Ruth, an expert in compensation trends, Bill, an industry veteran, and Russ, a seasoned professional, each share their bold predictions for 2023 in the compensation space. They discuss anticipated salary increases and the growing importance of effective communication around compensation strategies. The trio also dives into the evolution of remote work, forecasting a rise in structured pay models and national wage standards for remote roles. They highlight the necessity of pay transparency, especially in light of evolving legislation, and stress the significance of engagement to retain talent in a competitive landscape.
Flattened salaries are anticipated in 2023 due to slowing economic growth and shifting talent across industries, complicating salary dynamics.
The rise of remote work will lead to increased demand for formal pay strategies, enhancing pay transparency and equity compliance across organizations.
Deep dives
Inflation and Salary Trends
Inflation is expected to decrease, but the economy may slow down, which will likely result in flattened salaries in 2023. This means that, on average, salary increases may be lower, even though certain high-demand roles may continue to see competitive pay adjustments. The current reshuffling in the job market, with layoffs in the tech sector, could push skilled talent into other industries, complicating the salary landscape. Determining which roles can sustain salary growth versus those that may stagnate will be a significant challenge for employers.
Growth of Remote Work Policies
Remote and hybrid work arrangements are set to become mainstream, with employers expected to solidify their remote pay strategies. As more companies consider national wage structures, the complexity of leveling pay across various job types, especially for remote workers, becomes crucial. The trend indicates that organizations will need to better define their policies around remote work, including compensation, to attract and retain employees effectively. The prediction suggests that the percentage of organizations with formal remote work pay strategies could rise from 18% to as high as 35% by the end of 2023.
Increased Focus on Pay Transparency
Pay transparency will take center stage as organizations begin to comply with emerging legislation surrounding pay equity. Companies are anticipated to improve their structures and practices around transparency, with the expectation that the percentage of organizations publicly posting pay ranges will increase from 10% to approximately 15%. Additionally, the ongoing push for pay equity legislation will likely lead to greater scrutiny and demands for accountability across various sectors. As companies focus on improving pay transparency, they may also confront tougher regulations mandating clear job postings with salary information.
Quarterly Compensation Adjustments
The trend toward more frequent pay adjustments is predicted to grow, with companies potentially shifting from annual salary reviews to quarterly compensation cycles. This reflects a broader shift toward 'agile compensation' practices, where organizations need to adapt their compensation strategies more quickly in response to market changes. While the focus on quarterly reviews can help maintain employee engagement and morale, there are concerns that economic pressures could slow this movement down. Ultimately, regular reviews may become essential as companies seek to foster stronger connections with remote employees and navigate fluctuating pay landscapes.
Ruth, Bill, & Russ each made 3 predictions about what they each think will happen in the compensation space in 2023 without conferring with each other. Join us as we share our predictions with each other and see if you agree on what we agree on.
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