in the previous decade. The median expected basic pay increase has risen from 4% to 5%, the highest since the time series started in 2012. Is your overall total rewards plan market competitive? The continued replacement of copper wires with fiber-optic cables, the need for increased download speeds for wireless communication, and new technologies are expected to drive demand for output in this industry. Benefits are becoming increasingly important and can be key differentiators. These declines were followed by a 1.3-percent employment gain from 2010 to 2011 and a 1.7-percent gain from 2011 to 2012. Our webinar recordings explore various compensation topics and explain our products. The mining sector is expected to experience an increase in real output over the projection period. The construction industry was one of the hardest hit industries during the recession that ended in 2009. This increase is slightly down from the 704,100 jobs added between 2002 and 2012. (See table 3.) Which adjustments are necessary to ensure the ability to attract and retain a talented workforce in this unique environment? Real output in the subsector is projected to increase from $447.5 billion in 2012 to $684.4 billion in 2022, an increase of $236.9 billion. Currently, inflation is exerting an upward force on compensation, but we have not seen evidence of compensation growth subsequently pushing up inflation. Figure 1. Whether youre a people professional, a people manager, an employer or a policy maker, there are plenty of ways to join our community of champions for better work and working lives. Educational services. document.getElementById("sa-year-span-mobile").innerHTML = new Date().getFullYear() Salary.com. 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. https:// ensures that you are connecting to the official website and that any 41% of organizations will have a higher salary increase budget in 2022 than 2021. December 2013, https://doi.org/10.21916/mlr.2013.39. Changing demographics, as well as the upcoming retirement of the baby-boom generation, are expected to lower the labor force participation rate. The CompAnalyst Market Data platform is easier to use than ever before. Pay and Benefits in a High Inflation & Recessionary Environment, Economy Watch: Emerging Markets View (February 2023), Small improvements in inflation and spending in March, Inflation and spending moderated in February, January CPI data show road ahead will be bumpy, 2021s Hot Wage Growth Will Likely Cool by Years EndBefore Surging Again by 2023. (See table 3.) As the economy continues to improve in the wake of the latest recession and as demand for domestic goods rises, so will the demand for wholesale trade services. Construction Executive Pay Reported to Rise by 4.7% for 2023, Associated General Contractors of America, 2023 Construction Safety Week & OSHA Falls Stand-Down, AGC Construction Safety Excellence Awards (CSEA), AGC Construction Safety Professional of the Year (CSPY) & Construction Safety Champion of the Year (CSCY) Awards, AGC Emerging Contractors Education Series. This difference resulted in most industries having lower growth rates in the 20122022 projections than they did in the 20102020 projections. Increased pressure to reduce government spending and budget deficits will contribute to employment declines in the federal government. Recession fears dont seem to be impacting increase budgets, Employers are increasing pay outside of the annual cycle. 1 The National Bureau of Economics Research (NBER) is generally recognized as the official arbiter of recessions in the United States. Projected growth rates for some industries may appear uncharacteristically high, either as a result of low initial levels of employment and output in 2012 or, in the case of industries that escaped the effects of the recession, as a result of expectations of continued historical growth. The securities, commodity contracts, and other financial investments and related activities industry is projected to see one of the largest and fastest increases in both employment and real output within the financial activities sector. In addition, real output in the industry is projected to grow at an annual rate of 4.0 percent, increasing from $126.3 billion in 2012 to $187.5 billion in 2022. Employers Revise Upward 2022 Salary Budget Projections. 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. 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. This decline in output is one of the largest and fastest among all industries. Historically, agriculture has depended on self-employed and unpaid family workers, as well as wage and salary workers. While these findings are based on UK data, the broader trends and implications should be of interest wherever you are based. The following is a summary of the leading predictions for 2022: WorldatWork: WorldatWork's 2021-2022 Salary Budget Survey found that salary increase budgets are projected to grow to 3.3 percent on average in 2022, up from 3 percent in 2021. . (See table 2.) This increase represents a rebound from the output loss of $200.0 million seen in the 20022012 period. 2023 Change, Transformation & Organization Design Conference, Diversity, Equity and Inclusion Conference. Along with these developments, the demand for assembly-line workers has declined. This employment decline is smaller than the decline of 413,400, at 3.2 percent annually, seen during the 20022012 period. 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. (See table 2.) 