The Advisors' Blog

I previously blogged about compensation committees using discretion in incentive plans to retain executives through the pandemic. But with the spotlight on human capital management, compensation committees need to look at executive compensation in conjunction with workforce compensation. Here are recent workforce compensation poll results from Pearl Meyer – the poll was conducted from November to December 2021 with 339 companies participating (179 public, 109 private and 51 non-profit), and was inspired by the “growing concerns about rising inflation and increasing competition for talent.” Below is an excerpt of Pearl Meyer’s key findings, for boards and management teams tackling hiring and turnover issues:

– After more than two decades of very flat total base salary increases hovering in the low 3% range, we are expecting 2022 increases to surpass 4% for all employee groups combined. Moreover, nearly all survey respondents will be providing employees with base salary increases in the coming year.

– Results indicate that organizations are responding to this perfect storm of record inflation, high turnover rates, and a shortage of labor by providing more generous increases as a tool to attract and retain talent.

– Private-for-profit organizations reported the highest total increase figures, followed by publicly traded companies.

– This very timely survey reports that half of respondents anticipate 2022 base pay increases to be higher than what was originally expected earlier in the year, indicating that organizations are revisiting the annual compensation planning exercise. Of those organizations with higher projected increases than was originally expected earlier in the year, 40% report increases greater than 5%.

– Emily Sacks-Wilner

Programming Note: The Advisors’ Blog will be off tomorrow and Friday. We’ll see you in 2022. Happy New Year!