With the threat of a recession looming, you may be thinking that companies like yours will begin to curb employee pay in the coming months. But research shows that the opposite is actually slated to take place.
Pay increases are expected to reach 4.6% in 2023 even amid recessionary woes, according to the latest findings from WTW.
So, what exactly does this mean for your business? Here’s a rundown of what you need to know about the anticipated increase in company salaries and how to make this work for you.
Let’s jump in!
Why Pay Increases Are on the Horizon
One of the reasons why employee pay is expected to rise in 2023 is due to today’s inflationary pressure. Company leaders are hoping to help to address America’s economic challenges by funding increased spending through increased salaries.
Companies are also rising salaries due to concerns about today’s tightening labor market. The tighter market can be attributed in part to the growing number of baby boomers who are retiring.
This has led to a lower rate of participation in the labor force and, in turn, the need for more workers. As a result, firms are forced to be more competitive in their salaries to retain and attract workers.
How to Respond to Rising Company Salaries
To stay competitive in 2023, consider reassessing and adjusting your firm’s total employee rewards package. For instance, you could increase your compensation and benefits to draw more workers.
Not sure which benefits programs or compensation plans your employees value the most? Consider administering a survey to determine which options they prefer. Then, implement compensation and benefit plans that reflect these preferences.
For instance, when it comes to compensation, you could increase your employees’ fixed pay. Another option is to keep their fixed pay the same but increase their variable pay, like performance-based commissions and bonuses.
To make your benefits more competitive, you can increase your life and health insurance coverage, as well as your retirement plan employer match. Other unique benefits worth considering include free lunch each day or free gym memberships.
If necessary, you may increase your prices to help to fund your salary and benefits increases in the coming months. Alternatively, you can reduce your headcount to free up more money to pay higher salaries. These higher salaries can then go to your highest-performing workers.
How We Can Help
With many companies planning pay increases in 2023, now couldn’t be a better time to evaluate your compensation structure and staffing plans for the new year. For instance, you may want to restructure your rewards package. This will help you to keep your company competitive with other businesses moving forward.
Fortunately, at QualStaff, we can help you to hire the best talent in 2023 and beyond. In this way, you can ensure that you receive the biggest return on your investment in your workers.
Contact us to learn more about how our recruiting services can elevate your company moving forward.