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. Transform compensation at your organization and get pay right see how with a personalized demo. Ensure they are paid competitively to the labor market. They also are looking at how to focus their salary budgets for the greatest impact, with 2022 projections showing that 96% of companies globally will increase salaries and far fewer will implement salary freezes than in 2021 or 2020. Companies will raise pay an average 3.9 percent in 2022, the Conference Board reports. (See table 2.) (See table 2.) BLS projects that total employment in the United States will reach 161.0 million in 2022, up 15.6 million from the 2012 level of 145.4 million.3 This growth represents a 1.0-percent annual rate of increase, which is faster than the 0.2-percent rate of increase experienced during the 20022012 period. If employees purchasing power erodes too much, they will seek alternative income sources or cost-saving opportunities. 18 For more information, see Woodward, The U.S. economy to 2022.". ), The home health care services industry, which provides in-home care such as nursing and physical therapy, has the fastest growing employment of all industries, one of the largest increases in employment, and one of the fastest growing real outputs. But despite this, pay awards are struggling to keep up with inflation. 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. The overall projected 2023 increases came in at 4.42% for middle managers and professionals with most regions also at 4.4%. Our team is working to resolve. Amazonhas also increased the maximum base pay from $160,000 to $350,000 for corporate and tech employees to support in recruiting and retaining top talent. 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. This increase is higher than the $86.8 billion increase seen during the previous decade. Activate your membership first to unlock discounts. This increase is larger than the 59,900 jobs added between 2002 and 2012. Employment in the industry also is expected to increase by 33,900, an annual rate of increase of 1.7 percent, to reach 220,700 by 2022. During that time, overall wage growth is likely to remain well above four percent. (See table 4.) Employment is expected to fall from 554,200 in 2012 to 497,800 in 2022, a loss of 56,400 jobs, which is larger than the loss of 42,100 jobs seen in the previous period. (See tables 3, 4, 5, and 6.) The growing use of cloud storage also is expected to play a key role in the growth of the industry. The site is secure. Logging workers are excluded. Partner for projects in Asia Pacific countries. The sector is projected to see the largest decrease in employment of any of the major service-providing sectors, losing 407,500 jobs between 2012 and 2022, for a decrease of 1.6 percent per year. First look at increase budgets for North America. Julie.murphy@salary.com Employment in state and local educational services is expected to account for slightly more than two-thirds of the increase in employment in the state and local government sector over the 20122022 period. In newly released findings by . (See tables 5 and 6.) Percentage of companies freezing salaries, Figure 3. Average US Pay Increase Projected . While real output is projected to grow, employment in this sector is projected to decline. For example, the Executive Vice President position had an overall average of $909 but showed an average of $774 in firms under 100 million and $959 in companies over 100 million in revenue. For example, the US median increases have risen from 3.0% (during the middle of 2021) to 3.5% (as of now). Over the last few projection cycles, apparel manufacturing and leather and allied product manufacturing have consistently been among the industries with the largest declines in employment and output. Strong economic performance in the mid-2000s led to rapid nonresidential construction and an excess inventory at the time the recession hit; as a result, investment in nonresidential structures slowed in subsequent years.30 Investment in nonresidential structures is projected to grow at 2.0 percent annually over the projection period, contrasting with the 0.1-percent annual rate of decrease seen during the previous decade. Growth in wages for new hires and accelerating inflation are the main causes of the jump in salary increase budgets. Expected pay awards have risen to 5% overall, the highest level since we started tracking in 2012. The November Salary Increase Budget Survey shows that almost half of respondents (46%) said that the increase in wages of new hires played a role in salary increase budget estimates for 2022. If this scenario arises, OConnell said he would spend time hearing the employee out to understand their perspective and concerns. Copyright 2022-2023 Aligned Growth Partners, LLC.All rights reserved. Total agricultural employment is projected to fall by 223,500 over the projection period. Click to return to the beginning of the menu or press escape to close. The projected output growth is faster than that in any other major sector of the economy. Construction. Salary increases in 2023 are projected to outpace 2022 pay raises but to trail inflation, new research shows, as insufficient pay raises drive employee turnover. 5 Throughout this article, unless otherwise noted, output refers to real output in chain-weighted 2005 dollars. The majority of the growth in employment can be attributed to an increase in the number of nonagricultural wage and salary workers, who will account for more than 98 percent of projected jobs in the upcoming period. We begin 2023 with headlines of strikes, high rates of inflation and rising interest rates, but few headlines on the labour market itself. Track the state of the business cycle for 12 global economies across Asia and Europe. Again, the shift from hospitals, which are more expensive, to outpatient services, which are less expensive, is expected to contribute to this slower job growth.15 Real output in the industry is projected to increase from $535.5 billion in 2012 to $683.3 billion in 2022. While projected to increase, employment in the goods-producing sectors is expected to continue its downward trend as a share of total employment. 