Many of you are now starting to look to the future and plan for 2021. Let’s face it — 2020 has been a doozy and focusing on a new year, hopefully with a fresh start, is welcome.
- With the impact of the pandemic on our organization, should we modify our compensation philosophy and market pricing for 2021?
- What should we budget for increases in 2021?
- How do I know if I’m paying competitively in the “new normal”?
- I have a smaller budget this year for surveys; how do I decide which vendor/surveys to purchase?
- What risks could we encounter if we age our survey data versus purchase new data?
- If we cannot pay out incentives or provide merit increases, are there other perks we should be considering for our employees to keep them engaged?
We hear you! These questions and many more are coming to us from our clients as everyone is doing their best to operate in an uncertain world. Everyone is trying to make decisions in the best interest of their company and their colleagues. Operating with empathy while keeping economics in mind is the name of the game for 2020 and beyond.
From making sure our annual salary survey data is relevant, to creating pulse surveys that capture the changing policy/program implementation — we hear you. Mercer is responding by taking new actions to provide you with the most up-to-date, accurate data and insight to support your decision-making in this challenging time.
Just as we have for 75 years, we’ve got your back.
Importance of relevant data and insights
A recent poll of Mercer’s consultants indicated that, by their estimation, over 60% of employers have moved into the return to work phase. For most of us, work never really stopped, but what is meant by this phase is that employers are putting into place longer-term plans around being in the office versus virtual working, considering how to adjust performance targets for the year, re-focusing teams on priorities — generally, figuring out how to operate in this “new normal.”
Not only does salary data still matter, but perhaps now it’s more important than ever. You will be asked to provide input for an annual salary increase budget for 2021, most likely with some direction on cost containment. That means you will need a clear understanding of 1) what are the jobs/roles and functions that are critical as your company moves forward and 2) how competitively are the employees in those roles paid. Additionally, you’ll want to understand where cost savings opportunities are for jobs where you might be able to reposition your target pay level.
Aging your data from last year will not provide you with accurate compensation data going into 2021. Since industries, as well as different jobs/professions, are feeling the impact of the pandemic differently, applying an aging factor to your data will not capture important nuances that will inform how you position pay for the future.
Steps we are taking
While participation in many salary surveys takes place early in the year, with a March/April data effective date, the results are not published until late in the third quarter, or even early in the fourth. Hasn’t the world changed again since then? We thought it might. And we did our best to capture those changes so that you have the most accurate data and insights available to plan for 2021.
Survey data refresh for North America
All employers that participated in Mercer's main surveys, such as MBD, Retail, and SIRS, received the originally planned holistic survey covering a wide variety of base pay, incentive, and policy topics. To ensure that we captured any changes to pay, starting in July, Mercer requested that all survey participants upload a short and simple employee data file with salary data effective as of July 1. We made sure to only request new data for those elements that we expected to have changed (e.g., base pay).
Using the data refresh, we produced a refresh results report, a supplement to the traditional salary survey. The good news: you can be confident that using Mercer’s 2020 salary data reflects the go-forward market.
Pulse surveys and polls
COVID-19 polls that change frequently and address the questions you have as you return to work. These results are available free to all clients and are available by industry and region.
Additionally, we have changed the way we collect our Compensation Planning Survey (CPS), the report many of you rely on to plan your annual increase budgets and pay structure adjustments. We have moved to a quicker, monthly collection model with a rapid one-week turnaround to publication that allows us to put real-time data and insights into your hands faster than ever.
Mercer understands that the situation and economic impact continues to evolve. Because of that, we have been modifying the questions that are asked in the CPS pulse survey each month to ensure that we are capturing what you need to know at the right time.
For example, in April and May we looked at how annual increases and incentive plans were delivered in Q1 of 2020. In subsequent months, we modified questions to include changes to salary structures, incentive plans, and turnover.
Breadth, longevity, and stability
While all of these tactical plans are critical to ensuring we support you, there’s another reason to trust Mercer to provide the data and insights you need. This year we celebrate our 75th anniversary!
We have a long history of providing insight, data, and consulting services with excellence and integrity. Any business activities we have gone through, such as acquiring a company, have been handled with extreme care to minimize both the impact to our clients and the employees involved. With our global reach, deep industry experience, and multi-faceted solution portfolio, Mercer is the best choice for providing consistent, reliable data and insights to help you make decisions today that will let your organization thrive in the future.
Want to learn more about the findings from some of our data refresh activities? Visit the US MBD/TRS Data Refresh Summary and download the summary. Or contact us at 866-605-1031. We’re here, ready to help.
Mercer’s got your back … for 75 years and counting.