5 reasons why salary surveys are super important in 2021
With the March 2020 onset of the pandemic and the market disruptions that followed in North America, we didn’t see a lot of impact reflected in the salary surveys published last year. Companies seemed to have carried out pay changes as originally planned.
Just to be safe, Mercer took the extra step during our data refresh activities and went back to employers in July to ask what, if any, changes they made to pay.1 Further, we modified our Annual Compensation Planning survey to instead be a series of pulse surveys in which we asked questions around shifting compensation priorities. All in all, it seemed that there was minimal impact to rewards through the beginning of Q4 2020. But, what happened after that?
With many employers going through reductions in force in Q4 and, even more importantly, establishing budgets and compensation strategies for 2021 and beyond, this year’s salary surveys will have quite a story to tell. Using aging data, rather than participating in salary surveys and purchasing fresh data, would definitely be a mistake for a variety of reasons. Why, you might ask? Let us explain.
1. The true impact will be revealed
Now that we all understand that the global pandemic is something we will be living with for an extended period of time, employers have gone from reacting to the present to resetting for the future. What we learned from the most recent compensation planning pulse surveys, published in November, was that employers were budgeting for increases of 2.8%, just slightly below what they had the prior year. However, we also learned that the number of employers planning to freeze salaries increased to 9% in the US. All this tells us that more employees than usual will see little to no increase in base pay. We will likely see slowing pay growth for many jobs as well as some indicators of which jobs may have been impacted by reductions. The year-over-year reports provided in many of Mercer’s surveys will give you easy access to these changes. Depending on your industry, though, you’ll likely need to dig into the details of the survey.
2. New “hot” jobs will emerge
Let’s accept it – our lives have forever been altered. With the shift in how business is done – how retailers sell products, how doctors see patients, how services are offered to customers – it’s likely that jobs that we’ve thought of as hot in the past will be replaced with new jobs. The increase in importance of digitization and technology, regardless the industry, will mean a significant portion of a company’s salary budget will be allocated for IT jobs. But what other jobs will be seen as critical to rebuilding in 2021 and beyond? How will managers allocate limited budgets? Which jobs will be in high demand?
Salary surveysfrom multiple compensation sources are the key to understanding where you need to focus for both retaining and attracting the talent your organization needs.
3. Cost containment is a priority
Most everyone is thinking about ways to contain costs this year. While survey participation will ensure that you lock in a reduced rate for the publication, you’ll also be ensuring you’re paying employees appropriately – and not overpaying. By understanding your current business state, the critical roles necessary for resetting as well as keeping a good grasp on salary survey data, you will be able to establish a compensation strategy that works for today, but also has the flexibility to help you thrive into the future.
4. Get the most bang for your buck
Have a limited budget for purchasing salary surveys this year? Then make sure you work with the best data and customer service provider. With dependable data delivered via Mercer WIN®, covering a wide range of industries and jobs, Mercer’s salary surveys can’t be beat. Further, our customer service is unparalleled. Need help participating in a survey? We’re here for you. Not sure what data to pull to assess your market competitiveness? Our team is happy to provide you with guidance.
5. Base pay is the foundation but incentives are growing in importance
More and more employers are adjusting their compensation strategy and pay mix – putting more emphasis on short-term incentives to reward for performance. In order to set target incentive levels appropriately, you’ve got to understand the total cash compensation level (base pay + short-term incentive target) and how that aligns with your compensation strategy. Salary surveys will provide you with the details to modify your company’s strategy and pay mix.
Hopefully, you’re convinced – 2021 is not the year to age your salary data. In order to understand the nuances of this labor market, and get the best value for your survey budget, participating and purchasing surveys this year is a must.
Wondering which surveys will be best for you? Give us a call 855.286.5302 or email firstname.lastname@example.org.
1For the United States: 2020 US MBD/TRS Data Refresh Summary; for Canada: 2020 CA MBD/TRS Data Refresh Summary