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. The industry is projected to add 13,500 jobs over the 20122022 period, reversing the loss of 16,500 jobs that occurred during the 20022012 period. 2023 The Conference Board Inc. All rights reserved. Download our latest report for these findings and more. Real output in manufacturing is expected to see an increase of $1.2 billion, a 2.4-percent-per-year increase, between 2012 and 2022. However, you may be may eligible to receive additional discount on your one year WorldatWork membership. While the loss of jobs is large, it is smaller than the 231,200 jobs lost during the previous decade. The increase of 522,300 jobs also represents one of the largest employment increases of all industries. November 2022 Results. Output, by major industry sector, 2002, 2012, and projected 2022, Total nonfarm wage and salary employment, 19922012 and projected 2022, Table 3. While the optimism shown by different countries comes with hints of caution, 2022 will likely be a better year for salary increases. WorldatWork is a United States 501(c)(3) tax exempt organization. In any case, I would thank the employee for speaking up and encourage them to keep an open dialogue about any concerns they have., For employers who dont prioritize pay increases, retention will be a critical concern because employees will leave for more money, Leo said. The health care and social assistance sector was not as greatly affected by the last recession as were other sectors and continued to have robust growth even during the recession. The average NV Energy bill for July is expected to reach $470 in Southern Nevada, up from $337 last year, and the average bill in Northern Nevada is projected at $212, up from $159 in 2022, says . As the shift to service-oriented economy continues, the service-providing sectors also are projected to account for almost 70 percent of nominal output by 2022. This increase is up from the increase of $74.0 billion experienced during the previous decade. Redundancy intentions remain low but are increasing slightly. Retail trade. Real output in professional and business services is expected to increase by almost $899.5 billion (the second-largest output increase within the service-providing sectors), to reach a level of more than $3.3 trillion in 2022. Salary.com released JobArchitect, a management tool to keep job descriptions up-to-date. Finally, consider other payments you may have made during the year, like retention bonuses or recognition awards. Increased demand for smartphones, tablets, and new wireless technology is expected to drive output growth in the semiconductor and other electronic component manufacturing industry. One common theme to remember: Even with an increased budget, it is important to segment your workforce as you consider your goals. With advances in technology, output is expected to grow faster than employment in this industry. Employment is projected to fall by 46,200, to reach 350,600 by 2022. 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. In this environment, the upward momentum for salary increase budgets is likely to continue into early 2022. ), Monetary authorities, credit intermediation, and related activities, Petroleum and coal products manufacturing, General state and local government except compensation and consumption of fixed capital, The individual and family services industry, which provides a variety of social services to children, elderly people, people with disabilities, and others, is projected to have the second-fastest growth in employment and the ninth-largest increase in employment. The real concern with compensation growth and inflation is the wage price spiral. This increase in output contrasts with the $182.9 million lost during the previous decade. For example, in the early 1980s, the United States had double-digit inflation with salary increase budgets of over 10%. Despite this fast employment growth, the industrys real output is relatively small. Employment is projected to increase by 121,200, rising from 800,500 in 2012 to 921,700 in 2022, an annual rate of increase of 1.4 percent. This output growth is both larger and faster than the increase of $8.1 billion, at an annual rate of 0.6 percent, seen in the 20022012 period. Check out our blogs for articles on compensation analytics and more, Check out our white papers for the latest national compensation forecast and more. Now in its 10th year, Salary.com's U.S. and Canada National Salary Budget Survey is designed to collect critical data on how organizations are budgeting for salary increases over the next year and provides insight into current variable pay practices. While this increase almost erases the loss of $85.9 billion that occurred in the previous decade, real output in 2022 is projected to be below the level it attained in 2002. Your information has been sent successfully. This difference is due to the sectors large employment base. Of the organizations that reported higher 2022 projections at the end of the year, the average total increase was about 3.7% (compared to 2.9% for 2021 for the same group of companies). The growth in employment and output in this industry is driven by an aging population and the lower cost of home health care settings relative to that of inpatient facilities.13 The industry is projected to add 715,700 jobs, at an annual growth rate of 4.8 percent, reaching a level of more than 1.9 million jobs by 2022. 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. The goods-producing sectors are expected to see a recovery in employment and output over the projection period. (See table 1.) Richard Henderson (See table 6.) While the loss of jobs has slowed, employment in telecommunications is projected to fall by 51,000, to 807,000 in 2022, registering one of the largest declines over the projection period. At the same time, there are no signs of inflation slowing down, and it may remain elevated in the coming months, increasing the need for cost-of-living adjustment.